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www.themanufacturer.com April 2011 Vol 14 Issue 04

Manufacturing in a new light

A global festival, a Budget for making things, a Plan for Growth and new TIC Centres give industry a makeover

Regional Focus Yorkshire and The Humber Energy Supplement

Feed-in tariffs, the CRC Energy Efficiency Scheme, energy managers and more

Interview Alberto de Benedictis

CEO, Finmeccanica UK Plus: post-Budget interview with Business Minister Mark Prisk MP

Manufacturing in Action section Featuring Nuaire, Cargill and MBDA

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Editor’s comment

After the madness of March, energy becomes frontline concern March 2011: the month when the world turned on its head. In no other month in recent memory could an earthquake in New Zealand that killed more than 180 people be so easily subordinated. Japan’s earthquake, tsunami and nuclear crisis unfolded before our eyes like a grisly slow motion car crash, the horror escalating with each news bulletin. It has brought the viability of a bigger nuclear industry into sharp focus, a subject debated heavily at the Global Manufacturing Festival in Sheffield last month. Our lead story on page 16 covers some events in the main week of the month-long festival. While Deputy Prime Minister Nick Clegg cast doubts on the financing mix and the increased regulatory costs of the nuclear industry following the disaster at the Fukushima power station, many feel that nuclear energy development in the UK is unavoidable. Yorkshire is a region well placed to become a hub of expertise for both the UK and global nuclear sector, covered by our Regional Focus with EEF. Then came uprisings and military conflict in Libya, Syria and Tunisia, knocking even Japan’s nuclear crisis off the front pages. Unrest in the Middle East and North Africa region is cited as the main reason for March’s manufacturing PMI falling to a five-month low of 57.1. EEF’s Insight column on page 63 covers risks associated with doing business in volatile countries. Manufacturers generally welcomed the many pro-business changes in the 2011 Budget, especially the extension of short life assets from four to eight years. But many were non-plussed by the new carbon floor price rates, rising to £30 per tonne by 2020. Tata Steel and Rio Tinto Alcan objected strongly to the measure but Business Minister Mark Prisk talks to TM about the reasoning behind the carbon floor price and other components of the Budget on page 61. Here are some of the key announcements for UK industry in an extraordinary month: The Plan for Growth is announced with the Budget, answering many of the CBI and EEF’s demands for recognition of the pressures of international competition (see Steve Radley, page 13). Nine new EPSRC Centres for Innovative Manufacturing, funded by £51m from the Department for Business, Innovation and Skills, are announced, making 12 in total. The first of between six and eight Technology Innovation Centres is to focus on High Value Manufacturing. Nick Clegg spoke to TM in person about it, see the Lead story. Siemens wind turbine factory in Hull should sustain thousands of new jobs to 2049 because it will also maintain the nacelles for the life of the turbine, and Danish company Vestas expresses interest in building its own turbine factory on the East coast. Cover image: Hannah Berry, a maintenance electrician at Sheffield Forgemasters in the third year of her apprenticeship

Fingers crossed that this positive momentum for manufacturing will continue. Will Stirling, Editor The Manufacturer in partnership with EEF, the manufacturers’ organisation. Working together to secure the future of manufacturing.

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News and features 04 News

Manufacturing news

10 Manufacturing appointments On the move

Find out who’s heading where in manufacturing

12 The big picture

Sustainability starts at home

Joe Davidson of the Institute for Manufacturing explains the merits of a good grasp on sustainability at factory level

13 Economics

Budget benefits industry EEF’s policy director Steve Radley is happy that his organisation got what it wanted from the budget. All except one thing…

14 The legal low down

Relocating manufacturing operations Thomas Eggar LLP on protecting intellectual property when relocating

16 Lead story

A Festival of opportunity Tim Brown looks back at last month’s Global Manufacturing Festival in Sheffield

22 Interview

The Italian’s job What have the Romans ever given us? Alberto de Benedictis, chief executive of Finmeccanica UK, the country’s second largest defence company, lays it out

28 Regional Focus

Yorkshire and The Humber

34 Leadership, People and skills Retaining talent

Mark Young explores the most important steps a company should take for effective employee retention

37 Employee of the month

Semta’s National Apprentice of the Year was nearly never an apprentice at all… Firth Rixson’s Luke Shaw says why turning down university was the right choice for him

38 The National Manufacturing Debate

Can a resurgent manufacturing industry provide long term, sustainable jobs in volume? Cranfield University’s big debate hopes to find out

41 Lean Manufacturing

Handling a tipping point

45 2

Jane Gray reports from an international press event held by Toyota Material Handling Europe in Sweden

45 Energy and Sustainable Manufacturing Taking responsibility for energy

At a time when lowering emissions in on everybody’s mind, Tim Brown analyses alternative, more efficient ways for manufacturers to power their sites

Contents The Budget 2011 48

A Budget for making things

Mark Young talks to manufacturers, MPs and trade organisations about the new measures affecting UK manufacturing

Operations and Maintenance 54

Whatâ€™s in store for MRO outsourcing?

Brian Davis reports on the benefits that a growing number of larger manufacturers are reaping from outsourcing the management of maintenance, repair and overhaul of equipment

EEF Insight 57

Managing risks in foreign markets

The risks of doing business in politically volatile countries, by Abigail Gollicker of risk intelligence network Stirling Assynt

IT in manufacturing 58

54 69

ENERGY SUPPLEMENT

Stamp of approval

Malcolm Wheatley investigates the advantages of investing in document management technology

More Budget 2011 Reaction 61

Will Stirling interviews Business Minister Mark Prisk on capital allowances, Enterprise Zones and the carbon floor price

IT in manufacturing 63 IT News

Keeping you abreast of whatâ€™s new in manufacturing IT

Average unit prices for energy in the UK have risen by 10% on average over the last year. The Budget brought yet another tax. What are manufacturers doing to mitigate costs, reduce consumption and embrace renewables? This supplement explores...

Manufacturinginaction Sponsored by Applied Angle

Factory of the month

82 Nuaire Bucking the recession Welsh ventilation experts Nuaire are about to blow their market away with a new piece of innovation...

102 Cargill The balance of trade 120 MBDA Rocket men 135 Michelin Tyre Company Modernism in motion, as Michelin makes way for innovation 144 Invacare The wheel deal 146 SPTS Talk is chip 150 Mapal UK The cutting edge

Newsinbrief AUTOMOTIVE

Nissan has begun UK deliveries of the first 100% electric, mass-produced, affordable family car, the, Nissan LEAF. With fuel costs having reached the record £6 per gallon barrier, the LEAF costs approximately £2 for a full charge (providing a 110 mile range). An equivalent sized petrol engine car would cost, on average, £12 to travel the same distance. Currently built at the Oppama plant in Japan, starting 2013 LEAF production will take place at Nissan’s Sunderland Plant, with production of batteries beginning next year in the same location.

In March Coventry-based electric van manufacturer Modec entered into administration, making about half of its 53-strong staff redundant. Ryan Grant, Simon Appell and Anne O’Keefem, partners at Zolfo Cooper, have been appointed administrators to the company. They will continue to trade the business as they assess all options for the its future, including attempting to find a buyer for Modec. “We are examining all possible options. Modec is a market leader in its field and represents an attractive purchase for the right buyer,” Grant said.

An order for 20 buses valued at £3.6m has been placed with Optare by Midlandsbased publicly listed transport group Rotala. The order is for 15 Versa hybrids, acquired with a contribution of £1.7m from the Government’s Green Bus Fund, three Solo SRs and two Versas, which are diesel only. All the buses use Mercedes-Benz diesel engines and in the hybrids the engine is combined with the Siemens/Bluways hybrid system using ultra-capacitors.

Jaguar Land Rover announced that it handed out £2bn worth of contracts to more than 40 British companies to supply for the latest model in its Range Rover series, the Evoque. The contracts constitute about half of all global contracts issued for the range. Additionally, Jaguar Land Rover employed an extra 1,500 people at its Halewood, Merseyside plant to handle production of the new car. Chief executive Ralf Speth says the announcement will be the first of many boosts for the UK automotive supply chain from JLR.

BUDGET

A Budget for making things Chancellor George Osborne revealed a heavily manufacturing-centric Budget with a two per cent drop in corporation tax forming his headline policy. He described the 2011 Budget planning rules. There will also as one “for making things, not be funding for 24 new University making things up”. technical colleges and a £100m The Plan for Growth was also pot for four new science centres. released, containing around 100 Funding will be provided for an measures centred around four extra 50,000 apprenticeship starts main aims: making the UK “the over the next four years, including most competitive tax system 10,000 higher apprenticeships. for growth” among the G20 Osborne’s biggest surprise in countries; making the UK the the Budget was a new ‘Fair Fuel best place in Europe for business; Stabiliser’ initiative which will see encouraging investment and the fuel duty rises suspended exports; and creating a more and balanced out by an increase educated workforce that in tax on the oil companies from is flexible. 20 per cent to 32 per cent. If As well as cutting corporation the price of oil were to fall below tax by two per cent this April, $75 a barrel the situation will be Mr Osborne will also commit to reversed again. cutting a further one per cent Labour leader Ed Miliband in each remaining year of the said Osborne’s second budget Parliament. The bank levy will be “tells the story of the failure of increased to ensure that banks do the first”, adding the budget not benefit from this change. announcements were “classic Forty-three tax reliefs are to Tory tricks” based on “Del Boy be scrapped. Mr Osborne also economics” – giving with one hand announced a £370m extension and taking away with the other. for the National Insurance holiday EEF, the manufacturers’ available to small businesses. organisation, took a rather more The Chancellor pointed out that positive view. The manufacturers’ manufacturing in the UK is now organisation called the growing at ‘a record rate’ and has Chancellor’s policies “a down employed an extra 14,000 people payment on growth”. since Christmas. Government is to increase R&D tax credits and to create 21 new ‘enterprise zones’ around the country in manufacturing stronghold areas: businesses based in these areas will benefit form lower rates, super high speed The Gladstone Budget box used by Chancellor George Osborne broadband and simplified

ManufacturingNews BUDGET

Tata slams price floor Steel giant Tata Steel warned that jobs could be lost as a result of the introduction of the Carbon Floor Price the Government announced during the Budget presentation. potentially damaging”, saying the steel industry already suffers because of emissions costs imposed by the European Union and that it will become less competitive as a result of the Carbon Floor Price introduction. The Government plans to set a carbon floor price of £16 per tonne starting 2013, and raise it to £30 a tonne by 2020. Köhler said: “The CFP proposal will impose additional unilateral emission costs specifically on the UK steel industry by seeking to artificially ensure that these costs cannot fall below government-set targets According to Tata, the steel industry will be damaged which no other European by the introduction of the carbon floor price country will enforce.” A minimum price for carbon emissions from power stations will be introduced. The funds will be used to invest in green energy. Karl-Ulrich Köhler, head of Tata Steel’s European operations, deemed the measure “exceptionally unhelpful and

BUDGET

Plan for Growth: the measures Presented at Budget, the Plan for Growth sets out measures to support private sector investment, enterprise and innovation. The package includes measures to: Support technology commercialisation by creating a High Value Manufacturing Technology Innovation Centre (TIC) and nine new universitybased Centres for Innovative Manufacturing by 2012, and by introducing a programme of new Manufacturing Fellowships to forge links between business and the research base. Support the modernisation of the supply chain, by launching the reformed Manufacturing Advisory Service from January 2012 with an additional £7 million to deliver supply chain activities over the next 3 years. Boost the take up of apprenticeships, by launching a £75m programme of targeted support to help smaller employers access

Advanced Level and Higher Apprenticeships, and supporting the development of a new degree-level Higher Level Apprenticeship which will incorporate engineering status and professional recognition for successful apprentices when they graduate. Strengthen STEM skills and vocational skills. Improve the image of the sector, by promoting the UK manufacturing sector, launching a high profile industry showcase alongside the 2012 Olympic and Paralympic Games, rolling out a programme of ‘Made in Britain’ exhibitions, and promoting a new international prize in engineering. The Manufacturer will cover some of these measures in greater detail in the May issue, exploring how they are designed to benefit industry directly.

Newsinbrief RENEWABLES AND ENVIRONMENT

Senior politicians and figures from the renewable energy sector are backing calls for the Government to pledge fiscal support for the UK’s nascent wave and tidal energy industry. Trade organisation RenewableUK launched its Sea Power campaign, which includes an urgent call for funding from government, following the recent release of its report ‘Wave and Tidal Energy in the UK’, which found that the sector has the potential to employ 10,000 people and generate revenues of nearly £4bn per year by 2020.

Coca-Cola Enterprises is to embark on a joint venture with ECO Plastics to build a £15m new recycling factory in Lincolnshire which will more than double the UK’s capacity to reprocess PET bottles. The new facility will be able to process up to 40,000 tonnes of PET each year when fully operational and will help CCE achieve its target of including 25% recycled PET in all of its plastic packaging in Britain by 2012.

CMA CGM Group announced the launch as from April of an eco-calculator accessible to all its customers via its e-business platform. Measuring the environmental impact of their supply chain has become an increasingly important issue for many companies. The tool, developed according to the methodology of international body Clean Cargo Working Group, produces an accurate calculation of the carbon footprint of a journey, based on real data including points of departure and arrival, volume of freight, fuel consumption and vessel speed. REGULATION

In a speech to the Federation of Small Businesses, Mark Prisk revealed the Government’s plans to cut red tape and allow businesses to grow. They include a public audit of almost 22,000 statutory instruments that are currently on the statute book and a moratorium to exempt businesses with fewer than ten employees and genuine start-ups from new domestic regulation for three years. For the public audit, the legislation will be grouped into themes on a dedicated website and businesses will be able comment on the validity of existing regulations.

Newsinbrief OIL AND GAS

GE Oil & Gas received a $7m contract from Aberdeen’s Total E&P UK to supply drilling and production equipment for the expansion of the Elgin Franklin gas field in the North Sea. To meet the extreme well pressure and temperature demands of the project, GE is supplying surface wellhead and flow control equipment that can operate at well pressures of 15,000 PSI and temperatures of 450° F. The company will also provide field service installation, training and maintenance services. SKILLS

BAE Systems launched its 2011 Schools Roadshow, joined by the Royal Air Force, Blue Peter’s Andy Akinwolere and... a robot called Brains. The engineering-based show, now in its sixth year, aims to make 25,000 school children in 250 UK schools interested in science and engineering. The live performance, hosted by robot character Brains, is followed by two workshops: one challenging kids to programme a Lego Mindstorm vehicle; the other, delivered by the Royal Air Force, looks at examples of biomimicry.

Pharmaceutical giant Sanofi-aventis took steps to protect the Dagenham community as they prepare for their 2013 closure of the local manufacturing facilities. The company appointed UK property agent Savills to join the consultancy team to advise on regenerating its manufacturing site in Dagenham. Sanofi chose to stage the closure of the plant over four years and to partner, in 2010, with facilities management and regeneration specialists SOG, to give employees time to consider their career options and create new possibilities for them in a bid to protect their skills. CHARITY

Supported by a consortium of sponsoring firms, two engineers, Mark Byass and Mike Sayer, are manufacturing a nine-metre carbon fibre pedal-boat they intend to use to cross the Atlantic Ocean in 38 days, from the Canary Islands to Barbados. Project Torpedalo has two goals: to raise £250k for the Motor Neurone Disease Association and Make-AWish Foundation UK and to try and set a new World Record for a human powered pairs crossing the Atlantic.

INNOVATION

First Technology Innovation Centre announced in Rotherham Deputy Prime Minister Nick Clegg and Business Secretary Vince Cable announced details of the first of six Technology Innovation Centres (TICs), part of a government investment of over £200m over the next four years, during a visit to the Advanced Manufacturing Research Centre near Rotherham. network capable of addressing all manufacturing issues. Talking to The Manufacturer in an exclusive interview, Mr Clegg said: “The Centre will translate great research and innovation, particularly in our universities, into commercially viable products, to make sure that as a country we remain on the cutting edge of new advanced manufacturing. My view is that with the consistent support of government, which we are determined to give to these sectors, this really could be one of the most promising innovations in long term support for advanced British Deputy Prime Minister Nick Clegg announced the first manufacturing in many Technology Innovation Centre in Rotherham many years.”

Over a decade, the TIC for High Value Manufacturing is expected to generate about £2bn of additional R&D and create 3,000 new engineering jobs across the seven institutions that make up the TIC consortium. The project will allow the seven centres to build on their established success and expertise, and to create a national

GREEN ECONOMY

A partnership to support green growth A joint partnership between the Carbon Trust and Siemens to provide UK businesses with green equipment finance worth up to £550m over the next three years has been announced. The new deal will boost green growth and unlock business investment in the low carbon economy – key to the UK’s recovery. The new dedicated low carbon finance scheme will enable UK businesses to invest in cost effective energy efficient equipment or other low carbon technologies. Siemens Financial Services in the UK will provide the financial backing and manage the provision of funding and the Carbon Trust will use its expertise in carbon saving from energy efficient

technologies to assess the carbon, energy and cost savings of any application. This will enable the financing to pay for itself through energy savings. Tom Delay, chief executive of the Carbon Trust, commented: “Driving green growth in the UK is key to our economic recovery. A missing ingredient at present is access to affordable finance to enable business to make green investments. This new major finance facility will improve business competitiveness, cut carbon and boost green growth.”

ManufacturingNews BUSINESS STRATEGY

Integrating for success A strategic upgrade, which has seen assembly, design and support services integrated under one roof, has helped sheet metalwork Broxton attract more sophisticated business. The decision to integrate was made in response to greater calls from clients for higher level sub assemblies, as opposed to piece parts, and more requests for value added design and support services. Broxton’s workforce, based in Cirencester, Gloucestershire, use 3D CAD modeling to create enclosure solutions for a wide variety of electrical products: the process is not only more costeffective, but it minimises the time to market. The company’s ability to handle projects in their entirety, from design to production proved a real selling point for Broxton. Managing director Marcus Ellams said: “The integration of our design and manufacturing services has provided us with the

ability to do everything in-house, rather than having to out-source for particular stages of a project, like many other firms in the industry. This has proved a major advantage for customers who are streamlining their own operations.” The firm recently secured its largest ever single order, a major contract to provide a complex welded assembly for the British military.

Broxton staff at work

AUTOMOTIVE / UNIVERSITY

Tata Motors and WMG join to boost engineering base Tata Motors’ European Technical Centre, a wholly-owned UK-based subsidiary of Tata Motors, announced that it will be expanding its partnership with Warwick Manufacturing Group at the University of Warwick. TMETC plans to increase its team of highly skilled engineers working on the campus by 40% over the next two years. Tata Motors has invested over £85m in automotive R&D at the centre since it was established in 2005. The Technical Centre already has a team of 240 engineers and researchers working alongside WMG colleagues, with 60 of these hired over the last 12 months due to increased R&D investment. TMETC aims to increase the engineering and research force by a further 100 to 340 by 2013. The centre’s engineers, with extensive experience in automotive research, design and development,

work alongside WMG researchers in low carbon technology collaborative R&D programmes. Tata Motors’ Vista Electric Vehicle, which will be built at a factory in Coventry and will be available to fleet customers in the UK later this year, is among the products generated by this collaboration. WMG director, Professor Lord Bhattacharyya, said: “Technology businesses such as Tata are crucial to us solving global challenges that will require new thinking [on] energy [and] climate change related technologies. Tata’s work alongside WMG will meet those challenges and will even lead the field in new low carbon technologies.”

Newsinbrief FOOD AND DRINK

Food and drink manufacturing is reporting strong growth in both the UK and export markets. But despite plans for new investment during 2011, there are still concerns about the stability of the economy and the challenges of a future characterised by mismatched demand and resources. The latest Food and Drink Federation business confidence survey (Quarter four Oct-Dec 2010) showed a generally positive picture with sales up at the end of last year and expected to continue to increase during 2011. TRAINING

International law firm Eversheds hopes to spare company directors jail time with the launch of an online interactive training facility to help businesses get up to speed with the Bribery Act 2010. According to Eversheds, the Bribery Act “will make the UK’s anti-bribery regime one of the strictest in the world” (it creates four new criminal offences). Aimed at employees from all levels within a company, including managers and directors, Eversheds’ anti-bribery@work course conveys the importance of conducting business in a non-corrupt way. AEROSPACE

The Aerospace Growth Partnership, a new government and aerospace group set up to tackle issues affecting the competitiveness of the sector, met for the first time last month. Established to address the strategic obstacles identified by the Aerospace Business Leaders Group, the group will be jointly chaired by Business Minister Mark Prisk and Marcus Bryson, chief executive of GKN Aerospace and chair of UK aerospace trade association ADS’s Civil Air Transport Board. The work of the new Partnership will focus on ensuring that the UK remains an extremely attractive location for aerospace companies to carry out work both on current and future generations of civil aircraft. Bryson commented: ”If the UK is able to maintain its current global market share then aerospace will generate £352 billion over the next 20 years. However, we cannot take this for granted, as other nations are also seeking to expand their own aerospace industries. He also spoke of “fantastic opportunities for growth” the industry is determined to seize.

Newsinbrief TRADE

The Office for National Statistics published the figures on UK trade in January 2011, identifying an increase in both exports and imports. Excluding oil and erratic items, the seasonally adjusted volume of exports was 6.1% higher and the volume of imports was 1.9 % higher in January, compared with December. The UK’s seasonally adjusted deficit on trade in goods and services was £3.0bn in January, compared with the deficit of £5.5bn in December, when imports of aircraft were very high. STEEL ENGINEERING

A two-year £25m capital investment programme at Sheffield Forgemasters, including the re-investment of all profits, is set to gear the business up for greater post-recession recovery. Management at the Brightside Lane-based business, which exports large-scale, highly engineered components, have pumped more than £25m into plant, equipment and processes over the last two years in a strategic move. The investments aim to maximise operational efficiency and to keep pace with the company’s intensive research and development programme. INDUSTRY FIGURES

A research from business insurance company MORE TH>N BUSINESS [sic] reveals that sharp rises in fuel, energy and materials costs has seen annual small business inflation hit 5.8% across the manufacturing industry. Figures for the fourth quarter of 2010 show that manufacturing small business costs rose by an average of 2.1%, reflecting a sharp rise in energy and material costs, which are pressurising margins and making profitability more difficult for small businesses. AEROSPACE

BAE Systems and Dassault Aviation signed a Memorandum of Understanding to collaborate on a proposal for a new unmanned aircraft. The agreement will enable the two companies to establish a framework under which they may jointly pursue this long term business opportunity. This signature follows the United Kingdom and French Governments’ agreement at the Anglo-French Summit in November 2010 to collaborate on the next generation MALE UAS to meet the requirements of both countries.

TESTING

MIRA specialists test Red Nose Day mascot MIRA’s full-scale wind tunnel was used to evaluate the behaviour of a vehicle-mounted version of the new Red Nose Day ‘Car Nose’. The advanced engineering, research and testing specialists at MIRA used the facility, which can measure drag, lift and side-forces, to determine the aerodynamic stability of the Car Nose when subjected to forces equivalent to those that will be experienced when in use at around the national speed limit. The Car Nose was carefully secured to the front grille of seven different types of vehicle – varying from an SUV to small hatchback – using cable ties from the fitting kit provided before being subjected to sustained 80mph wind speeds at angles ranging from zero to 30 degrees. MIRA fluids engineering manager, Dr Martin Jones, who was responsible for the

tests, said: “The Car Nose was unaffected by the wind tunnel runs and remained securely fitted to each of the vehicles, even in simulated crosswind conditions with no discernible vibrations or resulting movement.” The Car Nose is available nationwide from Sainsbury’s, Oxfam and rednoseday.com/ shop, priced at £2.50 with at least £1.50 going to Comic Relief.

The Red Nose Day ‘Car Nose’ aerodynamics have been given the all clear

RAIL

Hitachi confirms new centre, creates 500 jobs Hitachi announced that Newton Aycliffe in County Durham is the preferred site for its planned European rolling stock manufacturing and assembly centre. The investment will generate at least 500 new jobs, and major opportunities for the UK and European supply chain. The announcement came after the Department for Transport decided to proceed with the Intercity Express Programme with Agility Trains, of which Hitachi is part. The commercial agreements for the project are yet to be finalised. Under the IEP, Agility Trains will deliver train services to Train Operating Companies at a fixed price for approximately 30 years using the IEP family of trains.

Since the preferred bidder announcement on 12 February 2009, Agility Trains has worked to improve value for money in response to the UK’s public financial position and has passed on 100% of all value for money benefits to the UK Government. The consortium welcomed the decision, and announced it looks forward to completing this innovative, competitive and complex procurement to provide new Intercity trains on a fully maintained and serviced basis to both the Great Western and East Coast Mainline routes.

News Dates for yourdiary

ADVANCED MANUFACTURING

Cranfield leads in EPSRC centres management Universities and science minister David Willetts has unveiled a £51m investment, part of the Government’s Plan for Growth, to fund nine Engineering and Physical Sciences Research Council Centres for Innovative Manufacturing, five of which will be run by Cranfield University. The announcement forms of high-tech small and medium part of the Advanced sized enterprises, will focus Manufacturing strand of on emerging science including the Government’s Growth biological pharmaceuticals, novel Review and will help stimulate composite technologies, and growth through research in intelligent automation, helping the most promising areas generate the new ideas that will of manufacturing including fuel growth. pharmaceuticals, aerospace The university’s major research and the automotive industry. and innovation capability in Of the £51m investment manufacturing includes design announced, £45m will fund the and materials processing centres, with a further £6m to through to manufacturing support the programme through technology and service, all Fellowships aiming to forge more underpinned by our strength in effective links between business engineering and management. and research. The three EPSRC Centres for Decisions on which centres Innovative Manufacturing, which should be funded were made Cranfield University is leading, by the EPSRC and were based are the Centre for Innovative on independent peer reviews. Manufacturing in Ultra Precision Sixty-nine outline proposals (benefiting from a grant of £5.2m, were received in June 2010 and with an additional £1.2m from were assessed at interview by industry partners); the Centre an independent panel of experts, for Innovative Manufacturing for with 21 invited to go through to Industrial Sustainability (grant will the next stage and submit full total £4.5m, with an additional proposals, for which an interview £1.3m from industry partners); panel was held in January 2011. and the Centre for Innovative Nine out of the 21 proposals Manufacturing in Through-life were funded, with resources Engineering Services. granted according to the needs The latter, with a grant of expressed by the universities. £4.8m and a £3.5m contribution Mr Willetts said: “These centres from industry partners, will be led will increasingly be essential by Professor Rajkumar Roy and drivers of innovation, opportunity design high value systems such and national prosperity. They will as aircraft engines that require combine inventive research and less engineering service and incur business acumen to develop the less whole life cost. high-tech manufacturing industries we need to secure sustainable growth.” Cranfield will be lead university for three of the centres, and will be participating in the running of two more. The centres, Universities and science minister, backed by industry partners David Willetts, at University College London including GSK, Rollson the day of the announcement Royce, IBM and a range

April Throughout April: EEF is holding update seminars on Health & Safety and the environment throughout the UK. For further information and to book call: 0845 293 9850

The Institute of Operations Management will be holding a one day seminar focusing on topics such as summarising the role of supply chain management in product launches. For further information or to book call: 01536 740104, quoting IOM065.

12-14

The SMMT will be at the Commercial Vehicle Show at the NEC in Birmingham. For further information visit www.cvshow.com

The Manufacturing Institute will be hosting a factory tour of Crown Paints in Darwen, exploring their cost reduction to improve their standing during the recession. For further information or to book contact Emma Holt at: emmah@manufacturinginstitute.co.uk

The CBI is holding a senior executive lunch, with guest speaker Adam Sampson from the Legal Ombudsman, covering introductions to the new Legal Ombudsman. For further information and to book call Pauline Chataway on: 0121 450 8976.

May

Altair Engineering has announced the 7th CAE Technology Conference to be held at the Heritage Motor Centre in Warwickshire. For further information please contact Jean-Jacques Appleby on: 01926 468 600

11-12

SayOne Media, publishers of the Lean Management Journal, is holding a Visual Management seminar and factory tour, in association with Siemens. For further information contact Jon Tudor at: j.tudor@sayonemedia.com

PTC will host its UK Technology Forum at Moor Hall, Sutton Coldfield. This free, day-long forum is designed for those interested in all aspects of product development, understanding current trends and learning how PTC’s solutions can help optimise their product development processes. For more information visit: www.ptc.com/events/ technology-forum/uk

The CBI is holding its annual dinner at Grovesnor House hotel. For further information visit: www.cbiannualdinner.org.uk

ManufacturingAppointments UK Appointments Sir Kevin Smith, Nigel Stein GKN

GKN has announced that Sir Kevin Smith has informed the board that he wishes to retire from GKN at the end of 2011 after nine years as chief executive. Smith joined the board of GKN in 1999 as head of its aerospace division and became chief executive in January 2003.

Nosheena Mobarik CBI

The CBI has appointed Nosheena Mobarik, joint chief executive of M Computer Technologies Ltd, and Member of the Council of CBI Scotland, to be the vice chairman of

CBI Scotland when the current vice chairman, Glenn Allison, becomes Chairman of CBI Scotland in September of this year. Mobarik’s term will run for two years.

David Redfern ViiV Healthcare

GlaxoSmithKline, ViiV Healthcare, and Pfizer have announced the appointment of David Redfern as the new chairman of the board for ViiV Healthcare with effect from 1st

April 2011, following the retirement of Julian Heslop. Redfern will continue to serve as chief strategy officer at GSK, which owns a majority share in ViiV Healthcare.

Nigel Brooksby Cogent

Cogent, the Sector Skills Council for the science-based industries, has announced the board appointment of pharmaceutical industry leader and champion Nigel Brooksby. Brooksby will represent the life

sciences industry on the Cogent board. Brooksby’s career in the pharmaceuticals industry spans 38 years and saw him rise through the ranks to the position of Sanofi UK/Ireland Ltd chairman & managing director.

Medical devices company Smith and Nephew has apponted Oliver Bohuon as chief executive. Bohuon, former chief executive of pharmaceuticals firm Pierre Fabrey, will take on his role ad Dave Illingworth steps down on April 14th. Siemens has appointed Chris Rowlands as the new head of manufacturing for the Inverters site at Congleton, Cheshire

Nigel Stein will succeed him as chief executive with effect from 1 January 2012. Stein has been a member of the board since 2001 and is currently chief executive automotive, a position he has held since June 2007.

Industrial construction and maintenance services company Hertel has restructured its UK management team with a number of senior promotions. John Salkeld, regional director, is now covering the South and West Wales as well as the Stanlow Oil Refinery at Ellesmere Port. Alan Gosling is promoted from regional manager to regional director for the North West and North Wales.

Hoppecke Industrial Batteries has expanded its workforce, strengthened its management team and made changes to its board of directors.

Dave McLoughlin takes on the role of regional director – East, which includes the South East. His previous role of regional manager – East, is taken by Dave Briggs.

Headed up by managing director Marc Zoellner, the revised board of the family owned business consists of new UK sales & operations director, David Millett, with Gus Whyte as sales director – national accounts and systems, and Robin Horton as finance and admin director. The Hoppecke management team is now made up of new production manager Robert Brown, special power manager Paul Butchart and technical services manager Alan Newton.

BAE Systems has agreed the appointment of Paula Rosput Reynolds as a non-executive director of the company with effect from 1 April 2011.

Sector skills council Cogent has appointed a new strategy director for chemicals and petrochemicals to support skills development across sectors worth billions to the UK economy. Jenny Clucas has been CEO of the industry-led chemical cluster support organisation Chemicals Northwest for the last three years and is also currently a trustee of Catalyst, an interactive science centre devoted to chemistry.

Dunlop Aircraft Tyres has boosted its global presence with the appointment of a new technical sales manager for the Americas. Ken Hutchins joins the world’s only specialist aircraft tyre manufacturer with a wealth of experience in the aviation industry, having previously worked for aircraft wheels and brakes companies Goodrich and Messier-Bugatti. Based in Houston, Texas, Hutchins will report to DAT’s sales and marketing director David Skepper.

International Appointments Reynolds is currently chief executive officer and president of the business advisory group PreferWest, LLC and a non-executive director of Delta Airlines, Inc and Anadarko Petroleum Corporation.

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

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Answers for industry.

The big picture Sustainability starts at home Charity starts at home, runs the old adage. Well the same principle can apply to sustainability, says the Institute for Manufacturing’s Joe Davidson. Joe Davidson Institute for Manufacturing

Sustainability

has become something of a business buzzword of late. It’s been used to refer to anything from being able to retain efficiency gains after an improvement process, to our ability to sustain the planet and our place on it. Traditional definitions of the term usually fall back on the trinity of economic, social and environmental issues that must be considered together. It’s been framed by the desire of emerging nations to gain equal access to natural resources and the wealth. To those working in a factory in the UK these can seem very lofty and alien concepts. What does sustainable development have to do with me? Why should I engage with this in a meaningful way when it doesn’t have a clear business case attached? The sustainable agenda as framed by environmental pressure groups and lobbyists can seem a little remote from the daily realities of running a factory – but increasingly the green agenda makes sound business sense. Rather than think about sustainability in global terms it helps to look at it on a factory level. Apologies for the lesson in sucking eggs here, but factories take ‘stuff’ (materials, energy, water) and convert it into ‘things’ which people want to buy or lease (or not – first lesson in sustainability; if it doesn’t make money it doesn’t work). In a nutshell rising cost of energy and other resources, coupled with a growing awareness of environmental issues is increasing pressure on margins and could reduce the competitiveness of your business. The factory needs to be able to respond to this pressure and needs to be able to do so better than its competitors. In fact it can be boiled down to a simple case of economics – as resources get rarer, the cost goes up. The restriction of the supply of China’s rare earth metals illustrates this rather nicely. Companies like the brewer Adnams have already started to act. In 2008 the Suffolk-based brewer launched a carbon neutral beer. The company realised that its major resource – water – may not always be as plentiful, or as cheap, so made significant investment in a state-of-the-art brewery. The facility has a special Energy Recovery System that recycles 100% of

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

the steam created during the brewing process and uses it to heat 90% of the following brew. The plant also allows for the recycling of water, reducing its consumption by more than 50%. Unlike Adnams, however, most manufacturing businesses do not have the luxury of building new factories from scratch. They tend to inherit facilities which have evolved over time, with efficiency improvements being implemented on an ad-hoc basis over time. While each change is designed to upgrade performance, over time they can often lead to ‘efficiency drift’. But they can follow Adnams’ lead in acting now. By taking steps to optimise processes in the factory, you can make effective and simple steps to not only make your factory more sustainable, but to reduce your underlying cost base too. By mapping resource consumption, identifying and evaluating process improvements, and formulating practical plans to improve overall factory performance, significant progress can be made – and it doesn’t need to cost the earth either. Clothing manufacturer Brandix, made a 10% reduction in energy consumption, by improving the use of natural light in its factory as well using cheaper LED lighting. Organisations should also place faith in their most valuable resource – their staff. A factory employs people who operate their processes and ensure the smooth running of the plant. If the staff are looked after, appropriately remunerated, they can be motivated to not only implement efficiencies, but suggest areas of improvement and methodologies to improve the factory work. It’s also worth bearing in mind that at some stage your firm will be hit by escalating costs, be it resources, the cost of distribution, or an increased risk that governments will seek to target less efficient companies through taxation. Becoming “sustainable” is a global issue, and involves problems which can’t be solved solely at a factory level. However, by acting on how resources are used within our plants, we can improve the resilience of the business, making it a less unsustainable proposition, and making real difference to top and bottom line performance. Joe Davidson is an Industrial Fellow at the IfM specialising in factory optimisation and sustainability.

Economics Budget benefits industry Steve Radley, Director of Policy, EEF

For

many manufacturers, March’s Budget was the most anticipated for some time. Since the postponement of the Manufacturing Framework and the announcement of the Growth Review, the governnent had spoken repeatedly about sweeping away the barriers to growth and rebalancing the economy. It had also made what it termed ‘Advanced Manufacturing’ one of the first six sectors in its Growth Review, while in recent weeks we had heard a lot about this being a Budget for Growth. But leaving aside all the usual preannouncement hype, the key question was whether the Budget would make Britain a measurably better place for manufacturers to invest and grow their businesses. Given the measures that the Budget announced and the direction of travel that it sketched out, the answers to this has to be ‘yes’, though there is still a lot of work for the Coalition to do. One of the most pleasing aspects of the Chancellor’s speech and the accompanying Plan for Growth was its acknowledgement that Britain is in an international race for investment and that action was urgently needed to catch up with competing locations across the globe. This was never going to be a job for just one Budget and in any race your competitors are never standing still. And this is where the Plan for Growth comes in. It sets our four ambitions for the Coalition to achieve over this Parliament. These are to make the UK the most competitive tax location in the G20, make the UK to best place in Europe to start, finance and grow business, encourage investment and exports and create a more educated and flexible workforce. Just as helpfully, the Plan backs these ambitions with measurable benchmarks for which the Government will be held to account. This is vital as many of our competitors will also be making improvements on these fronts and we cannot afford to let the momentum flag. This meets much of what EEF had been seeking in terms of a Growth Mandate. The Budget also delivered some immediate measures that will benefit manufacturers. In particular, the qualifying period for investments to be included in the Short-Life Asset regime has been extended

The Government has scored with a pro-business Budget but it needs to look closely at environmental taxation if global competiveness is a real ambition, says Steve Radley. from four to eight years. This will allow the many manufacturers who replace their equipment over this period to write these investments off against tax, providing an important cash flow benefit. The research and development tax credit for SMEs has also been made more generous, though there is still work to be done to make it simpler to use and to ensure that it properly covers the significant costs and risks that firms incur at the development stage of innovation. There is also a good case for extending the rise in the rate of the R&D tax credit to firms of all sizes. Other helpful measures include the accelerated cuts in corporation tax, changes to the rules of the Enterprise Investment Scheme to support investment in start-up businesses and extra support for apprenticeships. But the Budget also left significant work to be done. For example, while the tax measures to support investment were helpful, they will only be truly effective if growing businesses can access finance on the right terms and conditions. For this to happen, we need to see more competition in the banking sector and for the government to hold the banks to the new lending principles they will soon be publishing. One area of policy actually moved in the wrong direction and now, most pressing of all is the need to address the threat to competitiveness posed by the government’s policies on climate change, particularly its plan to introduce a carbon price floor, set at £16 per tonne of carbon in 2013, rising to £30 per tonne in 2020 and potentially further beyond this in future years. While we need to encourage investment in new low carbon energy sources, this measure may harm our competitiveness relative to the rest of Europe. And while there were improvements to climate change agreements, some manufacturers face being taxed four different ways on their energy bills. In the coming months, EEF will be campaigning to reconsider its carbon price plans and to take a fresh look at environmental taxation as a whole. There is still a lot to be done to create the right environment for UK manufacturing but we should acknowledge the good start made by March’s Budget. Turn to page 48 for The Manufacturer’s Budget Reaction

Have your say at www.themanufacturer.com

Thelegallowdown Relocating manufacturing operations

When should you concentrate on protecting your intellectual property?

By Matthew Bridger, Senior Commercial Solicitor, Thomas Eggar LLP The Drive to Relocate The number of emerging markets providing substantially lower production costs, large internal markets and preferential treatment of foreign investors has presented UK organisations with some very persuasive arguments for relocating their manufacturing operations outside of the UK. Relocation is not without risk though. There are important practical and legal considerations, not least of which is how an organisation will deal with operating in a different legal system and in particular, how it will protect its intellectual property rights in jurisdictions which may not have a developed legal infrastructure in this respect.

Protecting IP If an organisation’s competitive advantage is derived largely from its manufacturing technology, then protecting the intellectual property associated with that technology as much as possible will be of paramount concern. This can be achieved by carefully considering whether the proposed country or region has an effective intellectual property rights enforcement and protection regime in place. Whilst it is true that intellectual property infringement can occur anywhere in the world, the ability to do so becomes more feasible in jurisdictions which offer little in the way of intellectual property rights recognition and protection. In addition to selecting a jurisdiction which offers an appropriate legal infrastructure, an organisation should also consider whether it would be better served by establishing a permanent presence in the region in order to directly manage the transfer and application of its intellectual property. An important part of any management system will be ensuring that appropriate contractual documentation such as non disclosure agreements, licenses of the relevant IP and automatic transfers of any IP developed on your behalf, are in place with local commercial partners. There are times however, where in spite of an organisation’s best protective and management efforts, disclosure of sensitive business know-

how and intellectual property is inevitable. In such situations, disclosure may not be as counterproductive to an organisation’s ongoing commercial success as may first be feared. Where the value of intellectual property is assessed as having a relatively short lifespan, a business may not be acting in its best interests by allocating significant resources to protect its intellectual property. It may be more important instead to concentrate on taking advantage of the commercial benefits that may eventuate from being the first player in a developing market.

Assessing risk and IP protection Assessing intellectual property protection is therefore one of degree. Rarely will it be possible to carry out an effective relocation process without transferring knowledge, or granting some form of usage rights over your intellectual property. The questions that should be asked at the outset of the relocation assessment process are, “How valuable is our intellectual property?”; “How quickly will the value in the intellectual property diminish?”; “What do we know about our proposed commercial partners in the new jurisdiction and about the legal infrastructure in place there?”; “To what degree should we grant access to, or usage rights in relation to our intellectual property in order to meet our commercial objectives?”; and finally “How can we cost effectively protect our intellectual property?”. The first three questions require an objective assessment which may need to be undertaken by a trustworthy independent third party. The final two questions will require an internal commercial assessment but may also require a legal assessment of the potential risks, consequences and costs of granting rights in or to your intellectual property, to third parties. Adequately addressing each of these questions will help to form a more complete assessment of the economic, legal and practical benefits of relocating all or part of an organisation’s manufacturing operation.

For more details contact: Matthew Bridger, Senior Commercial Solicitor, Thomas Eggar LLP, matthew.bridger@thomaseggar.com

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Master Cutler, Bill Speirs speaking at the Global Manufacturing Festival in Sheffield

Giving a

face to industry

As many manufacturers contend, there is a substantial lack of awareness among the public and wider business of the opportunities available in UK manufacturing. This has led to a shortfall in the skills and investment necessary to sustain a strong manufacturing base. Last month’s Global Manufacturing Festival is one of a number of events taking place this year hoping to improve the image of industry, generate interest in manufacturing and stimulate debate about the issues facing the sector. Tim Brown reports.

While

the message that skills and investment remain absent from manufacturing has been heard throughout the industry and even to some degree in government, for the most part manufacturers have been preaching to the converted. Particularly for investors, politicians and students, the opportunities available in areas of food and beverage, aerospace, automotive and pharmacy – to name but a few – have generally remained undersubscribed. The Global Manufacturing Festival 2011 was held all last month in one of the world’s strongest centres for manufacturing heritage, Sheffield. The celebration culminated in a week of jam-packed activities beginning on March 14 which were aimed at highlighting UK manufacturing now and in the future. The week provided opportunities to visit the factories of some of Sheffield’s world famous engineering firms. Delegates from industry, the banking sector, the media and local and national government, including local MP and Deputy Prime Minister Nick Clegg, were in attendance and learned about local business opportunities and headline manufacturing trends. In addition, the festival aimed to inspire the next generation of engineering

Leadstory Giving a face to industry

talent and bridge the gap between innovation and commercial success by bringing education and businesses closer together.

A passionate issue The week’s programme kicked off with a range of events that focused on issues from taxation policy through to enthusing the next generation of engineering talent. Two notable events included the ‘Rebalancing the economy’ lunchtime debate, instigated by Lloyds TSB, and a series of factory tours at heavy engineering firm DavyMarkham. The former event brought together industry leaders and experts in the fields of accountancy, law and policy, to discuss how the UK should be looking to create a sustainable and balanced economy. The debate drew some large question marks over the definition of these objectives and questioned whether policy drivers truly understand what they mean by what is a fairly subjective description. Brian McKenzie, vice-president of Firth Rixson UK and Europe commented on the inadequacy of definition in political rhetoric and offered his interpretation saying: “At the end of the day I think we are talking about creating wealth. It is all about how you take the resources available and how you deploy them.” The necessity of self-determination in the achievement of success was echoed by other panellists at the event. Graham Honeyman, chief executive of Sheffield Forgemasters, expressed that government must allow industry to get on with what it knows best and stop “tinkering with markets they do not understand”. In particular the focus of discussion settled heavily on the need for industry to realise more universally the necessity of investing for growth. Comments were made about the need for greater capital allowances and better support for R&D from government, but, largely, discussion of investment priorities showed that industry leaders view it as the responsibility of industry itself to pursue opportunities in this area. Hugh Facey, executive chairman of Gripple, and Brian McKenzie both shared that their companies plough around 5% of each annual turnover into R&D, or as Gripple prefers to call it, Ideas and Innovation. Facey stated the challenge: “It is not about government. It is about manufacturing and about how we do it.” The common belief expressed throughout the day was that ‘how we do it’ was unequivocally the responsibility of the individual manufacturers and the people they employ. No matter how simple or complex the manufacturing process or the extent to which a line had been automated, the need for talented people with relevant skills for the strategic direction of industry was highlighted time and again. The Engineering Training Centre in Sheffield spent the day showcasing the way it is working with young people in the area as well as major industry players

Richard Wright MBE at the Global Manufacturing Festival in Sheffield

With the consistent support of Government...this really could be one of the most promising innovations in the long term support for advanced British manufacturing Deputy Prime Minister Nick Clegg

DavyMarkham open day DavyMarkham, an invaluable gem in the crown of British manufacturing that is the Sheffield region, threw open its doors to school children, peers in industry and the general public last month as part of the celebrations for The Global Manufacturing Festival. Jane Gray attended the event and shares her impressions from the open day. The diversity of DavyMarkham’s portfolio is a constant challenge. Touring the factory floor with other industry pilgrims at the DavyMarkham open-day, we passed mammoth structures, and more modestly sized engineering projects, ranging from innovative bridge mechanisms through to components for generators and mine hoisting equipment. While this last market is where DavyMarkham’s bread and butter lies, the company seeks to meet the demands of as many customer bases as possible and to pioneer new ways to apply workforce skills. DavyMarkham’s readiness to embrace the challenge to diversify, which has become prevalent as an outcome of recession, is one of its defining qualities. A quality furthermore, which has had to be created in order to pull the company out of the dire situation it faced just four years ago. According to John Watson, production manager at DavyMarkham the key to this transformation has been the establishment of a culture of continuous improvement. He observes: “Making the workforce believe that they had a future was a turning point for us... one of the most important ways we were able to do that was through our apprenticeship programme. This showed we were really serious about the future.” The DM apprenticeship programme has become renowned in industry circles in the UK and it is now used us a template and a resource for the establishment of similar programmes in other organisations. What makes the DavyMarkham apprenticeship programme so successful is the transfer of quality expectations inherent in the main business. Apprentices thrive under the company’s high expectations – which are understandable given that apprentices comprise 23% of DM’s skilled workforce. Of particular importance are apprentice maths skills. DavyMarkham will accept only grades B and above for enrolling apprentices, a fact that reflects the demanding engineering tasks the company takes on every day, work which requires manufacturing and tooling large equipment with quality tolerances sometimes as minute as a fraction of a millimetre. DM’s rigour in training and practice will hold it in good stead for one of the major new challenges it hopes to take in the coming year - a role in the nuclear supply chain. Given recent events in Japan it is unsurprising that plans for nuclear expansion in the UK have come under close scrutiny and expectations around testing and safety have sky-rocketed. Despite this, Watson believes: “We will see a major step-up for manufacturing procurement for nuclear new-build in the UK in the next 12 months.”And he is not alone. At a separate festival event, a debate hosted by Lloyds TSB to bring together industry, finance and policy experts for a discussion on the challenge of rebalancing the economy, Graham Honeyman, CEO of Sheffield Forgemasters, asserted: “I still believe in nuclear.” The dynamism of the Global Manufacturing Festival in Sheffield has provided many such opportunities to highlight and debate just where manufacturing should be focussing its efforts at this important stage in the economic recovery. The imperative now is not to let the end of the celebrations mark an end to that dialogue. Following our tour of DavyMarkham, Watson expressed how this need for better, sustained intra-industry discussion and openness resonated with the culture of his organisation. “Visitors are always welcome here,” he said. “We are always happy to share what we are doing.”

We will see a major step-up for manufacturing procurement for nuclear new-build in the UK in the next 12 months John Watson, Production Manager, DavyMarkham

like Sheffield Forgemaster in order to ensure that the possible applications of STEM skills are realised early on by those with aptitude. The DavyMarkham factory tour also gave visitors the chance to understand the workings behind one of the nation’s most highly commended apprenticeship programmes. Offering a word of caution, however, Graham Honeyman warned assembled delegates at the Lloyds ‘Rebalancing the Economy’ debate that companies must not be lured into the temptation to take up incentives to over train for apprenticeships that will not lead to jobs. “We need to be very careful with apprenticeships,” he said. “At Forgemasters we have around 30 apprenticeships every year and every one of those leads to a job. Apprenticeships must mean jobs, not just a lot of qualified but unemployed people. That will only lead to disaffection.”

Angels of the North An important and timely event at the Global Manufacturing Festival in Sheffield last month was hosted at the city Cutler’s Hall, and celebrated the contribution of women in manufacturing across the region and the industry as a whole. The event, titled Inspirational Women: Women in Manufacturing, was sponsored by NatWest and chaired by Pam Liversidge OBE, the first female president of the Institution of Mechanical Engineers. Inspirational speakers in attendance included young entrepreneur Katey Felton, founder of a successful Sheffield silversmithing business and Elinor Oldroyd, general manager of Firth Rixson. In addition, a stirring and motivating speech was given by Kathleen Roberts, a veteran of the home front during world war two and one of the pioneering women who proved that the demanding physical work of the steel industry was not beyond female capabilities.

Lead story Giving a face to industry

The event came on the heels of Lord Davies’ report on the number of women in UK board rooms and also the news from business intelligence company Creditsafe that glamour model Katie Price, director of Jordan Trading and KDC Trading, is the most researched business woman in the UK. Both pieces of news provided a provocative backdrop to discussion at the event and prompted questions over the influence of female role models on the ambitions and perceptions of the next generation.

Technology Innovation Centre programme to create three thousand jobs nationwide Whilst at the Global Manufacturing Festival, Deputy Prime Minister Nick Clegg announced, with Business Secretary Vince Cable, the first of at least six Technology Innovation Centres. Details of the Technology Innovation Centre (TIC) for High Value Manufacturing, part of a Government investment of over £200m over the next four years, were given at the Rotherham based Advanced Manufacturing Research Centre. Over a decade, the TIC is expected to generate about £2bn of additional manufacturing R&D and create 3,000 new engineering jobs across the seven institutions that make up the consortium operating the centre (including Sheffield’s AMRC and Nuclear AMRC). The project will allow the centres to create a national network capable of addressing all manufacturing issues. Talking to The Manufacturer in an exclusive interview, Mr Clegg said: “The Centre will translate great research and innovation, particularly in our universities, into commercially

viable products, to make sure that as a country we remain on the cutting edge of new advanced manufacturing. My view is that with the consistent support of Government, which we are determined to give to these sectors, this really could be one of the most promising innovations in the long term support for advanced British manufacturing in many many years.” The TIC will aim to support those sectors forecast to grow significantly over the next 10 years: highperformance batteries for electric vehicles; off-shore wind turbines; a new generation of fuel-efficient passenger aircraft; and the nuclear industry.

Getting up to speed If there is a way to have dozens of kids flock to the shed of a manufacturing company and learn about engineering, the organisers of Get up to speed with Engineering and Manufacturing, part of Sheffield’s Global Manufacturing Festival, seem to have found it. Formula 1 simulators, a World Bobsleigh Champion, supersonic cars and ice cream: it doesn’t get much better than that for a young person, although parents and teachers seemed to be just as excited. Structural support manufacturer Ekspan’s Blue Shed came to life with games and speeches, including one by Deputy Prime Minister Nick Clegg. Sponsored by Tata Steel and organised by Business and Education South Yorkshire, the event aimed to raise interest in engineering careers among young people. Businesses set up stalls, where they met those who, they hope, will become the next generation of British engineers and told them about apprenticeships and career possibilities.

Nick Clegg speaks to the children who attended the Get Up To Speed event

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The Manufacturer.indd 1

19/05/2010 13:43:19

Lead story Giving a face to industry

Commenting on the event, Jackie Freeborn, chief executive of Business and Education South Yorkshire, said: “Businesses came together to celebrate engineering and manufacturing and to get young people interested in pursuing a career in these sectors. We have fantastic companies here, and they are desperate to recruit the next generation of engineers. We are absolutely amazed by how many people turned up: this shows there is great interest we have to tap into and nurture.” Deputy Prime Minister Nick Clegg joined the event and delivered a speech inviting young people to consider a career in engineering. “The UK already has many manufacturing success stories. But a great deal of potential remains untapped. For too long we failed to fully capitalise on our historic talent for building and making things. Now is the moment to rediscover Britain’s capacity for invention and design,” he said. He was followed on stage by racing driver Russ Danzey, Women’s World Bobsleigh Champion Nicola Minichiello and entrepreneur Richard Noble OBE, the man behind the landspeed record car Bloodhound. Expressing concerns over the diminishing number of young people choosing manufacturing and engineering as a career, Noble said: “In 20 years, 60% of the aerospace workforce will have gone. We have to do something about it.”

Sheffield’s contribution recognised Winding down the festival was the Made in Sheffield Awards, held on March 24. The Region’s manufacturers were joined by Sheffield MP and Deputy Prime Minister Nick Clegg MP at the Cutlers’ Hall to celebrate the many great achievements of Sheffield’s thriving manufacturing sector. Clegg shared his own thoughts on the health of Sheffield manufacturing and its place in the wider global economy – a theme which was pertinent to the Global Manufacturing Festival. The awards aim to recognise the companies and individuals who are doing the most to uphold the traditions of the Made in Sheffield brand, through their commitment to quality and excellence in manufacturing. The six awards which were up for grabs included Innovation, Exporter of the Year, the region’s Apprentice of the Year and an overall Made in Sheffield Award. Speaking at the awards, Nick Clegg said he was “convinced with every fibre in [his] being” that manufacturing would be at the forefront of a new model of sustainable growth. He told guests: “Most of the hard work needs to be done by you. You are the innovators, you are the creators, you are the designers. What we have tried to do over the last 10 or 11 months is to use the constrained resources that we have to make sure that the manufacturing renaissance is not just a flash in the pan but is part of a new story of economic prosperity and growth in Britain. It is a naff cliché from a politician but we are really on your side. The hopes of the whole country

are genuinely on what you can achieve.” He took the opportunity to remind guests that the government had to tackle the deficit rather than hand debts on to our children. He accused “lazy” previous governments of massively inflating the public sector, leaving cities such as Sheffield with an over-reliance on public sector jobs. Forgemasters was named the “overwhelming” winner of the main Made in Sheffield Award, having been deemed by the judges to have contributed most to maintaining the national and international renown of the brand for high-quality craftsmanship. Despite a year in the headlines after the withdrawal of an £80m loan from the government, the manufacturing giant has powered on winning contracts across the world. Export turnover now accounts for more than 70% of Forgemasters’ business. Other winners included: Luke Shaw, Firth Rixson (apprentice of the year); University of Sheffield Advanced Manufacturing Research Centre with Boeing (manufacturer support award); Firth Rixson (investment in people award); William Beckett Plastics (exporter of the year award); and AESSEAL (innovation award).

Have your say at www.themanufacturer.com

Top left: Alberto de Benedictis Top right: A Royal Air Force AW101 Merlin on exercise in northern Norway. The AW101 is assembled at AgustaWestland’s factory in Yeovil that is currently building aircraft for export customers including the Indian Air Force. Bottom right: British Army Lynx Mk.9 helicopters being upgraded by AgustaWestland with more powerful CTS800 engines. The first upgraded aircraft deployed to Afghanistan in April 2010, less than 18 months after contract award.

Alberto de Benedictis’s challenge exemplifies the manufacturing riddle faced by the Government and large parts of manufacturing in the UK. He needs to finesse three, at times contrary, forces: the need for more advanced manufacturing to help balance the economy; the demands of a foreign-owned, publically listed parent company; and a dwindling defence budget. He talks to Will Stirling.

Americanised Italian based in London, Finmeccanica UK’s chief executive has become an accomplished broker of complex situations. Alberto de Benedictis runs what is now the second largest defence company in the UK, balancing the interests and needs of Finmeccanica’s diverse portfolio of UK companies – covering helicopter, radar and avionics manufacture, and more – with the requirements of the giant Finmecannica Group. He is on the board of manufacturers’ organisation EEF and the aerospace, defence & security association,

The

Italian’ s job A|D|S, and has spoken to the Government directly on industrial strategy matters. Through these channels, he strives to get the clearest picture of his biggest client’s plans, at a time when the budget of that client, the UK Ministry of Defence, is being squeezed. Finmeccanica is a highly diversified conglomerate, but in the UK it is largely – although not wholly – dependent on the spending decisions of the MoD. For those outside the defence sector, it is hard to appreciate Finmeccanica UK’s reach. The company became better known here in 2000

Interview Alberto de Benedictis Finmeccanica UK

following the merger of GKN-Westland Helicopters and Finmeccannica’s subsidiary Agusta, but for many it is not a household name like BAE Systems or Rolls-Royce (Finmeccanica now owns all of AgustaWestland). Visit the Farnborough International Airshow, however, and its pavilion dominates the airfield near one of the main entrances. Of the 10,000 people it employs in the UK, 3,700 are engineers or scientists. Turnover in the UK in 2010 was about £2.3bn. It is primarily an advanced manufacturer “at the top end, especially prime contracting, large systems integration within the helicopter business and a lot of electronics work, the design and assembly of complex subsystems,” says Mr de Benedictis. “We work with about 1,500 UK SMEs and typically outsource over 70 per cent of production into the supply chain.” What is not sold to the MoD is exported, mainly to the US and Europe. Other markets have developed, for example it has recently sold helicopters for non-military applications to China. The company’s importance to the UK defence industry and supply chain should not be underestimated. The Finmeccanica owned SELEX companies – SELEX Galileo, SELEX Communications and SELEX Sistemi Integrati – have Italian sisters, but are all based in the UK, at sites in Edinburgh, Basildon and Luton with smaller sites elsewhere. SELEX Galileo makes nearly 60% of all avionics for the Eurofighter Typhoon (an aircraft receiving heavy press coverage for its vital role in the Libyan crisis); and plays a lead role in the electronics consortia on the Captor-M Radar system; the Praetorian Defensive Aids system, which detects threats and issues countermeasures; and the Pirate Infrared Search and Track (IRST) system. Then there is missile manufacturer MBDA, formed in 2001 from the merger of EADS, Finmeccania (25%) and BAE Systems (a profile on MBDA’s Bolton factory starts on page 120). In short, while the company is diversified, much of its UK proposition is built around its core defence business. Given de Benedictis’s board roles at EEF and A|D|S, how is government responding to Finmeccannica’s calls for more clarity? The Manufacturer spoke to Alberto de Benedictis about his company’s UK investment programme, its Centres of Excellence, defence cuts and his hopes for a more visible long term industrial picture. Where does the UK sit in Finmeccanica’s global strategy? “From my professional point of view, the UK is the right bridge between continental Europe and the US. It has been in the financial sector, but also in other areas. Finmeccanica has made a big investment in the US, with more than 12,500 people there now. The US works well with the UK; it adds value to having a strong UK base as well. The UK MoD of course is extremely important to us.”

Where are you investing: in R&D, for example? “Setting up the production line for the AW159 Lynx Wildcat costs tens of millions of pounds. We will start delivering this to the MoD by the end of 2012, beginning of 2013. “We have a sizeable capital investment in our electronics companies. In radar, for instance, SELEX in Edinburgh has a lot of clean rooms, which are expensive. The company builds complex electronic assemblies, including radars and laser systems used in countermeasure production and targeting systems. We also develop new types of manufacturing processes. For example we’ve recently started work on a simulation system to model molten metal flows. It tests how different temperature and pressure conditions will affect the flow of metal in sophisticated, high pressure castings used in avionics turrets with our sensor systems, where tolerances are very minimal. Not many companies do this kind of simulation and development.

CEO performance check Ask around the defence industry, the message is that Alberto de Benedictis has done a good job, consolidating several disparate businesses into a group that has become the UK’s second biggest defence company. The softly-spoken, American accented Italian is widely respected within the sector and his peers acknowledge that he lobbies the Government hard with EEF and A|D|S. He has been credited with making a success of AgustaWestland, given the costs and complexities associated with building three distinct aircraft platforms; the AW Merlin 101, Super Lynx 300 and the new AW159 Lynx Wildcat. Italian companies tend to be quite patriotico. Finmeccanica is no exception – it has no non-Italian nationals on the main board, unusual for a big multinational, although in the UK senior management are largely British. But there was a fear among some commentators that, with the full acquisition of AgustaWestland and the merger of the SELEX and Galileo avionics businesses, some parts of Finmeccanica’s UK production would be ‘expatriated’ to Italy. This has not happened and the company is keen to point out the group companies in Britain are deep rooted here. So has he got everything right? One defence insider said that the UK boss needs to sort out turnaround times on supplying overhauled helicopter parts to the Royal Navy and RAF, where it can take much longer than expected for parts like gearboxes to be repaired in Italy and returned. But overall this is a success story. The mélange of different companies that Finmeccanica has put together in the UK were not integrated, so as one commentator put it, “the the potential for something to mess up was quite high. Considering the recession, the defence-heavy weighting and its position today, many people would have done much worse than Alberto.”

Another example is AgustaWestland’s part in the British Experimental Rotor-blade Programme [BERP], now in its fourth generation, to develop advanced composite helicopter blades. The manufacturing process is very sophisticated, says de Benedictis.

“The blades, effectively the helicopter’s wings, are subject to extreme conditions where the tips move at almost supersonic speed. The manufacturing process, applying materials in different layers, improves the life of the aircraft and the efficiency of movement. We believe we have among the most advanced technology in this area in the world.”

Centres of Excellence assist exports Finmeccanica UK has six centres of Research & Technology excellence. The first, for hard blade capability in Yeovil, is researching beyond BERP Phase 4, where the company works with several universities in this area. The other Centres are in radar; thermal imaging – or night vision – technology; cryptology, used for secure communications; electronic countermeasure and counter IED equipment for the MoD.

Biography Alberto de Benedictis Education:

School of Economics of La Sapienza University, Rome Georgetown University School of Foreign Service, Washington D.C.

Late-1970s:

Economist at the World Bank, Washington

1981:

Joins Finmeccanica in New York

1983:

Appointed North American representative

1989:

Senior vice president, North America

1995:

Senior vice president, Strategic Finance at corporate HQ in Rome Responsible for the recapitalisation and privatisation of the company, through one of the largest equity offerings in Europe in 2001.

2002:

Appointed head of business development for Finmeccanica Group

2004:

Head of USA/UK Operations

Alberto has held board positions in NASDAQ and NYSE-listed companies, and has served on audit, remuneration and strategy committees of these Boards. Outside work, he provides time and advice to the American Academy in Rome, a charity which provides American artists and writers with fellowships to live and work in Rome. He is married and has three children.

“These are considered world class technology centres by any standard,” says de Benedictis. “This is important because it provides the UK MoD with a unique capability but is also a good export opportunity for the UK. The measure of success is the sizeable increase in exports into US Department of Defense programmes, where we operate principally through UK primes, but also through Lockheed Martin and Northrop Grumman. Our exports from UK to US ran to £500m last year, and have increased in the last five years by 200 per cent. The UK MoD has adopted, and therefore showcases, some of these capabilities and due to it being a reference customer it increases the opportunity for us to sell to UK’s allies.”

Insuring your investment: apprenticeships and skills “In this country there is a very strong science and technology community...but we always worry about the UK’s skills base. Over the years it has been very difficult to find the right STEM candidates. We have made a concerted investment to ensure that we have the right skills and we build consistent relationships with academia. We work with 27 UK universities, in different fields – it underlines the importance of the scientific infrastructure that you need if you want to operate a World Class capability of this kind. “Across the UK we’d typically have 250 apprentices, 120 graduates and post-graduates going through our programme at any one time, the greater part of which are in engineering and sciences. The apprenticeship training is a big but a very high quality investment. We were awarded ‘Outstanding’ by Ofsted for the quality of the apprentice programme in 2009, which signifies that we’re doing the right thing.

Interview Alberto de Benedictis, Finmeccanica UK

“Our apprenticeship programme lasts about four years, and we’ll invest 2-3 years minimum in our graduate and post-graduate engineers programme. It’s why the average wage for degree-educated people in our sector is significantly higher, about £40,000, than the average graduate manufacturing wage. “In the skill sets we seek there is always a lack of appropriate skills. At the moment we haven’t seen a depressed market for these kind of people, but we still see a gap in the demand and supply for these jobs. Aerospace and defence are fungible, so there is a natural defection of people from defence to aerospace when defence is under pressure.” How does the UK compare with Europe in the calibre of job candidates? “In the UK, engineering has not been seen as a profession in the same way as in continental Europe. My bigger worry, can we keep these businesses engaged with the customer community in the UK, in light of the financial constraints that the UK public sector is facing? We have to accept the fact that this will put pressure on defence contractors in the UK. Exports are not going to cover all of the expectations so we are going to have to continue to rely on government defence spending. We are trying to maintain a level of excellence in our business that hopefully will provide the discriminator. With those come pressures to reduce costs, and improve efficiencies, and we’ll work to meet those.” How has Finmeccanica been hit by specific defence programme cuts? “Nothing is ringfenced. My assumption is that those programmes that deliver the capabilities that need to be retained as prescribed by the SDSR will continue, and we hope, and expect, that most of the programmes we’re involved with are within that envelope. Clearly there may be reductions in some areas, for example a drop in Tornado numbers where we provide a lot of support, and Harrier is terminated, which has affected some areas of our business. We invest for the long term – its visibility that we need, and that is what the Government indicated would be available with the SDSR, the CSR planning rounds and subsequent White Paper on defence industry and technology policy, expected later this year. As far as the Green Paper consultation, there is an increasing emphasis on off-the-shelf purchases and competitive pricing. We have never shied away from either. But these approaches will affect the industrial base, which is high technology. Without defence spending by the UK Government it’s going to be very difficult if not impossible to retain

For the full interview and a video, go to www.themanufacturer.com

the skills required to feed this base. While I’m not advocating an industrial policy I’d like to see how the Government wants to deal with the footprint that is there, and how we can ensure that this footprint evolves in the right direction. The defence industry in the UK is a very large part of the UK’s advanced manufacturing base – you cannot divorce the two.” Are you confident that with the Growth Review for Advanced Manufacturing and the SDSR, and the Green and White Paper, the Government can articulate such a long term strategy? “Reading the tea leaves in the Green Paper, I would say no. If I interpret the interest from senior government officials about promoting advanced manufacturing in the UK, I’d say yes. The question is how to develop a policy that encourages that. The Government is trying to devise the right formula. “I feel – because this is where my investment is – that the defence industry is not necessarily well understood by the Government, yet, and its contribution to the advanced manufacturing agenda is not appreciated. This is where the effort, on my part needs to be, so we at least

Exports are not going to cover all of the expectations so we have to continue to rely on government defence spending. We are trying to maintain a level of excellence in our business that hopefully will provide the discriminator are all starting from the same informed base. Because if we’re not, then policy decisions can be made but they may not do the bidding that we want them to. This is where I’m most closely involved, with A|D|S and EEF, and I’d include the CBI. They’ve worked hard, and we’ve supported their effort, to spread the understanding in an environment with such a big change in government, in direction, in strategy, with the big constraints of the Budget.” How does the company engage with government? “We communicate to government through those three bodies and, where appropriate, directly. We talk to our MPs regularly and we invite them to our facilities. It will take a while – it is impossible to appreciate sitting behind a desk in Whitehall what is involved in creating these systems and the products we create.”

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RegionalFocus In association with:

Manufacturing value added 2007: £16.3bn No. employed in manufacturing: 270,000 No. of manufacturers: 11,940

Key facts and figures The Yorkshire and The Humber region covers North, South, West and East Yorkshire, or the East Riding of Yorkshire, which includes Hull and the northern part of what used to be Humberside.

Regional economy – GVA £87.4bn in 2009, down 2.4% on 2008 (www.yorkshirefutures.com). Gross value added generated from manufacturing – £16.3bn. Manufacturing contributed 27% of GVA in East Yorkshire and Northern Lincolnshire in 2008 Manufacturing employment – 270,000, 13% of the regional economy (2008). The figure is 15.4% in East Yorkshire. 11,940 manufacturing companies (EEF). From 1989 to 2008, total GVA from manufacturing only increased 38%, compared with sectors like real estate and financial intermediation, up by 300% (ONS). Yorkshire Forward claims that operating costs in Yorkshire are 20% lower than the national average Yorkshire and The Humber is the UK’s most dominant region for biomass production. In 2008, the public sector accounted for 23% of employment in the region, compared with 17% in the South East, for example. Big engineering and manufacturing companies in the region include: Allied Bakeries; Arla Foods; BAE Systems; BP Dupont; Coca-Cola Enterprises; Corus; Cranswick; DePuy; Fenner; Firth Rixson; McCain; Nestle; Northern Foods; Rolls-Royce; Reckitt Benckiser; Seven Seas; Siemens VAI; Smith & Nephew; Tata Steel UK; Unilever; Young’s Bluecrest Seafood.

Yorkshire and The Humber Bringing Yorkshire forward With a diverse manufacturing base and few OEMs , the Yorkshire and The Humber region has not only coped well through the recession but is now preparing for very big opportunities in renewable energy manufacture and, hopefully, new nuclear.

Yorkshire

and The Humber contributes about 7.1% to UK GDP and, with below UK average operating costs, a central England location, international airports and good universities, it has become a popular target for inward investment – in the 2009/10 financial year, overseas investors attracted £165m of private sector investment to the region. Yorkshire has few engineering OEMs. Rolls Royce’s presence is currently confined to the £25m Nuclear Advanced Manufacturing Park near Rotherham, but there are plans for a civil nuclear manufacturing plant in the region. BAE Systems’ main regional site is in Brough, East Yorkshire, which makes the Hawk training aircraft but operations there are reduced today since it announced 450 redundancies in 2008. The region has no big car makers. Smith & Nephew’s manufacturing facility in Hull makes more than 300 million wound dressings a year and with about 600 employees is one of the region’s biggest process manufacturing employers. But the absence of big engineering OEMs has helped the region to weather the recession, says EEF’s regional head of external affairs, Andy Tüscher. “The Yorkshire region’s industry is very diverse – the supply chain supplies to many different sectors. The lack of dependence on the big OEMs, such as the North East’s reliance on Nissan for example, means manufacturing hasn’t suffered hugely since 2008,” he says. “This resilience might explain why future inward investment in the region is promising, the best example being Siemens.”

RegionalFocus Yorkshire and The Humber

One to Watch – Siemens brings dawn of new era for Hull

n January, Siemens made Hull the preferred location for its £80m offshore wind turbine manufacturing facility. The factory will manufacture wind turbine nacelles, the technical component of the turbine that converts wind energy into electricity which can weigh up to 500 tonnes, and will assemble these in the towers.

Artist’s impression of the new wind turbine factory and Alexandra port in Hull. Siemens transformed the business outlook in the city when it announced in January that Hull was the preferred location for its £80m turbine facility.

The decision’s impact on the Hull region was profound – Yorkshire Forward estimated that that new factory and the associated port development to handle the massive turbine towers would bring up to 10,000 jobs to the region over the project’s lifetime. Local newspaper The Hull Daily Mail reported that, because the facility would also maintain and overhaul the turbines – about 300 are expected to be built per year – the new jobs would be sustained through to 2049, as the turbines have a working life of 25 years. The news has lifted the mood in a city whose traditional commercial port and industrial activities have waned in recent years. While concerns over noise and visual pollution created by the facility have been aired, chairman of the Victorian Docks Residents Association Gordon Rasen summarised the general feeling: “The city needs something like this – the finance, the prestige and the jobs.” Hull West and Hessle MP Alan Johnson said he had “no doubt” that Siemens would look to employ as many local people as possible. Providing that it goes ahead, Siemens plans to build 5,000 turbines at the factory, each measuring up to 175m in height. Siemens confirmed its decision to build a factory in the UK following the government’s decision last May to finance a £60m port development fund to adapt an East coast port to manoeuvre the supersized towers and blades. It is believed that the council behind nearby South Humber Gateway was bitterly disappointed to miss out as a bidder for the factory location. However all is not lost for the Gateway, as two other international companies, GE and Vestas, have expressed interest in building turbine assembly plants in the region.

Hull, better known as a commercial and fishing port than a manufacturing hub, is abuzz with optimism about Siemens’ new £80m offshore wind turbine factory. Due for completion in 2013, the factory, along with the associated port development of Alexandra Dock and the maintenance and overhaul of the turbines, will provide up to 10,000 new and long term jobs, according to Regional Development Agency Yorkshire Forward, and will keep jobs in Hull through to at least 2049 (see box). At the end of March, Danish company Vestas indicated that Hull was a front runner location for its own

Key people Andy Tüscher, Head of External Affairs, Yorkshire and the Humber, EEF Andy joined EEF in January 2010, as head of external affairs for Yorkshire and the Humber, after leaving Business Link Yorkshire, where he was head of operations. Before Business Link Yorkshire, he was operations director at Business Link Humberside, where he worked from April 2000 until the Regional Businesses Links were merged in April 2008. Andy joined the Army in 1984. After graduating from the Royal Military Academy, Sandhurst, he served in a number of theatres and operational tours, until resigning his commission. On leaving the Army, Andy joined Humberside Training and Enterprise Council in 1995 as an NVQ Development Adviser, and became an Investors in People Adviser and Assessor in 1996, until being appointed as operations manager at Business Link Humber in 2000. Andy is married with three children. Richard Morley, Chair of EEF’s Yorkshire and Humberside Regional Council Richard Morley has worked in the steel industry all his working life, starting as an apprentice at British Steel Scunthorpe in 1967. For the last 26 years he has worked for Caparo, mainly Caparo Merchant Bar in Scunthorpe, where he occupied a succession of engineering and manufacturing positions before becoming Managing Director in 2003. In 2010 he took a new role as Energy Efficiency Director, Caparo Steel Products. Richard has a long association with the EEF and is also chair of the Corporation at North Lindsey College. He is a Chartered Mechanical and Materials Engineer and has an honours degree in Mechanical Engineering, a Masters Degree in Human Resources Management and a Diploma in Management Studies.

One to Watch – Outokumpu: Stainless steel experts bounce back

uta-what? Finnish manufacturer Outokumpu is a Eu4.3bn turnover company specialising in making and processing stainless steel for just about any end application – construction, medical, power gen, aerospace and more. The company has four business divisions in Sheffield over three sites and employs between 500 and 600 people, including two ancillary sites in Aldridge and Coatbridge, Scotland. The group company had a very weak 2009 but, according to its annual report, ‘demand for stainless steel began recovering from the beginning of 2010 supported by improving consumption, primarily in consumer-driven industries,’ and sales jumped 28% last year. As well as having the national distribution and service centre, Sheffield’s operations are about processing the material supplied by the company’s Sweden and Finland sites, so the Stainless Melting and Continuous Casting shop converts raw and coiled steel into semi-finished flat and long form (bar) stainless steel. Outokumpu UK sponsored the Convention at the Sheffield Manufacturing Festival, where managing director Alison Kinna spoke to TM on the company’s view of a recovering economy: “The markets we supply haven’t changed greatly but there’s been a clear change in the order preferences for just-in-time delivery and smaller quantities [which] reflect the tighter times. This really justifies our big sales and service centre in Sheffield, where high volume, small orders are processed that would be more difficult from Finland and take too long to dispatch.” The firm’s most recent big investment was May 2010, when it installed a new bar finishing facility, financed by the Outokumpu Group. Opened by the Duke of Gloucester and involving all the employees, the £15m investment was financed by the parent company. “We’ve also made several smaller investments to take out cost and get the product closer to the end user price point,” says Ms Kinna. “We’ve developed a business service for some products to reproduce the kind of finishing processing that customers often do, which has been a success.” Kinna says the South Yorkshire business community is very joined up and Outokumpu tries to take advantage of business support where possible. It has two people on student placement programmes from Sheffield Uni and the melt shop took on 12 apprentices last year.

UK-based offshore wind turbine assembly plant, to make 7MW turbines. At 187m, these would be even bigger than those planned by Siemens or rival GE. The Global Manufacturing Festival in Sheffield last month emphasised that steel and special metals manufacture is synonymous with this region (see p16). South Yorkshire has the largest concentration of steel conversion companies and precision forgers in the UK. The Company of Cutlers of Hallamshire was formed in 1624, but in fact blade making in the Sheffield region dates back to the 12th Century. Today, big steel working plants like Sheffield Forgemasters, Firth Rixson and stainless steel specialists Outokumpu (see box) work in the same 20-mile radius as advanced tool makers Dormer Tools, welding technical experts The Welding Institute, or TWI, and the Advanced Manufacturing Research Centre (AMRC) with Boeing, all located at the Advanced Manufacturing Park near Rotherham. Tata Steel Speciality went through a turbulent time in 2009 and faced closure. But a cash injection of £6 million in January 2010 to buy two vacuum arc remelting furnaces and specialist testing equipment was the catalyst for change. A company restructuring, lean programme and several ‘hearts and minds’ conversations with staff led to a transformation in the company’s fortunes. It is now profitable and exports speciality steel globally.

R&D, with emphasis on the ‘D’ While steel, engineering and tooling technology define the South Yorkshire manufacturing base, it also has strong academic roots. Sheffield University and Sheffield Hallam University have good engineering departments that feed R&D and graduates to local businesses like Sheffield Forgemasters, which works both ways. A director of Forgemasters, Jesus Talamantes-Silva, is

Sheffield’s ASR Rod Mill produces a wide range of stainless steel rod coil, including non-standard and bespoke sections in round, hexagon, square and flat profiles. remelted ingot is maneuvered to a cooling area at Tata Steel Speciality’s Stocksbridge plant

Regional focus Yorkshire and The Humber

One to Watch – Loadhog: Persistence pays dividends

oadhog, a spin-off of one of Sheffield’s most famous manufacturing sons, Gripple, designs and makes returnable packaging solutions. The company celebrated in March after Australian customer Amcor made Loadhog’s proprietary Smartstak system its standard system for transporting containers of bottles between its Australian and New Zealand operations. The Queen’s Awardwinning Smartstak comprises the Smartpad, an injection moulded, crimp-edged plastic pad, and springloaded Smartframe, which work together to prevent the collapse of bottle packs during transportation or storage. As bottles wiggle in transit, those at the end of a stack often slip out and get crushed – hauliers expect a certain attrition of bottled goods. The wavy-edges of a Smartpad catch the vibrating bottles and prevent them falling off the pad – saving product and reducing cling wrap. Since 2009, Amcor has taken 650,000 Smartpads from Loadhog, or over £5m in sales, meaning that Smartstak revenue has begun to overtake that of the company’s other main product, the Pally & Lid System. This has helped Loadhog into a stronger financial position after struggling to market the Pally and trading at a loss for the first few years. Founded in 2004, Loadhog’s principle product was a lockable wheeled, returnable plastic ‘Pally’ base and lid, an alternative material handling system to wooden pallets and shrink wrap. Pallys have a foot operated brake, and the original concept was to better secure palletised freight in transport,

reducing movement and, through the Lid and ratchet straps, allow better use of space in a container lorry. Loadhog won its first contract with the Royal Mail, who trialled the system with downstream operators like TNT and City Post. But the company believed the real prize was big retail like Tesco and Asda. Despite believing they had a superior product, Loadhog has thus far been unable to persuade retailers to take the leap of faith and ditch the ageold pallet. “We tendered for retail contracts [with the Pally] from January to November 2010, Aussie bottling group Amcor has ordered £2m of Loadhog’s but we’ve found it Smartstak renewable packaging system. The design keeps bottles very difficult to get inside the stack during transit, avoiding breakage. them to switch to a from the top so you can stack to the new system,” says Ed very top of a lorry, while a metal roll Stubbs, who at 28 became managing cage can’t do this,” says Stubbs. “One director in November “It’s not a huge Pally plus Lid has the same capacity risk to trial it because they replace as a roll cage and you can fit 64 into a just five per cent of their pallets or standard 44 foot trailer, but only 40 roll cages at a time. So we’ve ended up cages, allowing 42 per cent increase in back where we started, supplying to fill per vehicle.” the Royal Mail, and we now supply to several postal services in Denmark, Loadhog invested nearly £500,000 Finland and Norway.” in new injection moulding tools to product 40% larger Smartstak pads The Pally system is about half the for Amcor’s latest contract and its weight of the the roll cage used by headcount has grown from 20 people the Mail, and is the same or less in in 2007 to 55. capital cost. “The lid secures the load

now visiting professor for the department of Engineering Materials at Sheffield University. Other local companies like Outokumpu, Tata Steel and AESSEAL recruit from the local academia. In March, in an exclusive interview with The Manufacturer, Deputy Prime Minister Nick Clegg explained plans for the UK’s first Technology Innovation Centre (TIC), for High Value Manufacturing, in Sheffield. The first of a series of TICs nationwide, this one will complement South Yorkshire’s technology strengths well. The new TIC will link with the AMRC, the new Nuclear Advanced Manufacturing Research Centre, taking shape next door to the AMRC, the local universities, and Boeing, a tier one sponsor of the AMRC. Once completed, the hope is that

this body of organisations focused on advanced manufacturing will accelerate new advanced techniques to commercialisation. The nuclear industry is very important to the region. The Government has committed to 10 new civil nuclear power stations to be constructed over 14 years, and it is hoped this will provide the platform to create a world-leading centre for nuclear technology R&D and component manufacture. Peter Birtles, chairman of the Special Metals Forum and a group director of Forgemasters, told The Manufacturer that “despite the tragedy of Japan’s earthquake and the resultant controversy over nuclear power, to bridge the 43 gigawatt gap in the UK’s energy needs between now and 2030, there was little

Regional focus Yorkshire and The Humber

viable alternative to nuclear, which presents a tremendous business opportunity for this region.”

Food, glorious food While South Yorkshire is characterised by metal industries and engineering, and the Humber by the chemical and healthcare sectors (Reckitt Benckiser, Seven Seas, Smith & Nephew), West and North Yorkshire, as well as East Riding, have a very big food industry. About 60% of manufacturing GDP in these counties is food and drink, says EEF’s Andy Tüscher. Allied Bakeries, Arla Foods, Coca-Cola Enterprises (CCE), Cranswick, McCain, Northern Foods, Unilever, Youngs and a host of breweries and other food and drink companies are located in the region. CCE manufactures and distributes over 80 different soft drinks products across the UK. Its Wakefield plant is Europe’s largest Coca-Cola bottling plant, operates 10 lines, employs over 500 staff, runs 24-hours a day and makes range of 80 products that extends well beyond the omnipresent “Real Thing”. With Arla Foods and CCE, Northern Foods is one of the region’s most dominant food companies. Headquartered in Leeds with subsidiaries all over Yorkshire it is a diverse group, making everything from pies to confectionery, soup and biscuits. Three factories in the region closed between 2009 and 2010 following the decline of some unprofitable own label contracts. In 2009 the company, created by a series of mergers since it was founded in 1937 as a dairy business based on Spalding Moor, recorded revenues over £975m. John Smith’s, Tetley’s, Theakstons and several other large breweries are in Yorkshire, as is frozen food producer McCain. In 2007 the famous chip maker installed three £80m wind turbines at its Whittlesey site, the largest chip factory in the UK – reducing its electricity costs by about 60%.

Will rethink on nuclear safety scupper region’s bid to be national new energy hub? With the Nuclear Advanced Manufacturing Research Centre with Rolls-Royce and several regional companies already supplying parts to the nuclear industry, Yorkshire has legitimate claim to becoming a national, even international, hub for nuclear research and manufacturing knowhow. Despite the loss of the £80m government grant for a 15,000 tonne press to make huge cast components for nuclear power stations, Sheffield Forgesmasters is still one of just a handful of companies worldwide that can make some of the components required in a nuclear power station’s core. DavyMarkham, ATI Allvac (fuel rods and bracing materials for Advanced Gas-cooled Reactors), Firth Rixson, Independent Forgings

and Alloys (manufacturer of parts for the new Westinghouse-designed power reactor) and Newburgh Engineering all have the capability to manufacture for new nuclear. The National Metals Technology Centre (Namtec) and the Special Metals Forum are based near Sheffield and advise companies applying to enter the nuclear and other supply chains, such as carbon capture and storage technologies. Yorkshire’s strengths in nuclear was endorsed at the Global Manufacturing Festival, where at the manufacturing leader’s dinner on March 15, procurement director for EDF Energy Alan Cumming strongly intimated that EDF would invest in technology from South Yorkshire if the nuclear infrastructure base kept going as it was. But on March 31, Deputy Prime Minister Nick Clegg cast doubt on the viability of UK new nuclear by acknowledging the crisis at Japan’s Fukushima plant would drive up insurance and compliance costs of new power stations, making it “challenging” for the private sector alone to pick up the bill. This was the preferred model in the UK, but government subsidy now looks unavoidable for the programme to stay on track. Encouragingly, for the region and the UK energy sector, in February Mr Clegg formally launched a blueprint for opportunities for manufacturers and other supply chain partners in the nascent carbon capture (CCS) sector, ‘Carbon Capture and Storage: Technology, Materials and Key Players’, authored by Namtec technologists. Over 100 manufacturers and stakeholders attended the launch conference, hearing presentations on CCS viability from companies including Doosan Babcock, Alstom and Sulzer Pumps. Copies of the publication are available from Namtec, www.namtec.co.uk. The Government has designated Yorkshire and Humber as the UK’s Low Carbon Economic Area (LCEA) for carbon capture and storage. People close to the nuclear industry feel that the world has no alternative to nuclear power. If nuclear safety fears can be placated, with Yorkshire’s nuclear cluster and investment in wind turbine facilities, the region is well placed to make non-fossil fuel energy its core manufacturing industry.

Useful websites: www.investinyorkshire.com – run by Yorkshire Forward with support from UK Trade & Investment www.yorkshirefutures.com www.eef.org.uk/contact/Where+to+find+us

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Retaining talent Replacing members of staff is an expensive business. In industries like manufacturing where appropriate skills can be hard to come by, a high attrition rate could cost more than just cash. Mark Young explores the steps companies can take to hang on to their headcounts.

Employee

retention is a struggle almost all businesses face. A study from the Chartered Institute of Personnel and Development finds that one in four new employees leave within the first six months of beginning a new role; one in three within a year; and roughly half within two years. Considering the cost of replacement – 150% of the departing employee’s annual wages, according to industry analysts IDC – this makes for bleak reading for company number crunchers. Any firm that hasn’t given serious thought to the situation probably ought to just about now – after almost three years of fairly static workforce transition (where the worker has a say, that is) a study by retention consultancy and leaver surveyor and psychometric analysts Talent Drain suggests that 49 per cent of top performers are looking to move roles when the half-life of recession reaches a level where the economic world shows no threat of caving in upon itself once again. Retaining talent is a challenge that’s all the more pertinent for those in manufacturing – an industry, as we are constantly told, which is suffering from a dearth of new available talent and faces an alarming skills shortage when a generation retires towards the end of this decade. Some employee turnover is healthy for a business, though. It brings in fresh blood and, with it, new ideas and refreshed vigour for success. And if a senior member of staff leaves then there might be an opportunity to promote somebody within the business who is ready to make the step up. This might mean retaining talent within the business which could have otherwise left to seek the position they feel they deserve. Gordon Barker, head of consultancy at retention specialist Talent Drain, points out: “If you’ve got an attrition rate of 20 per cent but it’s the bottom 20 per cent that are leaving, that’s a good thing.” The trick is hanging onto the right people, the best people ideally, or, at the very least, the ones you cannot afford to lose.

Getting your house in order Even where talent is available, there’s always competition for the very best. Barker likens the

situation to buying a new house. “Two people decide they want the same one and they invariably go all out to gazump each other. Then someone ends up buying a house for half a million pounds which in reality is only worth £350,000.” Sometimes, you might just be better off with a new lick of paint and replacing the three-piece suite. Ironically enough, Barker points out that retention begins with recruitment. In CIPD’s study, even those that left a role after the first year generally made the decision to do so quite soon after they started. Coupled with those costs of sourcing a new employee and readying them for work, it is important to ensure that the right candidate – one with staying power – is the one that’s recruited.

Case study – MANN+HUMMEL UK Automotive supplier MANN+HUMMEL UK, employing 300 people, achieved a labour turnover rate of under one per cent last year. One of the key principles that has led to this feat has been a commitment to internal promotion which the company believes fortifies employee loyalty and focus. The entire management team, bar one, has held previous positions within the company. In 2010 MHUK was awarded the ‘Investors in People’ Gold Standard, something achieved by only 2% of the companies who apply. This provides a benchmark of HR management strategies and practices for the company to follow. The company believes in employee empowerment and involved staff from all levels in a major new plant layout. It also provided around 800 days of training for its employees last year and runs an Employee of the Quarter Programme.

Leadership & People and Skills

Therefore, CIPD recommends providing realistic job previews for prospective new employees so that they understand what sort of environment the company operates in and what will be expected of them. CIPD says employees should feel that they are in a position to further their careers and where promotions are not feasible, sideway moves should be an option to maintain variability. Barker backs this sentiment. “Organisations need to have meaningful career conversations with talented employees,” he says. “And not so much short term, but longer ones – you need to know where your employees want to be in three, five, even eight years’ time. It might be in the next 12 or 18 months there’s not going to be a promotion but

These days, people are making more demands upon an employer to offer flexible working patterns to maintain different lifestyles Matt Wheeler, Product and Marketing Director, Amano UK

what you can be doing is developing skills and providing experiences which are aligned to where the employee wants to be longer term. “You have to show that there is a long term value attached to staying with your organisation rather than just a quick win by moving to another firm for an immediate promotion.” Employees should also be able to have confidence in the security of their job. If they can’t, they will naturally be keeping at least one eye open for a move. Here, communication to pick up morale is the key. Barker maintains that very few people do research into the balance books of their organisation and fewer still would properly understand it if they did. That means the image of security that workers have about their organisation is primarily belief rather than evidence based. “That doesn’t mean companies should be dishonest in rocky times but it’s about communicating where you are doing well,” he says. “You have to make sure people are aware of successes and are talking about them and can see where that fits into the grand ambition.” CIPD also advises making line managers responsible for the retention rates within their own teams and included this as a metric within the managers’ appraisal process; providing employees with platforms to raise grievances to give them another option than leaving; and, in matters of dispute or where disciplinary action has to be taken, companies should always take care to ensure the individual concerned is being treated fairly and is

seen to be too – this helps to avoid an ‘us against them’ mentality among the blue collar workers towards their white collared compatriots which can lead to discord and defectors. On a rather more austere level, the organisation says companies should consider actively guarding against head-hunters by keeping internal email addresses secret and recommends refusing to work with agencies that have previously poached staff and

Case study – Carl Zeiss Cambridge based microscopy specialists Carl Zeiss has very high staff retention rates – the average employee service across the company is 25+ years and the average age is 50. Operations manager Daren Sheward puts this down to the company’s focus on retraining and re-educating staff and moving them across to different employees where it can. “I’ve got an ageing workforce, but on the plus side I’ve got lots of experience,” he says. “We are very good at realising employee potential, and we rarely lose any employees, except to natural attrition.”

Case study – Constellation Europe Wine bottling company Constellation Europe uses the seasonal nature of its business to its employees’ advantage by offering them a massive 12 weeks holiday each year, provided they are taken outside of key periods. “The key objective is that the site capacity is matched to the demand placed on it; the secondary objective is to get the best work/life balance for our staff,” says manufacturing manager Richard Lloyd. “It’s a pretty easy sales pitch, and we have excellent staff retention.”

Leadership & People and skills

making pacts with other companies to not upset one another’s respective applecarts.

Power to the people In a recent survey by time management technology provider Amano, 68% of workers cited flexitime as a HR policy they would welcome within their organisation. Furthermore, research by recruitment company Hays has found that 85% of employees would be more likely to stay with an employer who offered flexible working. Amano UK product and marketing director Matt Wheeler says the balance of power has shifted somewhat over the last decade from the employer towards the employee in terms of time management. Workers are increasingly looking to take control of their own work and home life balances and empowerment to make one’s own decisions, Wheeler says, can be one of the best tools a company can offer in maintaining a happy workforce. “These days, people are making more demands upon an employer to offer flexible working patterns to maintain different lifestyles,” he says. “In order to remain attractive to both existing and new employees, a company has to keep up with its peers and look to accommodate more family friendly policies. By enabling remote and flexible working schedules, businesses are able to tap into a larger geographic pool of talent and employees can be liberated from the tight restraints of nine-to-five schedules.” However, businesses should not have to be held to ransom – the number one priority is still to deliver the productivity needs of the business and that includes having the right people doing the right jobs at the right time. Amano thinks it can help satisfy both sides of the coin with its range of time management solutions which allows workers to ‘clock-in’ remotely and independently through various different means, including internet sites, mobile phone applications, landlines and software-as-a-service programmes. Managers can also set up automatic data reporting, which they

In this article you can find out: A study from the Chartered Institute of Personnel and Development finds that one in four new employees leave within the first six months of beginning a new role; one in three within a year; and roughly half within two years Analysts IDC say the cost of a new recruit reaches 150% of the departing employee’s annual wages Recruitment company Hays has found that 85% of employees would be more likely to stay with an employer who offered flexible working Employees are increasingly looking to balance their own work/life schedules The Chartered Institute of Personnel and Development suggest keeping internal email addresses secret to ward off headhunters can also dial-in remotely to access, to check on current staffing levels and whereabouts and can receive alarm notifications when levels go beyond a certain point. Employees are also able to manage all of their own holiday rotas autonomously, within the parameters of the business need and other employees’ requests. “If you provide that empowerment but you maintain the control you enable people to make their own decisions while the job still gets done.”

Case study – KK Fine Foods Leyla Edwards, founder and managing director of KK Fine Foods in Deeside, North Wales says the company’s average annual staff turnover of just two per cent is down to good communication, conveying progress and company direction clearly and regularly. A recently initiated profit share scheme for the workers and a share option scheme for all employees who have been with the company for five years and over probably helps. “We are all in it together; it’s a very democratic company,” says Leyla. “A happy workforce is essential to productivity.”

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Turn to page 40 to find out how skills can be retained even when a site has to close

Luke Shaw Electrical engineering apprentice, Firth Rixson Luke Shaw turned down places at universities in favour of taking the ‘earn as you learn’ route at Firth Rixson. The decision is now paying dividends.

Semta

and Metskills’ National Apprentice of the Year for 2010 was nearly never an apprentice at all. After completing A-levels in Maths, Physics, IT and Product Design, Luke Shaw was all set to go to university to study for a degree, having been offered places at both Sheffield and Loughborough. But he decided to attend an interview for an electrical engineering apprenticeship at Sheffield based specialist metals company Firth Rixson and found that learning a trade and earning at the same time with the option to complete his degree anyway was, for him, a far superior option. It certainly seems he made the right decision. He has taken to the task with aplomb and the Semta and Metskills’ judges tipped their hats to his enthusiasm for the job and the excellent progress he has made towards gaining his NVQ Level 3 and BTEC National in electrical engineering. Currently, he is studying for his NVQ Level 4 in engineering management and a foundation degree in electrical technology, gearing him up for a chief engineer or maintenance manager job. “I’ve got no regrets at all,” says Luke. “The apprenticeship has been the complete package for me – it’s been fantastic for gaining real world skills and Firth Rixson is a great company to work for in terms of personal development. Whatever you want to do to help your career the company will support you, both financially and in mentoring.” He says the continued support and guidance he has received from his line managers Ian Turner, Neil Morton and Alison Bettac has been instrumental to his success. As for choosing a career in engineering, “I’ve never wanted to do anything else really,” he says. “In school I was always a lot happier having design technology or ICT up next rather than English or Drama!” Based in Ecclesfield, a town just north of Yorkshire’s steel city, Firth Rixson supplies specialist steel and alloy machine components and support services, primarily to the aerospace, nuclear and other power generation industries. Luke’s role sees him carrying out maintenance on

machine tools and installation of new wiring and lighting systems. He thrives upon the problem solving elements of the work, especially in the electrical fault finding and repair tasks that CV in brief – he carries out. Luke Shaw Luke has also carried out valuable Age: 20 ambassadorial work for both Firth Title: Higher Electrical Rixson and for Engineering Apprentice apprenticeships in Education: the manufacturing A-Levels: IT, Design Technology, industry generally. Physics He had a speaking NVQ Level 3 Engineering spot at last Maintenance month’s Global BTEC National Certificate Manufacturing AA Advanced Apprenticeship Festival: Sheffield, Framework which his company Currently Studying: NVQ 4 sponsored, and Engineering Management, he is also involved Foundation Degree Electrical in the Work Wise Technology Scheme which Education: provides school October 2008: Joined Firth Rixson placements to Metals as Electrical Engineering potential engineering Apprentice. students. Firth Rixson HR Interests: director Alison Keeping Fit Bettac sings his Cycle Maintenance praises. “Luke demonstrates a ‘can do’ positive attitude in everything he does, and this has lead to him participating in projects that are usually way beyond the expectations of any apprentice capability,” she says. “On many occasions, Luke has contributed new ideas to the business, and because of this we have given him the opportunity to realise some of those ideas into either cost savings or process improvement projects, and he has returned the investment many times over from a financial perspective.”

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Join the Big Debate The National Manufacturing Debate May 25, 2011 Can all the good noise about manufacturing translate into a large, long term and stable industrial base, and crucially, lots of jobs? Professor Raj Roy talks to The Manufacturer about a forthcoming debate on this subject.

The

second National Manufacturing Debate at Cranfield University will consider whether manufacturing can contribute to long term job creation and regional economic balance through investment, incentives and innovation. It will discuss the role of investment in accelerating the scale development of next generation of manufacturing applications. Cranfield is due to play an important part in this process in association with five of nine new EPRSC Centres for Innovative Manufacturing. This responsibility for Cranfield was announced in March along with the news that £51m of funding would support the research work. The five new centres, approved by the Minister for Universities and Science, David Willetts MP are: Innovative Manufacturing in Ultra Precision Innovative Manufacturing for Industrial Sustainability Innovative Manufacturing in Through-life Engineering Services (all led by Cranfield University) Innovative Manufacturing in Composites, led by Nottingham and partnered by Cranfield University Innovative Manufacturing in Intelligent Automation, led by Loughborough and partnered by Cranfield What is the aim of the 2011 National Manufacturing Debate and who is speaking? Prof Roy: The National Manufacturing Debate is about engaging with all

The second objective is to examine the movement from technology to through-life engineering services. We’re doing well in manufacturing technologies now, partly because government is pumping money into the Technology Innovation Centres or TICs [£200m to create from six to eight centres over four years]. That’s laudable and I’m very pleased with this move. At the same time, the Government is realising that throughlife engineering services is a new sector that has significant business potential. Up to 60% of some big companies’ revenue, especially aerospace like Rolls-Royce, Airbus, BAE Systems – is coming from through-life engineering services.

What are the big potential markets for through-life support in the UK? stakeholders in UK manufacturing – not Aerospace and defence are doing just academics, not just industry – in well, but high speed rail and wind one venue. This year we want to talk turbine manufacture and maintenance about the role of investment; whether are also hot prospects. Maintaining it’s via the SPRI scheme, bank funding wind turbines is a very big job. If you or other sources, into supply chain want to guarantee energy supply, or development and innovation – which performance of the turbine for a people have always talked about long period of time, that’s when it – in terms of promoting the whole becomes challenging. manufacturing sector. We have a new EPSRC centre in We have several sector specialists, Through-Life Engineering Services such as Sir Alan Rudge, chairman of the here, a national centre hosted by ELA Foundation Cranfield and and Dr Gareth Durham Williams from Universities. Up to 60% of some Airbus. They will Cranfield is talk about their also leading in big companies’ revenues, views of where the Industrial especially in aerospace manufacturing Sustainability like Rolls-Royce, Airbus is going in this and Ultra country and Precision and BAE Systems, how it relates to centres. comes from through life overall national I would like to engineering services well-being. really applaud This is really the Government important. It is not that is now only about making more things, but also investing in manufacturing, both in about regional balance. At some point I areas of research and the TICs, which would like to take this debate to the next will exploit the research very quickly. stage and ask how this manufacturing strategy relates to, for example, the Who do you hope to see at the Government’s financial sector strategy debate, which stakeholders? and macro-economic vision. All sectors. We’ve approached food manufacturing companies and I What specific subjects are being would very much like to see process presented? manufacturing communities coming to Our number one goal was to keep the conference, as well as aerospace, the Debate wide in approach, to defence and automotive – and certainly cover the entire manufacturing sector. energy companies.

Leadership & People and skills

Skillful redeployment Innovating around methods for employee retention is a priority for firms, especially SMEs trying to keep their heads above water. For some though, strategic repositioning or right sizing may mean that jobs and skills will be lost.

The

following account however, shows that the latter part of this scenario does not necessarily need to be the case. There is an opportunity, and a responsibility, for companies in the process of rightsizing to consider the wider needs of industry and the national economy by protecting the valuable technical skills of the staff they leave behind. When chemicals company ICI announced it was shutting its headquarters in Runcorn, Cheshire, in the late 1990s it was feared the closure would have dire economic consequences for the town. But ICI site managers believed the laboratories and office facilities could be transformed as a magnet to attract new business to the area - supported by the “gold dust” of highly skilled technicians who, up until then, had provided support services exclusively to ICI scientists. The site managers purchased the site from ICI, and established the innovative regeneration company, SOG. Dr Peter Cook, a former ICI manager who is now SOG’s CEO says: “Most people thought the only option for this site, with its 1960-style buildings, was to bulldoze it down and create some warehouses and a residential development. We took a different view. We felt the real gold dust at The Heath were the skilled personnel that worked on the site and who supported scientific research here. “These are highly trained people with skills you won’t find in the Yellow Pages. Our business model for purchasing the site from ICI revolved around taking on these skilled technicians to support new businesses. Instead of providing technical support for one single organisation they are now available to help all of the businesses currently located at The Heath and many more companies in the UK and around the world.” Today the 170-plus companies operating from the 60-acre site employ over 1,700 people, more than in the halcyon days of ICI in the 1980s, and resident businesses can access a wide range of specialist services, including scientific glassblowing,

Left to Right, Peter Cook with Task Force members Ross Gill, Chairman Paul Carter and Barbara Cooper and Mike Dawson and Tim Ingleton

precision engineering and bespoke laboratory design and build. SOG’s unique model for regeneration has recently prompted the launch of ‘Fusion’, an initiative which will allows SOG to share its knowledge and expertise with organisations who find themselves in possession of commercial or industrial premises they no longer need. This knowledge, which has led The Heath to success without the need to recourse to any public funding, will be of undoubted value in the current economic climate with its dichotomies of austerity and demand for growth. Fusion uses a four-stage process to advise on the regeneration potential of sites. This process includes an initial Scouting Study, a Feasibility stage that considers potential planning, legal, skills and financial issues, and an Enabling stage that involves the creation a detailed development blueprint. These three steps lead to the final stage – Implementation. Depending on requirements this final stage can potentially involve a long-term relationship, with SOG providing a broad range of support services. SOG is now working on Fusion assignments with several multinational pharmaceutical companies including Sanofi-aventis’ which closes its manufacturing site in Dagenham in 2013, and the Sandwich Economic Development Task Force, set up by the Government to safeguard the skills jeopardised by Pfizer’s decision to pull out of it R&D base in Kent. Highlighting the importance of the work SOG has been doing over the past decade, Dr Cook pointed to the alternative futures that might have been faced by the old ICI site and its staff: “But for the intervention of SOG, a lot of those skilled ICI workers [at Runcorn] would have been lost to the science world - destined to work in supermarkets or as taxi drivers. These are people with vocational skills and its vital for UK plc that we ensure these skills are retained and used to drive regeneration of scientific sites.”

Lean Manufacturing

Handling a Last month Toyota Material Handling Europe, a major subsidiary of Toyota Industries, welcomed over 100 international trade journalists to its first major press event since 2008. Jane Gray attended to learn more about the new products being show-cased, the company’s post-recession strategy and how the famed Toyota Production System is playing its part.

The

international press event, hosted by Toyota Material Handling Europe (TMHE) at its Mjölby factory in Sweden on March 16-17, marks a major milestone in the material handling group’s recovery from a difficult recession. Speaking to The Manufacturer at the event Andrew Elliot, executive vice president of marketing at TMHE, conceded that the company had been hit by a 50% fall in European demand for its products and services since 2008 and that this dramatic decline had necessitated a 15% workforce reduction across its three European sites. Speaking more optimistically of the present and the future however, Elliot continued: “We are now increasing our workforce again in response to strong market recovery.” Particularly strong areas of recovery in Europe unsurprisingly started with Germany and also included Poland. The UK market, although showing promise, has been slower in recovery for TMHE but it could be worse; the likes of Ireland, Portugal and Greece are still struggling to achieve market stability, let alone growth. The key objective of this event, which was overtly up-beat in terms of business strategy despite the current troubles in the company’s home nation of Japan, was to showcase the new material handling solutions TMHE has to offer. In a style which holds true to the company’s lean ethos, hard times and market volatility have been taken as an opportunity for reviewing customer needs and innovating better ways to create more value with minimal waste. What this means in terms of TMHE’s offerings is a massive focus on driving out cost, both in its own operations and also, most importantly, in the operations of customers. This driving principle behind product and process innovation has taken into account not only capital cost but also secondary customer costs.

Lean machines The physical product range for TMHE is, of course, its array of versatile forklift trucks, pallet stackers and order picking devices. Clearly enthusiastic about this product range, TMHE employees treated attending press representatives to a carefully choreographed ‘dance of the machines’ in which the manoeuvrability, smooth hydraulics and other capabilities of the trucks were paraded in flamboyant style.

po int However, as Hans Larsson, director of logistic solutions and development at TMHE, admitted: “While we love trucks we have to realise that, from our customer’s point of view, trucks are just a small part of the end-to-end logistics solution.” Another Toyota representative summed up the overall solutions strategy as: “Finding our customer’s gold.” For TMHE there was naturally no more intuitive way of doing this than through mobilising the experience, knowledge, tools and techniques behind the Toyota Production System – or, as they sometimes prefer to call it, the Thinking People System. Throughout the duration of the press event in Sweden the complete dedication to these principles and the way in which they permeated everything from the presentations given by senior management to the way front line operators behaved and interacted on the factory shop floor, was truly impressive. With regards to applying TPS capabilities to driving out customer costs, and thereby creating a more competitive offering, this meant embarking on an intense analysis of

Damage costs in particular held an exponential ability to multiply the ever present enemy to Toyota employees – ‘muda’, or waste

customer costs and value streams across the lifecycle of material handling applications. This activity revealed that, in comparison to their understanding of customer costs in the 1990s, while there was a similar presence in terms of initial capital costs, energy, service and driver costs, there was a new awareness of damage costs and space costs. Damage costs in particular held an exponential ability to multiply the ever present enemy to Toyota employees – ‘muda’, or waste. It was calculated that for every €1 of damage caused to a Toyota truck and recorded through the need to perform repairs, an average €10 was caused to customer goods and other equipment. This represents a waste relationship which had not previously been fully taken into account and a new effort on the part of TMHE to extend the horizons of the way it perceives end-toend efficiency optimisation. TMHE has thought laterally for solutions to this waste problem and the need to respond to intense pressure from customers who have gained a great deal of lean maturity as a consequence of recession. This new maturity has allowed TMHE customers to achieve low cost bases and inventory stock which they are keen to maintain. A key pathway identified as a means of enabling this has been automation. Larsson described this as “a fast growing and clear trend in Europe.” In its new mission to master the automation challenge TMHE has again used the concept of waste identification as the guiding principle. This has led the company to uncover that, even the most efficient order picker will waste as much as 70% of the time they spend fulfilling a picking task in necessary but essentially wasteful activities such as searching for the location of an item. While preserving the value inherent in the human picker’s ability to select and handle stock the new automated offerings take the opportunity to standardise and automate all other activities to which human intelligence adds no intrinsic value. While automated picking and material handling systems have been talked about for some time, TMHE believes that technology capabilities and the need for new levels of efficiency now mean that there is a tipping point for automation where its benefits will be attractive and realistic for far more companies than ever before.

In order to allow customers to optimise the efficiencies available through automation TMHE has also developed its I_Site software with attendant implementation, training and service experts who work alongside customers to ensure that they understand the lean principles on which the tool is based and apply it to their environment appropriately.

The crown jewels Responding to questioning over the commercial advantage, uniquely available to a Toyota company, to market their lean expertise Elliot said: “Of course we are very proud of the Toyota Production System. It is important for us that people understand our corporate philosophy when we are working with them and we do discuss TPS with customers who express an interest. “We are not actively going out there pushing or promoting TPS to customers, but we have found that, particularly since the recession, a lot of businesses are interested in learning how to make their processes more efficient. In response we have developed our training materials so that we are better equipped to explain TPS to customers.” Toyota has also started delivering TPS workshops at trade shows and exhibitions. Elliot says these have been enthusiastically received. Some might question Toyota’s authority as a lean role model today, given last year’s quality debacles in the commercial car market and also given the maturity of lean understanding which has been gained outside Toyota, and indeed outside manufacturing in recent years. However, the fact remains that, even in supposedly mature lean industries like manufacturing in the UK, there are often limited expectations and understanding about the boundaries of lean improvement. TMHE’s use of lean principles in product development and customer relationship management clearly demonstrates a TPS culture which is about more than just tools and localised efficiency in the order fulfilment process or on the shop floor. Its determination to take the pursuit of value creation and waste elimination beyond even the boundaries of its own organisation lends legitimacy to a corporate tagline which might otherwise seem trite: ‘Stronger together’. TMHE will showcase all its new material handling solutions, including I_Site, and a range of sustainability focused products, at Europe’s major intralogistics exhibition CeMat in Hannover, May 2-6.

Lean Manufacturing

Connecting you to leaner goals

LM Connect on March 24 was an eye-opening event for lean beginners, veterans and role models alike. Jane Gray recounts some of the discussion which defined the day.

The

premise of LM Connect, as with the other ‘Connect’ events run by SayOne Media, is to condense an often difficult researching, resourcing and selection process into the space of a single day. Here the investment being examined was lean enterprise, a proposition interpreted and approached in diverse ways across all sectors of British manufacturing, and parts of the service sector. The thought-provoking conference agenda, that complemented the opportunity to meet potential external lean partners one-to-one, inspired questions across a range of lean and lean-related business concerns. Some of the key topics discussed by delegates and speakers at LM Connect were: the importance of business acumen in lean implementations the responsibility of process and policy drivers to police the way change is achieved, methods for engaging support, and the semantics of change itself

Dr Keith Copeland MBE, a senior engineer at Nissan UK, spoke forthrightly on business acumen and his views were echoed by Ben Salder, senior business improvement manager at BAE Systems Submarine Solutions. Mr Salder challenged delegates to consider how well their organisational structures and working practices were communicated in connection with organisational change. He said that improvement cannot be created without strong understanding of the unique organisational dynamics in any one company, and added that workforce skills and knowledge will be wasted without such understanding. Taking this a step further the event chairman, Jeff McGowan, sourcing manager at Johnson & Johnson LifeScan, made overt connections between the ability of strategy owners in organisations to understand the systemic reasons for failure or sub-optimisation of lean, and the likelihood of that company ever being able to alter its current state. Mr McGowan made leading suggestions about the role of policy drivers in financial services companies in establishing the environment which caused the 2008/2009 global financial crisis. Taking on the challenge of systemic understanding with pragmatic intelligence, McGowan showed delegates how combining commonly used value stream mapping and root cause analysis tools, like the ‘5 Whys’ and fishbone mapping, with systems thinking techniques and PDCA, would alleviate the danger of seeing system problems in isolation. LM Connect was marked by the realisation that there is still a great deal of progress to be made before many organisations can truly feel in control of their end-to-end information, work and material flows. Considering that some of the attending companies at LM Connect had been on their lean journeys for 10-years or more, this realisation may have been daunting for those delegates just taking their first tentative steps into a leaner world, but equally it gave comfort that continuous improvement is a constant learning experience.

Speaker and delegate comments at LM Connect We are just taking our first steps but it was comforting that Keith’s presentation struck a chord with the challenges we are also facing. Graeme Purves, Supply Chain Manager, Mainetti UK (delegate) We have been doing lean for some time but today makes us realise that we are not there yet. This event is a good benchmarking opportunity. Dave Thomas, Factory Support Manager, Mars Drinks (delegate) We have really outgrown the consultant who has helped us start our lean journey. Now we want to look at training. It has been good to see the way others have gone about building internal capability. Tim Capewell, Projects Manager, Koso Kent Inrol (delegate) Without workforce engagement we are not going to get anywhere. However, I fear that lean tools have recently become unfashionable – they are an important means for bringing consistency to the outcomes lean behaviours try to achieve.

Richard Lloyd, General Manager, Constellation Wines (speaker) Insanity is doing the same thing over and over again and expecting different results. Jeff McGowan, Johnson & Johnson Lifescan, (event chairman), quoting Albert Einstein

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Energy

and Sustainable Manufacturing

Taking responsibility for

Three generations of Ford take to the road - Model AA truck, the first vehicle built at Ford Dagenham, the last Cortina ever built and latest Fiesta

energy

While there is consensus among the majority of academics, politicians and business leaders regarding climate change, much more still needs to be done to instigate the change necessary to maintain atmospheric CO2 at an acceptable level. Reducing consumption is key to this change but perhaps, as a high consuming sector, manufacturers need to do more. Tim Brown explores alternative energy use within manufacturing.

The

implementation of an economic level playing field through a global approach to carbon trading is unlikely to emerge in the foreseeable future. While many developing nations and emerging economies such as China and India continue to baulk at the suggestion of a global carbon price, developed economies will have to shoulder the burden of initial cap and trade schemes if they are to gain traction. What’s more, gas prices rose by 20 per cent in 2010 and energy prices are likely to continue to climb and the science supporting the idea of human influenced climate change is growing ever stronger and, if anything, the previous findings are now considered somewhat understated. Thus the impetus for action is obvious. Finding new and more efficient ways to power industrial sites is becoming an increasingly important

Hot Facts Heating is responsible for almost half (46%) of the UK’s climate-changing emissions, mostly from heating rooms and water in homes and workplaces. The Renewable Heat Incentive could cut carbon emissions by 60 million tonnes in a decade. That’s the equivalent of taking almost 2.5 million cars off the road every year for ten years. The UK is committed to producing 12% of heat from renewable sources by 2020 – it is currently just 1%. Source: DECC and the Greens Party

strategy to maintain both prosperity and environmental sustainability. While most businesses have now implemented an environmental strategy, the uptake of onsite renewables and alternative energy generation is still in its infancy. A raft of options exists for the generation of energy and heating that will not only reduce utility bills but are also more environmentally friendly.

Heating Last month the Government initiated its Renewable Heat Incentive (RHI) scheme aimed not only at decreasing energy use but also at generating £4.5bn of investment for the green economy. The Department of Energy and Climate Change (DECC) says it will grant subsidies worth £860m for geothermal heat pumps, solar thermal plants and biomass boilers. The Incentive will include a tariff paying a fixed amount per kilowatt-hour of heat produced over a 20-year period. It will apply to heating systems installed by homes, industry and government since July 15, 2009. Following parliamentary approval for the rules – due in July – £15m will be made available to help cover the price of renewable heating systems

for 25,000 households. The rest of the incentives, including for businesses, will be phased in over the following 18 months. The world’s first financial incentive of its kind to revolutionise the way heat is generated and used in buildings was launched by Energy Secretary Chris Huhne. “Renewable heat is a largely untapped resource and an important new green industry of the future,” he said. “This incentive is the first of its kind in the world. It’ll help the UK shift away from fossil fuel, reducing carbon emissions and encouraging innovation, jobs and growth in new advanced technologies.” In addition, unsecured interest-free EnergyEfficiency loans of up to £100,000 (£200,000 in Northern Ireland) are available for SMEs through the Carbon Trust for replacing or upgrading existing equipment with a more energy-efficient version to fund projects such as lighting, boilers or insulation. A similar scheme is managed by Loan Action Scotland. Natural gas powered micro-CHP units (micro combined heat and power) generate electricity and utilise heat by-product to provide an efficient mechanism for producing both. Companies such as Ener-g provide significant incentives to install one of their CHP systems, often with no upfront cost and a significantly reduced energy bill.

Not such a hard act to follow Solid oak flooring specialists British Hardwoods sources all of its timber from sustainable forests and also recycles all its waste. The company is totally self-sufficient with a Talbotts C4 Boiler producing heat by utilising the 10 tonnes of shavings that are produced per week and thus achieving a zero net gain in CO2 with no fossil fuels burnt whatsoever. The company operates from its own 14500 ft² purpose built factory on the edge of the Yorkshire Dales and the manufacturing facility is heated with the eco-friendly system. In addition, according to managing director Tony Fillingham, the company also generates electricity by using waste vegetable oil and bio-diesel. He says that the result has been much lower costs with the unit able to produce 4.1 million British Thermal Units of heat and 275kva of electricity. “All our waste shavings have been used to heat the factory for the last seven years and we have been independent from the national grid for four years,” he says.

Wind energy finds a fan in Ford

British Hardwoods uses biomass combustion to generate 100% of its energy needs

Of course heating is far from the only onsite alternative energy source available. Ford Dagenham has this year committed to its third wind turbine which will be installed on the eastern edge of the site later this year. The three blade turbine, standing 120 metres tall, will take up its prominent residence alongside the Thames and in doing so will increase the site’s production of clean electricity from 6.7 million kilowatt hours to 11.5 million kilowatt hours (enough to power 1,400 homes).

Energy and Sustainable Manufacturing

Ford’s existing two turbines, standing either side of the Dagenham estate, power the Dagenham Diesel Centre, where production volumes of low-carbon engines are rising. The third turbine was ordered to maintain the plant’s green energy supply. Planning permission was granted for the new turbine last year. Joe Greenwell, Ford of Britain chairman, said: “Ford Dagenham is at the forefront of sustainable business – in both its manufacturing technology and its products. Low emission cars are increasingly in demand, with Ford’s ECOnetic range leading on performance and production.” Dale Vince, managing director of wind turbine partner Ecotricity, added: “When household names like Ford use windmills for their everyday operations, it’s a sign that wind energy has come of age. It’s special to see demand for cleaner engines grow – and built by the power of wind.”

Look before you leap International consultancy Environ works with clients to help resolve their most demanding environmental and human health issues. Although a proponent for environmental improvement, company principal Dave Covell says investing in renewable energy is not always the right decision for companies. “Not all manufacturing businesses are suited to alternative energy sources. The main issue is that many industrial sites, particularly those with large energy consumptions, can only ever hope to generate a very small percentage of their energy from renewable sources,” says Covell. “For many manufacturing businesses it could cost far more to set up and install alternative energy than could ever be clawed back and would not be a sensible business decision. Often, much better financial returns can be made through investing in upto-date energy efficiency technologies like modern air compressors and intelligent control systems.” According to him there are often also location restrictions, with many manufacturing sites being short of space for core activities, let alone having space for alternative energy technologies. Additionally, many could face planning constraints – locations close to residential areas will find alterations to the appearance of their premises, or additional noise, however well-intentioned, hard to achieve through the current regime and emerging localism agenda. “As a rule of thumb, for businesses where energy is more than about 30% of operating cost or where profit margins are very small and energy costs relative to profit made are significant, looking at energy efficiency is a much better option for increasing overall profitability. These companies should make sure they fully understand their energy consumption and the reasons why it varies and as a starting point try and identify what their base load energy requirement is and minimise this.”

In this article you can find out: The science supporting the idea of human influenced climate change is growing stronger and the previous concerns may have been understated. The Government has initiated its Renewable Heat Incentive (RHI) scheme and will grant subsidies worth £860m for geothermal heat pumps, solar thermal plants and biomass boilers. Heating is responsible for almost half (46%) of the UK’s climatechanging emissions, mostly from heating rooms and water in homes and workplaces. Ford Dagenham has this year committed to install its third wind turbine. Not all manufacturing businesses are suited to alternative energy sources.

When household names like Ford use windmills for their everyday operations, it’s a sign that wind energy has come of age Dale Vince, Managing Director, Ecotricity However, Covell does concede that for certain businesses alternative energy is a viable choice. The best approach, he says, is to look for synergies within a business to make the overall process as efficient as possible. “For instance wood, paper and packaging companies can burn their waste to generate heat, while dairies and food manufacturers can use anaerobic digesters to convert their waste products into energy.” Indeed a host of alternative energy sources are available onsite and as Covell rightly points out, playing to the existing strengths of the company is important when considering making the investment in onsite generation. Regardless of the risks, it cannot be denied that under the right circumstance and with the right management, the potential for great rewards exist in the alternative energy arena. No matter whether it be solar, wind, thermal, anabolic or biomass, there are enough options available to investigate whether alternative energy is right for your business and, for the sake of the environment, the time to act is now.

Have your say at www.themanufacturer.com

The Conservative Party’s Chancellor of the Exchequer, George Osborne holds up the red budget box on the steps of 11 Downing Street for the 2011 budget

A budget for making things

Manufacturing took the centre stage in last month’s Budget and many are calling for a feather in the cap of Chancellor George Osborne. A few things still need ironing out, though. Mark Young analyses the measures with feed in from manufacturers, Ministers and trade organisations.

the opening gambit of his address to the House of Commons last month, George Osborne described this year’s Budget as one “for making things, not making things up”. With much of his material sourced from the Plan for Growth released the same day, manufacturing was certainly high on the agenda. According to the Chancellor, the Budget and the Plan for Growth are focused on making the UK “the most competitive tax system for growth” among the G20 countries. Indeed, a Corporation Tax rate of 23%, which will be inacted by the end of the Parliament, is lower than any other G7 country’s current rate. The other aims are to make the UK the best place in Europe to grow a business by encouraging investment and exports and creating a more educated and flexible workforce. The Budget was, by and large, well received. Terry Scuoler, chief executive of EEF, the manufacturers’ organisation, said that Mr Osborne

has “made a crucial down payment on creating a stronger and more balanced economy.” Food and Drink Federation director general Melanie Leech said the organisation was particularly pleased with the scrapping of the extra fuel duty. “Food manufacturing is heavily dependent on fuel and any increase imposes an enormous burden on our members,” she said. The planned enterprise zones and the Green Investment bank found favour with Siemens chief executive Andreas Goss, whose company is building a global centre for urban stability in Newham. “If the incentives are right, this new zone could ensure sustainable employment and a lasting economic legacy for London,” he said. The extra £2bn allocated to the Green Investment Bank was equally well received. “This should put the Bank on a secure footing, giving access to finance that is essential to the deployment of low carbon, infrastructure projects,” added Goss.

Finance

and Professional Services The Budget 2011

You’ve had your cake However, in his response, Labour leader Ed Miliband said that it cannot be ignored that even when all of these measures are taken into account, Osborne had to begin his speech with downgraded predictions of economic growth this year from 2.1% to 1.7% and from 2.6% to 2.5% in 2012. He refused to allow Osborne to blame the snow in December for the fourth quarter 2010 economic contraction since France, Germany and the USA all also suffered severe adverse weather conditions and grew none the less. If the Conservatives were to put the growth in Q3 down to their policies in last June’s ‘emergency budget’, then they must also accept that they caused damage in Q4, the former Energy Secretary admonished. But even Mr Miliband struggled to provide instant indictment of the chancellor’s individual measures this time around. “As for today’s policies, we’ll look at them,” he said, to much haranguing from the Coalition benches, which were only stifled upon stern request from the Deputy Speaker. That doesn’t mean Osborne will get away Scotfree though; his predecessor and counterpart, the shadow Chancellor Alistair Darling, will surely have questions to ask.

Measures in the budget which affect manufacturers directly Corporation Tax to drop 2% this year and 1% over each remaining year of the Parliament Funding will be provided for an extra 50,000 apprenticeship starts over the next four years, including 10,000 higher apprenticeships Carbon floor price set at £16 per tonne now, £30 per tonne by 2030 Short life capital allowances increased from four to eight years R&D tax relief for SMEs to increase to 225% next year Government to push for ‘Nobel Prize’ style engineering award Twenty-one new ‘enterprise zones’ to be created around the country in manufacturing heartlands, offering companies in these lower business rates and simplified planning rules Funding for 24 University Technical Colleges

(The Chancellor has) made a crucial down payment on creating a stronger and more balanced economy Terry Scuoler, Chief Executive, EEF One of the main sticking points for manufacturers is the carbon floor price. Mr Osborne said he was setting a price of £16 per tonne of CO2 emissions starting in 2013, rising to £30 per tonne by 2020 in the interests of transparency. But one company with a £100m turnover intonated to The Manufacturer that the measure stands to increase its energy costs by £200,000 per year. The fact that Britain is the first country to act in this regard certainly seems to contradict the competitive aims. As Roger Salomone, energy adviser for EEF, points out, the 2020 floor price is almost double the forecast for the EU ETS price which European competitors will pay. “This could have serious implications for the long run sustainability of energy intensive sectors, like steel, in the UK,” he said. “Manufacturers will be facing up to four different carbon taxes on the electricity they consume: the cost of the EU ETS, the CRC, the climate change levy and, now, the additional uplift of the floor price.” Business Minister Mark Prisk said the floor price has to be considered alongside a rise in the discount of the climate change levy (CCL),

£100m for four new science centres Fuel duty increase suspended

Taxing Growth The UK’s antiquated system of capital allowances adds to the cost of investing in new technologies and growth in the UK.

Antiquated tax ststem raises costs of investing in UK Average number of years for tax system to recognise cost of capital equipment

Source: US Congressional Research Service, PWC and EEF

The Budget 2011

from 65% to 80%, but he conceded that this “doesn’t wholly deal with the problem”. By EEF’s calculations, in 2013 the value of the CCL rebate will be a quarter of the increase imposed by the floor price. “Thereafter, that differential will grow significantly,” said Salomone. “The carbon price has a steep upward trajectory whereas the rebate is fixed. So whilst better than nothing, the rebate won’t address the issue.” Mr Prisk said a joint strategy team involving the relevant government departments will look into other ways companies can mitigate the costs, including the adoption of new energy generation forms. He pointed to Rio Tinto Alcan in Northumberland whom he visited recently. The company has begun to use wood pellets to source some of its supply which benefits from being cheaper, better for the environment and carrying less secondary tasks – like cleaning transportation – than coal. It also offers no loss in the ability to control the energy source.

Scratching at the surface While an increase in R&D tax credits for small businesses to 200% this year and 225% next year looks good on the surface, government has been accused in some circles of failing to address the underlying issues prevalent in this area. Stuart Fell, chairman of West Bromwich based SME Metal Assemblies, a supplier of pressed and welded assemblies to the automotive industry, says that the way the system is calibrated makes it difficult for small businesses to benefit. “For too long, the tax relief has applied more to the ‘R’ than the ‘D’,” he said. “We are a small business, where new ideas are devised and applied to products by the same team in the same process. It’s easier for big corporations to chop up R&D into distinct parts, but SMEs neither have the staff nor structure to disseminate the two things to satisfy the current criteria.” Andrew Churchill, managing director of JJ Churchill Engineering, added: “The credits are very easy to claim if you are at stage one and two of the Technology Readiness Scale (TRL) but it gets very much harder there on in. It’s good that the relief has been increased for SMEs but I would have liked to see it widened to include innovation.” The introduction of the Patent Box, first revealed in November and budgeted for now in the Red Book, is no consolation. Said Churchill: “I think it’s patent stupidity. It’s only going to benefit a very small number of very large firms – those in the pharmaceutical industry, for example. Perhaps they’ll say they are entitled to their day in the sun.” Churchill was more upbeat about the doubling of tax relief on short life assets from four to eight years, even though the rate of relief has been lowered from 20% to 18%. “I was surprised to the degree to which they’d moved and how quickly,” he said. “EEF recommended seven or eight years

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and they’ve gone for eight. We’ve got exactly what we we’re looking for.” Fell, however, is not convinced that the measures go far enough, considering the situation in competitor countries. Assets for many companies fall outside the short life category and, for these, it will take over 30 years to fully write down the investment, especially given that the relief rate has now fallen by 2%. “In the US, the taxation system means it takes just one year to write off the same piece of equipment, meaning they get a considerable tax saving and can reinvest in new, more productive equipment on a much shorter cycle,” he said. “The Germans and the French can write down machinery in as little as ten years. Compared to 30 years, that is a huge gulf. I’m not convinced government sees the validity of this, despite the short life change. To put it in context, our business has trebled in size in 10 years. But today, our

For too long, the tax relief has applied more to the ‘R’ than the ‘D’ Stuart Fell, Chairman, Metal Assemblies investment needs in order to grow are about double our net profits. For SMEs the gap between the investment they require and the money available is a barrier.” While recognising that disparity can exist, Business Minister Mark Prisk contends that government has exceeded a lot of people’s expectations with the balance that has been struck here. “We’ve addressed the short time issue but in a way that still fits in with a broader aim of simplifying the overall tax benefit,” he said. “If you look at the net benefit in terms of the capital allowances regime, most manufacturers would, by 2014, still find themselves enjoying relief – many were concerned that our changes would remove that.” One business suffered as a result of this year’s Budget address before it had even finished. Bookmakers Ladbrokes said it had to pay out a four figure sum to customers who had placed bets at 16/1 on Justice Secretary Ken Clarke falling asleep during proceeding. Seventy year old Mr Clarke denies the inopportune attack of the sandman but Ladbrokes felt its hand was forced after Ed Miliband referenced it in his response. The company’s Alex Donohue told the Guardian newspaper: “Ed says he caught Ken napping, which is good enough evidence for us.” Whether or not Mr Clarke had drifted off, it’s not clear just yet if Government has fully woken up to the needs of manufacturing. There’s evidence to suggest, however, that it might be coming to. Turn to page 61 for more reaction from Business Minister Mark Prisk MP.

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Organic growth in favour as investment sentiment picks up Lloyds Bank Corporate Markets and TM’s investment survey reveals mid-caps are being subjected to rising pressure from shareholders to achieve higher dividends whilst their new investment plans include a limited amount of M&A and no divestment. Mitigating higher input prices is a common requirement for finance while half of the companies said banks had supported them in the last two years.

Chancellor

of the Exchequer George Osborne focused about three quarters of his 2011 Budget statement on business growth. He mentioned investment 20 times, enterprise 15 times and manufacturing 10 times. Even though some of the measures may seem a little mild to SMEs struggling with rising input costs, the message from Westminster was clear: private sector growth must take the place of government deficits. Is business in the UK ready to finance this new growth, after a prolonged period of little expansion beyond some organic growth? The Lloyds Bank Corporate Markets and The Manufacturer Investment for Growth survey suggests yes. We polled 33 large manufacturing companies across a full range of sectors*, on their attitudes to investment this year. All survey respondents are based in the UK, nearly all have a turnover of over £200m and 34% are made up of businesses with greater than £1bn turnover. For this survey, the surveyed group is referred to as mid-caps. 66% said that they planned to invest for growth in the next six months; of this, half said within the next three months. Most of the companies polled said that growth through merger or acquisition was either not likely or a just a part of their growth strategy. This is still an improvement on 12-months ago, when a flat ‘no’ would likely have been the stock answer to M&A.

Encouraging growth For companies eyeing some form of growth in the next 12-months (79%), organic growth was the most popular form of the standard types of growth funding that includes M&A, capital restructuring and replacing capex investment. Half of the 11 companies who expected some growth to come from M&A (42%) were companies with a turnover of greater than £1bn. But as the other half (20% of the pool) are smaller companies up to £500m turnover, this is an encouraging sign for manufacturing.

When will your company start to plan investment for growth?

Answer Within 3 months Within 6 months Within 12 months or more None of the above

Response(s) 19 3 4 7

Ratio 58 % 9% 12% 21%

Seventy-nine per cent of companies said that capital restructuring was unlikely while 66% of companies expected replacement capex investment to form a large part of their growth strategy. This reflects the importance of capital expenditure for companies to remain competitive in a very open global market for manufacturing. It also emphasises the importance, for many companies, of high capital allowances to facilitate a return on investment within the economic life of a machine. Only 7% of companies expected no organic growth at all over 12-months. In the UK, domestic mid-caps often evolve from family-owned histories and tend to be quite partisan on ownership. Even so, more than 90% of all respondents who replied had no plans for divestments of their business in 2011/12. This will also explain why

Is the growth likely to be:

*Companies were surveyed from sectors including: aerospace, rail & other transport; automotive; cast or forged steel components; chemicals, petroleum & nuclear fuel; electrical goods; glass, ceramics and other building products; food & drink; industrial and office equipment; metal products & fabrication; paper & paper products; plastic & rubber products; print/publishing

Specialfeature Investment for Growth survey

Industry analysis from Lloyds Bank Corporate Markets Manufacturing is currently driven by economic growth in Asia Sixty six per cent of UK manufacturing companies are confident of growth opportunities. While the UK manufacturing PMI in March dropped unexpectedly to a 5-month low of 57.1, economists attribute this is to lower exports following unrest in the MENA region and Libya, and manufacturing growth is expected to continue through 2011. The sector has demonstrated resilience following the economic downturn and opportunities for growth exist, particularly for those industries in high value-add areas that extend into the growing markets of East Asia, such as, chemicals, pharmaceuticals and aerospace & defence. Although manufacturing may be more prone to rising input price pressures than the services sector, increase in global demand and the competitive boost from Sterling’s weak exchange rate are expected to fuel a strong improvement in manufacturing output over the coming months. This will aid the UK rebalancing, and with the majority of major manufacturers also now sitting on fairly healthy balance sheets, it is expected that investment and M&A activity will grow. Reinforcing this outlook are the results of a recent

survey conducted by Lloyds Bank Corporate Markets in conjunction with The Manufacturer. Aimed at finance directors within manufacturing companies, the research sought to assess market sentiment regarding growth opportunities in the sector and the implications for funding. The results paint an encouraging picture for the sector. Over 66% of companies surveyed are looking to plan investment for growth in the next six months. In terms of the key drivers of growth, 50% expect to engage in some M&A activity, while 84% plan to invest for organic growth via increased capital investment. With this performance increase, expectations among shareholders are rising. One third (33%) of respondents stated that for large and publicly listed companies within their sector, there is an expectation among shareholders for improved returns via M&A, while, perhaps unsurprisingly, 68% are eager for improved returns via dividends. Companies are experiencing stronger inflows of new orders from the US, Germany and the MiddleEast, with particular emphasis in China and the wider Asia-Pacific region. Outside the UK, Asia-

interest in M&A was soft, despite manufacturing riding high in the recovery cycle. For listed companies, 67% said that shareholder pressure for higher dividends is rising – no great shock – with little interest in either share buybacks or special dividends. Despite the poor bank-industry public relations, 50% of this survey said that in the last two years banks had been generally supportive of their funding needs.

For large and publicly listed companies in your sector, is pressure increasing from shareholders for better returns, in terms of?

Pac is identified as the area with greatest opportunities for organic growth through capex investment as a result of low labour costs, increasing domestic consumption, huge infrastructure spend, a burgeoning middle class and favourable corporate laws. While Asia-Pac and BRIC countries will continue to be the driving force in global manufacturing economic growth in the short term, there is still a tremendous amount of investment going into these countries. As they evolve from traditional production economies to consuming economies then the slowdown in growth will be picked up by the next generation of BRICstyle economies; Bangladesh, Egypt, Indonesia, Mexico, Nigeria, Pakistan, Philippines, Turkey and Vietnam. The majority of large private and quoted companies have weathered the storm well and, over the last two years, 87% of survey respondents advised that their banks had been supportive of their needs. This trend needs to continue if we are to see a return to economic growth, while an important focus will be the provision of cash flow and ensuring businesses have sufficient liquidity to meet future requirements.

However, additional comments like ‘funding is available but the cost is increasing’ (from a £250-£1bn company), and ‘unsecured funding is proving more and more difficult’ show a disconnect between the message from the banking sector on lending, and the experience of pockets of industry. A consistent message in these finance directors’ postscript remarks was that funding is needed now to help mitigate rising raw material and energy prices. Meanwhile, companies are working on strategies to pass on cost increases to customers. Overall, as nearly 80% expected some form of growth this year, the outlook for manufacturing looks healthy, mitigated by rising input prices, unfavourable changes to regulation and the cost of carbon emissions.

Have your say at www.themanufacturer.com

MRO outsourcing? Outsourcing maintenance, repair and overhaul (MRO) can offer real business benefits in terms of stock management, process improvement and technical support, reports Brian Davis.

Up to half of MRO inventory at a new clientâ€™s site is for insurance spares, and is unlikely to be used for 5-10 years! Typically we reduce total inventory by 20% Ben Caldwell, Chief Executive, IESA

Manufacturing

plants often carry considerable surplus spares and consumables as insurance for planned maintenance and breakdown, involving thousands of stock keeping units (SKUs) which vary in volume and value. Demand patterns for MRO items tend to be erratic and some companies inevitably hold unnecessary volumes of spares to avoid potential downtime. Increasingly, larger companies are outsourcing their MRO spares management to specialist distributors who are geared to optimising inventory held on site. Routine inventory profiling, often using specialist software, ensures better alignment with consumption patterns for key components and consumables. With the benefit of more accurate inventory data, key products and components can also be standardised throughout plants. Jeremy Salisbury, head of marketing at Brammer, a leading supplier of MRO products and services, insists: â€œOutsourcing MRO is not simply a matter of cutting the price of spares. The risk of production downtime from a disparate and poorly organised MRO supply chain and stores environment is entirely

Operations maintenance and repair

avoidable.” Brammer offers a dedicated in-site service geared to meeting individual customers’ demands in terms of maintenance spares management. “Total component acquisition costs can be significantly reduced as the company is only dealing with one supplier for all its MRO requirements, maximising the benefits of supply chain consolidation.” Salisbury argues that the cost of the product accounts for only part of the cost of an MRO operation. “Many companies hold too much inventory in terms of engineering spares and consumables and don’t have good data on usage patterns, which impacts on maintenance management. Detailed management reporting creates greater transparency and provides the basis for stock profiling, redundant stock analysis and targeted reductions in inventory and purchasing costs. Improved stock management data, combined with technical and application advice, can help engineers standardise their spares strategy, delivering cost savings through product and brand standardisation and lower total cost of ownership, while reducing spares stock holding and working capital.” Brammer has been in the MRO supply business for more than 80 years but introduced the in-site service around 10 years ago. “We also provide application advice and condition monitoring, to help optimise production efficiency and minimise downtime,” he says. Brammer services larger production sites across a range of industrial sectors including automotive, food and drink (including Heineken, Coca Cola and Cadbury), metals (Alcoa and Alcan), packaging (Rexam and Crown Packaging) and pharmaceuticals (Johnson & Johnson). “Some think outsourcing to a third party is simply a matter of getting lower prices, but that’s only part of the story. While our buying power enables us to offer highly competitive pricing, we also add a lot more value in reducing working capital and optimising production efficiency, helping companies identify operational cost savings and opportunities for continuous improvement.” The results speak for themselves. Since 2005, Brammer has delivered £90 million worth of operational cost savings to over 2000 customers in the UK.

An integrated approach Integrated Engineering Stores Associates (IESA) is also delivering major cost savings and improvements in management information for big league players in the UK and abroad. The company has come a long way from first manufacturing shovels and spades in 1760, to providing a streamlined, integrated order process management service to manufacturers in food and drink (including Premier Foods, Northern Foods, Bakkavor, Carlsberg Brewing), automotive (Cummins Engines), pharmaceuticals (Astra Zeneca), packaging (SCA and SAICA Packaging) and FMCG (Proctor & Gamble and Kodak). Ben Caldwell, IESA chief executive is the great, great grandson of the original founder, and claims

he pioneered the idea of offering an integrated supply solution in the early-1990s. “I realised that the main cost was not simply carrying excess inventory but the cost of procurement and supplies management itself. There’s a process cost, people cost and inventory cost. Consequently I went to British Nuclear Fuels and suggested that the total cost of acquisition outweighed the cost of the goods, and offered a more integrated solution where we would handle suppliers direct. Consequently BNFL gave us a £1.5 million contract, boosting our turnover by 50% at a stroke, and within 18 months we received similar contracts from GlaxoWellcome (now GSK), then Siemens Power Generation.” Today IESA is particularly strong in the food sector, and recently signed a 10-year supply chain management agreement with Premier Foods, the largest UK food producer, to manage engineering stores at 10 of the company’s UK sites along with procurement services at all other locations. “We are managing all the engineering stores within Premier

Outsourcing MRO procurement and stores management shouldn’t cost you any more for a vastly improved service Paul Lynch, Sales Director, Integrated Solutions Division, Eriks

Outsourcing MRO spares management offers the following key benefits: 25-30% inventory reduction Reduced inventory costs with reduced working capital Reduced time spent on stores management and personnel costs Electronic catalogues for fast access to competitively priced spares Improved stock management data and transparency Standardised buying patterns Reduced downtime Better planning for scheduled maintenance and breakdowns

Operations, maintenance and repair

Foods’ grocery division, including a portal of engineering catalogues covering their entire MRO requirements.” Centralised stock control and invoice management offer significant benefits. “Instead of processing 150,000 invoices a year, Premier Foods now only process 12 annually electronically. We’ve combined their total spend with our total spend, so we have significant leverage in the MRO market and are now working on commodity strategies to ensure that they get best of breed for the full spectrum of supplies,” says Caldwell. “Often we find that up to half of MRO inventory at a new client’s site is for insurance spares, and is unlikely to be used for 5-10 years! Typically we reduce total inventory by 20%.” Supplies data is shared openly

The risk of production downtime from a disparate and poorly organised MRO supply chain and stores environment is entirely avoidable Jeremy Salisbury, Head of Marketing, Brammer

across all the sites. IESA currently manages 93 stores in the UK and Ireland, managing about 600,000 stock lines, and places 11,500 purchase orders a day. As a rule of thumb, companies seek double-digit savings on MRO procurement, consistent pricing, a reduction in administrative workload, and dramatic reduction in the time wasted by engineers collecting MRO tools and materials. IESA will often purchase into a company’s existing stock, providing the client with a significant cash injection to the balance sheet. Stock items are then managed via an IESA stores facility on site. There are two models for MRO supplies management. IESA either employs its own people on client sites or provides software so clients can continue to use their own personnel on site. Either way proves to be an attractive financial proposition for clients. “Generally, we take over their existing overhead and reduce it by 15-20% in terms of their current costs,” remarks Caldwell. IESA runs their supply operation on SAP in concert with custom-designed software to run the stores and catalogues. “No two clients are the same, so we have about 150 bespoke packages to serve clients. We mostly serve companies with spend exceeding £500,000. However, we have developed Internet catalogue portals which allow smaller firms to benefit from our leveraged prices.” IESA is an entirely independent operator. “Unlike some of our competitors, we solely provide integrated supplies management and operate an

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open book with clients and suppliers, so our margin is understood and accepted.”

No on cost Some manufacturers are wary of outsourcing following bad experience in other areas like IT services. To the contrary, Paul Lynch, sales director of the Integrated Solutions Division of Eriks, maintains: “Outsourcing MRO procurement and stores management shouldn’t cost you any more for a vastly improved service. Manufacturers should focus on their core competencies, whilst treating the engineering store as a support service.” Eriks offers a team of people onsite within a client’s engineering stores either utilising the customer’s ERP system or installing a bespoke barcoded stores management system. “Our solutions are tailored to meet individual company needs,” says Lynch. Eriks currently operates a 12-person, 24/7 MRO supplies and management operation at a major food manufacturer, which has benefited from significant inventory reduction, product standardisation, improved service levels and reduced downtime. Eriks also operates in a number of large paper mills, analysing consumption patterns to ensure that the right spares are available at the right time. Eriks aims to ensure that the stores function dovetails into a company’s continuous improvement activities. For example, at a number of sites they provide a spares kitting service for predictive maintenance purposes. Furthermore, as a manufacturer of seals, hose assemblies and gaskets, Eriks can offer customised solutions from its own manufacturing facilities when problems occur. According to Lynch inventory reduction is likely to be of the order of 25-30%, along with double digit reduction in total acquisition costs. “There is no question on cost, because essentially all our contracts produce savings for the customer, so the customer’s costs can only shrink.” Generally clients use a mix of Eriks personnel and TUPE (Transfer of Undertakings Protection of Employment) transferred customer staff for MRO stores management. Eriks has an electronic catalogue with over 250,000 items that clients can access, and claims to be the largest MRO industrial services provider in Europe, serving a broad spectrum, from food, paper, print and packaging, to pharmaceuticals and automotive. Their Integrated Solutions division now runs over 100 full time managed operations in the UK. Though outsourcing MRO supplies management is a growing trend, why is it not more common? Lynch says: “There are still many companies which have large amounts of money tied up in engineering spares inventory. They are dealing with hundreds of suppliers, have a non-standardised approach, and spend an enormous amount of time and effort on non-core business functions. Because that’s the way they operate.” In those situations, outsourcing MRO supply management would evidently be a step in the right direction.

EEFInsight

Do it with your

eyes open

Managing risk in foreign markets

Compared to the post WWII environment, there is now a need to embrace opportunity whilst understanding the security, economic and reputational risks of the markets in which you operate, writes Abigail Gollicker of global intelligence network Stirling Assynt.

Certainty

and simplicity disappeared long ago. Countries tended to be aligned with Washington or Moscow – so economic policy and the trading environment tended to be similarly aligned; and degrees of corruption and misbehaviour could be predicted in the same way. The world is a great deal more complex now and the need to compete and evolve is vital. A growing proportion of manufacturing processes involve a number of foreign countries, many in emerging or unstable markets. There is therefore a need to embrace opportunity whilst understanding the security, economic and reputational risks of the markets in which you operate. Businesses operating overseas have to live by their wits when it comes to understanding risk. Government claims to support them, but it does so in only the most basic fashion. Companies therefore need to turn to private providers for a strategic assessment of threats and opportunities. Global intelligence networks such as Stirling Assynt give advice and guidance, enabling businesses to do difficult things in difficult places that would be impossible without their depth of insight. The over-arching advice is: by all means move into these difficult jurisdictions, but do it with your eyes open. Many of the risks can be predicted and managed by gaining an understanding of the political, terrorist and security issues of a country and contextualising them into a “So What” analysis of the business implications. Companies want good information and analysis prior to investment or entering unfamiliar new markets. There is a need to join the dots and look forward at the potential risks. This supports decisionmaking, reduces exposure to financial and regulatory risk and protects reputation. For example, in recent weeks international media attention has been focused on Egypt, Bahrain and Libya. Disorders in Egypt, Jordan, Bahrain, Saudi Arabia, Kuwait, Iraq and Yemen are likely to continue for the foreseeable future. This has become a highly unstable business environment where companies need all the help they can get to understand the direction in which these situations are heading. At present, however, only those in Libya and Yemen show any prospect of escalating to the point where the respective regimes could be toppled imminently.

Middle Eastern challenges The fallout from the political crisis in Egypt serves as an example of a sudden reshaping of an overseas commercial landscape where many foreign investors will suffer as a result. Most damaging for existing investors will be the repercussions of investigations into business leaders and senior National Democratic Party (NDP) members for corruption and fraud. Dealings with foreign companies will form part of the enquiries. This could lead to a variety of outcomes for foreign investors including the loss of their established relationships and the collapse of joint ventures. Companies with partnerships in Egypt need to protect themselves - now. There is a very specific defensive interest in protection from corporate liability. Egyptian and international law firms are already advising foreign clients on charges pressed against local business partners. However, the success of Middle Eastern nonviolent protest must also be seen as a threat to al-Qaeda since this stood on its head the movement’s argument that jihad is the only path to achieving justice for Muslims. Al-Qaeda will use this period to proselytise, recruit and raise funds. It will likely resist the urge to conduct attacks in major cities since these risk Muslim civilian casualties and it will not want to be seen to undermine the revolutions. One issue on which al-Qaeda may attempt to capitalise is the rise of Sunni-Shia sectarian violence. This has reached an unprecedented level in Bahrain (where al-Qaeda flags have been used openly) and could do so elsewhere. All in all, it is essential for businesses with foreign operations and exports to plan, analyse, understand and respond proactively to protect their interests abroad. With good business intelligence, companies can navigate uncertain markets and rightly position themselves not only with confidence but also competitive advantage.

For more detailed reports on the ongoing events in the Middle East and elsewhere, please contact Abigail Gollicker at Stirling Assynt on: 020 7856 9461 or: abigail.gollicker@stirlingassynt.com

Document management technology is more relevant than you’d think – and even the smallest manufacturers can benefit, says Malcolm Wheatley.

For every manufacturer, there’s a legal obligation to keep invoices and purchase orders for seven years Phil Burgess, Regional Vice-president of Business Consulting, Infor

Sutton Coldfield-based engine manufacturer Cubewano, the management of documents is a big issue, says the company’s general manager Nathan Bailey. Design documents, inspection results, material certification documents, delivery notes – these and other pieces of paper are vital pieces in the jigsaw that makes up this fastgrowing award-winning business. For Cubewano is a world leader in one of the hottest areas of engine design and manufacture: air-cooled engines primarily intended for the ‘Unmanned Air Vehicle’ market – the so-called drones used by the military in hazardous areas of the world. “Customers might come back years after buying an engine asking for the same engine,” says Bailey. “We clearly need to be able to record all the components, and also any potential upgrades to such components. And any component that is upgraded for one engine has potential knock on effects for each further use of that component so the upgrade might not be suitable for every other use of the part, which then necessitates the creation of a brand new part number.” The solution to the problem? It’s an answer that will surprise many: document management

IT in

manufacturing

technology. And in Cubewano’s case, it’s document management technology that is delivered as standard as part of the company’s Exel Computer Systems’ ERP system – a system in large part chosen by Bailey precisely because of its easyto-use approach to document management. “I’ve always been a fan of holding documents electronically,” he says. “It makes document version control very easy, as the master document that is available on the system is always the most current and up to date. All you have to do is make sure that everyone has access to the system.”

Retention and retrieval Think ‘document management’, and it’s generally consumer-facing industries such as financial services that come to mind. Call up a financial services institution about a complaint, for instance, and the representative on the phone will be able to call up every relevant document at the touch of a button – letters, statements, contract notes and so on. Yet talk to those in the know, and growing numbers of manufacturers – as at Cubewano – are taking an interest, too. But what, exactly, is it that is interesting them? Which precise document management capabilities offer a manufacturer the best ROI? And where do the benefits from better document management arise? One thing is immediately clear. ‘Document management’ is a very broad church and embraces a bewildering variety of pain points and solutions. Compliance, for instance, is one such pain point. “For every manufacturer, there’s a legal obligation to keep invoices and purchase orders for seven years,” says Phil Burgess, regional vice-president of business consulting at ERP vendor Infor. “And in some industries – such as defence and healthcare – the range of documents that must be retained is more extensive, and the retention period longer – 25 years, or even more.” And storage in paper form, rather than in (say) PDF format, can be far from ideal, adds Colin Gallick, chief executive of content management and document management specialist Invu. “Storing paper documents takes up space, which is expensive, and prevents that space being used for other purposes,” he says. “And it’s also risky: you can’t back up paper. So if the documents are lost in a fire, they’re gone for good.” One document management solution, then, is the off-site – and safe – storage of those paper documents. Iron Mountain, one such provider, has 85 secure storage facilities across the UK, serving some 9000 customers, including almost 200 of the UK’s manufacturers employing over 2,500 people. Simple storage and retrieval, though, isn’t necessarily what the company is about, says Iron Mountain commercial director John Apthorpe. Increasingly, he says, companies want to be able to access their documents from multiple locations and

in multiple formats – as well as doing so speedily and effectively. As a result, he explains, one service that the company provides is the scanning and electronic digitising of incoming documents, making them available over the Internet on-demand. Arguably, though – and especially for smaller manufacturers – there’s a lot of sense to digitising at source, combining the attractions of lowcost and secure electronic storage with fast and responsive instant access. Indeed, this aspect of document management is fast turning into something of a boom for both

You can’t back up paper: if the documents are lost in a fire, they’re gone for good Colin Gallick, Chief Executive, Invu manufacturers and IT vendors – especially ERP vendors – as they see new opportunities to both cut costs and gain competitive edge through improved performance and responsiveness. Cutting costs, for instance, is very much the focus of solutions aimed at automating the processing of transaction-related documents. By automating very labour intensive processes such as the matching of invoices and purchase orders in order to approve payment, significant savings are possible. Once, that meant physically scanning the documents in question. No longer: modern day solutions increasingly eliminate the paperwork altogether. And nor does this mean EDI or similar simple document exchange technologies. Modern electronic transaction platforms can serve not just as document transmission and repository mechanisms, but also carry out processes such as matching and validation, says Michael O’Brien, marketing manager for one such platform, Celtrino, which numbers Unilever, Imperial Tobacco and Heineken among its customers. “Carried out by people, such processes are errorprone and costly,” he says. “Automate them, and the result is not just lower costs and fewer errors, but greater efficiency and effectiveness across the supply chain.”

Productivity boost Nor is it solely documents exchanged between trading partners that can benefit from document management. Internally, within the four walls of the enterprise, the application of document management technology can also make a significant difference. Bedding manufacturer Northern Feather, for instance, credits a document management

IT in manufacturing

solution from Invu with generating significant productivity improvements. “Our turnover has increased from £10m in 2004 to £20m in 2010, but we can manage twice as many transactions with the same number of staff,” says financial controller Brian Wilcox. “Being able to automate the sales order process had a real impact on the business.”

What started out as a technology mostly used for invoice processing has turned out to be a tool for improved productivity right across the business Tim Wilderspin, Business Development Executive, Readsoft

“With orders now directly scanned into Invu, we can generate the picking note and attach them using the document number – and when picking notes come back from the warehouse, they too are scanned and attached. Document management has helped us to define and enforce our processes, while also removing human error.” Indeed, the broader thrust of document management within manufacturing is increasingly moving to the model pioneered by companies in the financial services industry: capturing and retaining documents at all stages of the order-tocash cycle, recallable from a central database at the click of a mouse. “It’s a big growth area, and we’re getting a lot of customer traction,” says Jonathan Orme, sales operations manager at ERP vendor Exel Computer Systems. “Businesses have had ERP systems in place for ten or fifteen years, and recognize that these days they need to seek competitive advantage through other means – and they’re turning to document management and improved workflow to streamline the business and improve efficiency.” As documents are generated, explains Orme, they are automatically digitised into PDF form and are linked to the appropriate database record – such as a sales order or purchase order. What’s more, there’s nothing to prevent incoming external documents can be scanned and linked in the same manner. The goal: a central repository of every document relevant to a given order – readily accessible, and available on-demand. Indeed, adds Tim Wilderspin, a business development executive at Readsoft, an early document management pioneer, there’s a growing impetus to extend the same approach to many other forms of documents within the business: quality documents, plant maintenance documents and human resource documents.

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“What started out as a technology mostly used for invoice processing has turned out to be a tool for improved productivity right across the business,” he notes.

Better enforcement And not just improved productivity. Document management technology can also help improve compliance when applied to some of these other aspects of business data, points out Ian Keers, managing director of document management company Cave Tab. Under the Data Protection Act, human resource records should be kept for a maximum of ten years, he says – yet many companies lack the will and capability to regularly ‘prune’ old archived data, discarding documents which should no longer be retained. “As a result, they keep everything, for ever – which is both costly and not in compliance with the law,” he says. “A document management system forces the correct retention policy.” Compliance with customer wishes is also an important plus, adds Ben Richmond, chief executive of document and content management firm The Content Group, which specialises in linking document management solutions to clients’ ERP systems. Willerby, North Yorkshire-based £100 million holiday home manufacturer Willerby Holiday Homes, for instance, uses The Content Group’s document management solution to enforce internal compliance with individual customer design requests.

Compliance with customer wishes is also an important plus Ben Richmond, Chief Executive, The Content Group

“Our business is very much design-orientated, and new bespoke models have to be designed and manufactured at a fast rate,” says Howard Dawson, integrated systems manager at Willerby. “Turning around designs quickly generates a lot of paper based transactions such as drawings, design process documentation, and specifications – all of which need to be captured for our customer services department, which manages the post installation phase of our homes. The amount of paper involved in these processes is now greatly reduced.” And thanks to document management, not a problem. Manufacturing may not have been the first to see the potential of the technology, but it’s undeniably catching up fast.

TheBudget Reaction

Industrial

reaction The 2011 Budget ticked many boxes for business. But nothing is perfect and there were a few notable inclusions that left the Budget someway shy of an ‘A’ grade. Business minister Mark Prisk MP talks to Will Stirling about capital allowances, Enterprise Zones and the carbon floor price. Carbon Floor Price to rise to £30 per tonne One of the biggest concerns for the manufacturing industry from the latest entries to the Red Book was the carbon floor price, a tax on carbon emissions. Set at £16 per tonne of carbon produced when introduced in 2012, it will rise to £30 per tonne from 2020. The UK is the first European country to set a tariff and the latter price could be almost double what companies in other countries – those that will use the EU ETS system – will pay. Mr Prisk stood by the carbon floor price, saying that its introduction must be considered in conjunction with an increased discount in the climate change levy from 65% to 80% and the reduction in corporation tax to an eventual 23p. However, he conceded that “this doesn’t wholly deal with the problem” and said a joint strategy team between the Department of Business, Innovation and Skills, the Department for Energy and Climate Change and the

Business Minister responds to post-Budget reaction

Burning wood pellets for energy will save Rio Tinto Alcan cash, as Mark Prisk MP found on a recent visit, but the carbon floor price could still cost the plant 600 jobs.

Treasury will now work with manufacturers and other businesses to help them find strategies to reduce their energy spend. This would include assessing the viability of adopting new forms of energy generation. The minister visited Rio Tinto Alcan in Northumberland after the Budget statement. The company is assessing the burning of wood pellets to generate some if its energy needs. Compared with coal, he said this biomass material is cheaper, better for the environment and carries less secondary tasks like cleaning transportation. It also offers no loss in the ability to control the energy source. Local North East paper The Chronicle reported straight after the Budget that the carbon floor price could cost 600 jobs at the Lynemouth plant, and such is the effect of the carbon-cutting measures that John McCabe, corporate affairs director at Rio Tinto Alcan, told the paper: “If we do nothing it would be very difficult to see how there could be a long-term future for the plant.” Bosses have said they fear the new tax could cost the plant an extra £40m a year, wiping out profits. Mr Prisk said: “We are very mindful of the need to handle this [the carbon floor price] carefully. We need to have a carbon floor price, so the energy sector is able to develop its investment plans over the next few years. That’s a clear signal, but energy-intensive industry will have specific needs and issues. That’s why we are mitigating their costs in part by changing the way in which the climate change levy operates. It’s also why we are working with the [manufacturing]

The Budget reaction with Mark Prisk MP

sector to ensure we have a strategy to work with them to help them mitigate their costs, both in the short and the longer term.” Asked for an example, Mr Prisk said: “We’ve seen where Tata UK has been able to change its energy arrangements so that, for example, by making short term investments they have been able to cut the amount of electricity they draw down from the grid by half. By becoming more energy efficient, they are also able to deal with the broader issue of carbonisation.” Discontent about the carbon floor price came from, among others, Tata Steel itself which also warned that jobs could be lost as a result of the introduction of the measure. According to Karl-Ulrich Köhler, head of Tata Steel’s European operations, steel production in the UK will become less competitive as new emissions costs are imposed.

Capital allowances – short life asset gain, but gulf in real economic life remains Mark Prisk recognised that despite the rise in the short life asset capital allowance regime from four to eight years, there is still a disparity with other countries in the period that it takes to write off against tax equipment which falls outside of this bracket. He said the government has sought to balance the short term issue within its overall aim of simplifying the whole corporate tax system. He maintained that the government will have exceeded many people’s expectations here. “Most

Storage of extrusion ingots, photo courtesy of Rio Tinto Alcan, an energy intensive manufacturer

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manufacturers will by 2014 still find themselves enjoying [tax] relief,” he said. “Many were concerned that our changes would remove that.” “The Government has engaged in simplifying corporate taxes, which leads to more money in the coffers of businesses to reinvest. But we have recognised, having listened to manufacturers, that there is an issue around asset development and investment. That’s why we have extended the capital allowance regime,” he said. “The combination of cutting the corporation tax rates to 23 pence and ensuring the capital allowance regime is more competitive should help businesses be able to compete well in the future.”

Enterprise Zones – unfair advantage? The minister was enthusiastic about the 21 new Enterprise Zones nationwide – areas where companies will benefit from reduced business rates and a simpler planning rules. This is an increase on the 10 originally proposed. Having worked on the original Enterprise Zone scheme as a surveyor in the 1980s, Mr Prisk said he has seen firsthand the benefits they bring, and is confident they will give economically depressed areas a chance to catch up. On March 24, the Government announced the first four Enterprise Zones: the Boots campus in Nottingham, Liverpool Waters, Manchester Airport, and London’s Royal Docks. Felicity Burch, an economist at manufacturers’ organisation EEF, says in her blog: “Experience from the 1980s shows that lower tax levels and a simplified planning regime did boost employment and inward investment within some Enterprise Zones. The new zones should expect a similar uplift. However experience also suggests that the benefits from Enterprise Zone designation do not always last for very long, and there are high deadweight costs associated with activity simply moving from one area into an Enterprise Zone.” She added that different regimes in different areas could lead to those “very distortions in the business environment that the government has said it seeks to address”. In his interview with TM, Prisk responded: “Enterprise Zones have a real opportunity, particularly in those areas that were left behind, enabling them to compete. I was on the Tees Valley [Newcastle] recently, and they were very excited about the prospect of repeating the earlier success they’ve had there with the last enterprise zone, which has had lasting benefits for the whole area. The way in which we deal with removing the complications of the planning system and making things like business rates lower, and in particular the opportunity to retain the revenue locally, allows the regeneration of the local area. We have looked at where the past Enterprise Zones needed to be refined and now we’re working with the local enterprise partnerships, the LEPs, to deliver them across England.” For more Budget reaction from manufacturers, ministers and trade organisations, turn to page 48

IT in

manufacturing

ITnews.. DIGITAL PROTOTYPING

Autodesk launches 2012 manufacturing software portfolio Autodesk has unveiled its new 3D design and engineering software portfolio for manufacturers, including updated product and factory design suites. The Product Design Suite contains Autodesk’s leading design, visualisation and simulation software for manufacturers, providing flexibility to innovate and more easily respond to changing business requirements—and what’s more, offering Digital Prototyping capabilities bundled in a convenient, cost effective package. Meanwhile, launched in 2010 and updated this year, the Factory Design Suite 2012 is a factory layout and optimisation solution that helps companies make better layout decisions through the creation of a digital factory model—and helping to save time and money by identifying bottlenecks and calculating the cost of interplant movement. Stephen Hooper, European head of business development for manufacturing at Autodesk, said: “What we are offering is digital prototyping in a box, helping customers being more innovative and competitive, and produce more sustainable designs. We also help them react to an increasingly complex business environment and supply network.” As a result of a partnership with Granta Design, the company also introduced, within Inventor 2012, the Eco Materials Adviser, which helps designers estimate a product’s environmental impact and make more sustainable design decisions. Inventor Fusion, included as a companion application to many Autodesk products, also made its début at the launch event in Farnborough, and offers 3D modelling

ease of use and direct modelling for rapid design changes. Also noteworthy are updates or new introductions of specialist design capabilities. Autodesk Moldflow 2012, for instance, introduces real time injection moulding simulation functionality, enabling dynamic evaluation of a range of plastic part design alternatives in a fraction of the time it takes to perform a standard simulation, helping to pinpoint the best design more quickly.

ERP

Sage ERP X3 gains traction In the last twelve months, 300 new customers have adopted Sage ERP X3, reports the company, taking the total number of customers globally to more than 3,000. Sage ERP X3 is now available in 53 countries, and has as more than 165,000 users worldwide, it adds.

Claimed as the first truly global ERP solution for the upper midmarket, Sage ERP X3 is available from a range of resellers that includes Acuity, Datel, DMC Ensphere, Inixion, Mysoft and Pinnacle Computer Solutions. “Sage ERP X3 is proving to be a huge coup for enterprises looking to accelerate growth, streamline their operations

across borders and enhance productivity,” says Greg Ford, managing director of Sage’s Mid Market Division. “As many of our UK customers increasingly expand their international footprint, Sage and our dedicated business partners have the understanding and expertise to help them avoid making costly, cumbersome and complex investments.”

IT in

manufacturing

ITnews.. CAD/CAM

Autodesk Inventor 2012 certification for Planit applications Two separate Planit Software applications have recently gained Autodesk Inventor 2012 certification. Edgecam Solid Machinist is certified for Autodesk Inventor 2012 in its R2 release, while Radan 2011 has gained full certification in its respective R2 release.

Each claims a loyal corps of customers, many of whom can be expected to benefit from the news of Autodesk certification. Certified applications have to meet predetermined implementation guidelines and must demonstrate the highest levels of robustness, quality and inter-operability when working with Autodesk Inventor software. Edgecam is a seamlessly-integrated CAM system for generating machining strategies and NC code, with an associative link between Edgecam Solid Machinist and Autodesk Inventor. It offers a comprehensive suite of intelligent manufacturing solutions for milling, turning, mill/turn and advanced free form machining. Meanwhile, and encompassing design, manufacture and production control for all sheet metal components and products, Radan extends the digital prototyping philosophy into manufacturing, enabling users to see how their prototypes will be machined, and allows early identification of any potential manufacturing problems before they happen on the shopfloor. In a neat twist, Edgecam turns out to be again sponsoring an exhibition team which highlights the ongoing restoration of the paddle steamer Medway Queen in Bristol’s floating harbour. The ship played a leading role in rescuing British and French soldiers from the beaches of wartime Dunkirk, the rebuild is taking place under Heritage Lottery Fund supervision to the original 1924 drawings. The Medway Queen will be the first riveted ship to be built in a British yard for over 50 years.

SIMULATION

Nissan optimises plant layout for electric car battery production From 2013, Nissan in Sunderland is expected to manufacture 50,000 of its eco-friendly electric LEAF cars per year. And currently under construction is a related battery manufacture plant will produce 60,000 lithium ion batteries for the cars, going into production in January 2012. But before building the UK plant, Nissan’s team of engineers in Sunderland had to demonstrate that the throughput volumes achieved in Japan could be delivered. The task was far from straightforward, as battery production calls for the manufacture of just under 12 million cells to create modules required for each of the 60,000 battery packs, the linking and charging of anodes, cathodes and electrolytes to form the battery’s structure, and then final battery pack assembly. The solution? Lanner’s WITNESS simulation software, which had been used by the company on previous ‘new launch’ projects. Simulating various alternatives, WITNESS quickly identified and optimised a plant layout that would achieve the target 60,000 battery throughput—as well as showing that it would produce them more cheaply than the pilot plant in Japan. “Having this model means that the team could not only provide a watertight assurance that our Sunderland plant could cope with the volumes, but that it could do so at a substantially reduced cost base - one which was far lower than we’d hoped,” comments Bob Scurr, lead engineer at Nissan Motor Manufacturing (UK) Ltd.

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Profitable. Secure. Paperless.

Celtrino

Eliminate the pain of accounts payable processing Take lean into the back office with online transaction processing automation, urges Celtrino’s John Behan.

most manufacturers recognize all too well, their accounts payable and accounts receivable processes are significantly labour-intensive, incurring them significant levels of cost, delays and errors. The good news? Eliminating those costs, delays and errors has never been easier. And better still, it can be done in a way that many of them will recognize all too well from their lean manufacturing endeavours namely, by tackling them one pain point at a time. The proposition isn’t a difficult one to understand, especially for manufacturers in the smallto medium-sized range. From error-prone and time-consuming data entry to invoice matching, and from responding to supplier queries to chasing outstanding payments, the inescapable fact is that expensive human involvement is necessary at every step of the way. Automation, of course, is the answer. Look at many of Britain’s largest businesses, and it’s not difficult to spot instances where complex manual and paper processes have been swept away wholesale, leaving slick paperless processes in their wake.

The problem? Traditional approaches to accounts automation are expensive, and require a significant investment in scanning and optical character recognition technology and associated software. In short, unless volumes are high, it’s difficult to make such investments pay for themselves. But there’s a better way, points out John Behan, sales director of Dublin-based Celtrino, which numbers companies such as Unilever, Coca-Cola HBC, Imperial Tobacco, Mars and Heineken among its 600 or so customers. And key to that better way, he says, is understanding that paperhandling must be eliminated, not just automated or digitised. “E-mailing an invoice for someone to then type into an accounts screen isn’t the point,” he says. “Nor is printing it out and then scanning it electronically. These are ‘half way’ solutions that still require human interaction, and still result in errors and delays. It’s better by far to move completely away from paper.” In other words, to move to exchanging transaction-related documents electronically, via a

secure online platform: purchase orders, invoices, shipping notes, goods inwards received notes, statements and everything else. And on a platform—unlike mere EDI—where business rules can be applied, checking transaction documents for such things as order quantity compliance, pricing, volume discounts and completeness. What’s more, the savings can be substantial, adds Behan, pointing to achieved reductions in invoice-processing costs of 50-80%. More importantly, he emphasises, by moving online, manufacturers are improving their entire supply chain effectiveness. “They’re speeding-up the flow of transaction documentation and associated physical goods— while simultaneously reducing costs, eliminating errors and discrepancies, and making better use of expensive human resources. In short, it’s a win-winwin proposition.” All of which, of course, maps very readily onto the tenets of lean manufacturing. And, what’s more, takes lean from the factory floor into the office environment. But the link to lean is even stronger, stresses Behan. And that’s because the move online need not be a ‘big bang’, all-ornothing solution, he says. And indeed, for a significant number of Celtrino customers, it isn’t. “Identify the invoice-processing pain point, resolve it, bank the benefits and move on to the next pain point. What could be leaner than that?” he asks.

For more information please visit: www.celtrino.ie

IT in manufacturing

Simulation saves Nissan

Eu10 million Production

of the new vehicle is so far being undertaken in Japan, but from 2013, Nissan Motor Manufacturing (UK) in Sunderland is expected to manufacture 50,000 LEAF cars per annum. Due to be completed in January 2012, the company is constructing a battery plant which will produce 60,000 lithium-ion batteries. Because the LEAF represented relatively unchartered territory for Nissan, Nissan’s Sunderland-based engineers had to demonstrate that the plant could deliver the required throughput volumes. The project team had to plot operational efficiency and scrap rates against the three key stages of battery production. These included the manufacture of just under 12 million cells to create modules for each of the 60,000 battery packs; the linking and charging of anodes, cathodes and electrolytes; and battery pack assembly. Having observed battery production at the pilot plant in Japan, the project team felt confident that they could build a new plant in Sunderland to cope with the 60,000 unit throughput demand, against a lower cost base. Building design and plant layout was integral to optimising production and supporting profitability of the LEAF, and the team set about creating a business case to demonstrate that the facility could manufacture the expected volumes, at greater levels of efficiency. However, they needed to be able to prove beyond doubt that these investment cost savings would be possible, and concluded that the level of complexity involved was impossible to harness without sophisticated modelling software.

Establishing a UK manufacturing hub for Nissan’s first mass produced electric car, the LEAF, required sophisticated modelling to prove a sound and profitable business case.

throughput could be achieved with an investment cost saving of Eu 2.5m for the Sunderland plant alone, when compared with the pilot plant. It also highlighted that if the optimised layout was extended to the additional three battery plants planned for Portugal, France and the US, it would increase savings to over Eu 10m. “Having this model means that the team could not only provide a watertight assurance that our Sunderland plant could cope with the volumes, but that it could do so at a substantially reduced cost base – one which was far greater than we’d hoped,” says Bob Scurr, lead engineer at Nissan Motor Manufacturing (UK). “Simulation was the only way to provide a scientific risk free business case which would optimise the layout and identify the most efficient and productive layout for battery production.” The additional battery plants in France, Portugal and Tennessee in the US will be built against a phased schedule over the next two years, with support from Lanner’s WITNESS model. According to Scurr, Lanner’s WITNESS solution has been integral to optimising battery production for the LEAF and its derivatives. “Without it,” he says, “changes and modifications to the production process would have had to have been tested in the real world, which is prohibitively risky and costly. From our investment in WITNESS software we have seen an ROI of over Eu 10 million and have absolute confidence that our production is as lean and efficient as it can be.”

Proving the business case Nissan had used Lanner’s WITNESS simulation software in previous projects, and as it was proven, robust and cost effective, Nissan chose WITNESS to construct the complex battery production model. The WITNESS model processed a number of scenarios, and demonstrated the optimum plant layout to achieve the 60,000 throughput. Exceeding expectations, the model also showed that through using this layout, the

Screenshots of Lanner’s WITNESS simulation software

ENERGY sUPPLEMENT Average industrial fuel prices – combining fuel oil, gas and electricity – have increased by 70% since 2005, according to the Department for Energy & Climate Change. With the introduction in the 2011 Budget of yet another environmental tax, the carbon floor price, it is now a cliché to say that energy is has become a business critical issue. What are manufacturers doing to mitigate the rising costs? More customers are selecting manufacturers partly on their energy efficiency credentials. Employing energy managers to find ways to reduce energy consumption and understanding how feedin tariffs for using on-site renewables can also lower electricity bills. This supplement covers these subjects and more.

ENERGY SUPPLEMENT

Reducing your footprint and your energy bill Being green need not lead to increased costs, especially when it comes to reducing an organisation’s carbon footprint, argues Alan Aldridge, Executive Director of the Energy Services and Technology Association (ESTA).

or some organisations, the concept of ‘being

energy use in buildings. And attention to this aspect

green’ still seems to carry with it the fear

of building use can help to bolster and enhance

of expenditure on items which have no

environmental management within an organisation,

economic return. It is a ‘nice to have’ but

as well as saving money.

not part of the daily business of returning a profit. While there are ample studies to show that this is

energy, are pared down to the essentials. Any

not the case, the perception remains. However, with

wastage impacts on profitability and competitiveness.

increasing regulatory and stakeholder pressure to

That philosophy should apply to the whole of the

improve environmental performance, it is surely time

business, not just the production side. Excessive

to revisit this topic and examine the assumptions

consumption impacts on the bottom line. No

behind it.

business can afford that in these economic times.

In terms of process costs, energy is already

There are other benefits too. Customers and the

factored in as an important raw material. Likewise,

general public are increasingly demanding that

waste is subject to stringent disposal regimes within

suppliers and producers prove their environmental

manufacturing sectors. Yet a great deal of energy

credentials. A large number of major businesses and

is used outside these processes – for heating and

public sector organisations include environmental

lighting buildings, as well as providing power for

performance in their criteria for selecting suppliers.

office and ancillary equipment. While this may

Supply chain pressures are not going to diminish,

represent only a fraction of the costs of energy for

far from it. So a robust environmental management

manufacturing, it is still a controllable overhead.

programme is becoming a differentiator between

Moreover, it features in many supply chain and

competitors and a key to unlocking more business.

reputational issues. Energy consumption is the single largest

In manufacturing, raw material costs, including

Energy efficiency is the simplest and most immediate way to begin (and continue) a

contributor to non-process carbon emissions. In fact,

documented programme of environmental

about 30% of the UK’s carbon emissions come from

management. And it will save money too!

carbon footprint

what size is yours? Do you know the carbon footprint of your manufacturing operation? Apollo Enviro can help you calculate and reduce your footprint

Why do you need to know your carbon footprint? The recent revision of the CRC Energy Efficiency Scheme has placed a ‘green tax’ on many UK businesses – understanding your carbon footprint can help reduce the costs of this tax Good environmental practice is fast becoming a requirement for successful and sustainable business

How can we help you reduce your carbon footprint? Our Carbon Footprint Audit service will identify areas for improvement and make cost-effective recommendations for saving carbon and money Other services we offer include working towards ISO 14001 and/or BS 16001 with your organisation to certify and monitor your savings for the future If appropriate we can supply and project manage the installation process for your new investments, including voltage optimisation technology: • Electricity savings for lighting of up to 35% • Total electricity savings of up to 18% • Typical payback around 2 years Our sister company Apollo Energy offers a turnkey service for utility management, including procurement of green energy or energy from renewable sources; further reducing your carbon footprint

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ENERGY SUPPLEMENT Tata Steel employee moving steel at the Stocksbridge Remelting facility

Practical steps to reducing the carbon footprint

roduct sale-price and company profitability

Heavy industry already has to cope with paying for

depend upon minimising input costs, while

emissions allowances and now other large users

maintaining quality and maximising profit.

will have to pay £12 for every tonne of carbon

The ancillaries, such as building operating

emitted under the CRC Energy Efficiency Scheme.

costs, administration, sales and marketing, etc,

Under the Electricity Markets Review currently being

tend to be viewed as overheads which have to be

undertaken by the Government, a ‘floor price’ for

accepted and factored in.

carbon will be introduced. This will mean that a

Yet there is no reason why this should be the

minimum price for carbon emissions can be set. The

case. All operating costs and all purchases should

reason is to make investment in low carbon energy

be scrutinised – and all resources should be used

supply more commercially viable: for consumers it

as efficiently as possible. Without that, a business

can only mean higher bills.

will haemorrhage money. In the case of energy,

So reducing fossil-fuel based energy consumption

several factors combine to increase the overall cost

(including grid-supplied electricity) is key to

to business.

reducing costs and to reducing emissions. There

First, there is the volatility from geo-political

Energy consumption in buildings tends to get less attention than production inputs because it involves less money overall, says Alan Aldridge of the Energy Services and Technology Association.

are two ways of doing this: reducing demand or

instability. While this may be temporary, the number

switching to low carbon energy. Much has been

of incidents over recent years has meant that energy

made of on-site renewables but the current review

prices have been very variable. Second, demand is

of Feed-In-Tariffs (FITs) shows that Government

rising across the world. The International Energy

policy on this issue is still in flux. The basis of

Agency forecasts that demand will increase by 40%

FITs is to provide a return of around 8% per year.

by 2030 and that must increase prices. Third, the

Many energy efficiency projects will deliver a

government has stiff carbon reduction targets to

much higher return than this, so reducing demand

meet under both UK legislation and international

through effective energy management is a clear

agreements, so will be looking to persuade consumers

priority and has a proven record. Reducing demand

of all sizes to cut consumption of fossil fuels.

automatically cuts emissions, regardless of

ENERGY SUPPLEMENT

Figure 1: Performance drift

energy source, and lowers exposure to carbon

Lord Kelvin, but it still holds true today. However,

allowance costs.

the tedious collection and manual inputting of

Now, while some of the newer industries boast

meter data has long passed. Automatic Monitoring

brand-new state-of-the-art construction, many more

& Targeting (aM&T) systems are now well-

traditional sectors have, typically, buildings that

established and the reports they generate can be fed

are several decades old. The energy performance

into standard administration, estates and financial

standards of structures even 15 years old will be

packages used by business. Their effectiveness is

much poorer than that of one built today.

recognised by the Government as their installation

The likelihood is that there will be significant opportunities to make savings on energy through simple improvements. These will not

qualifies for an allowance against carbon targets in the Building Regulations. With the use of aM&T, areas where energy is

just be increasing insulation levels and draught-

being wasted can be quickly highlighted – and

proofing doors and windows, important though

addressed. If the building is using electricity at

these are. Too many people forget that low-energy

the weekend when there is no production or

lighting that is switched on unnecessarily is still

maintenance going on, then there is potentially a

wasting energy. Energy consumption must be

problem with the control system. Issues such as

controlled and managed if costs and emissions are

jammed switches on heaters, lighting always on in

to be minimised.

storage cupboards (out of anyone’s sight) show up

Automatic Monitoring and Targeting

quite quickly. Using Degree Day monitoring, it can be seen when a building is using too much energy compared

The framework for effective energy management

to historical performance – or compared to other

is the technique of Monitoring & Targeting. The

buildings of this type. This can also be used to

maxim “You can’t manage what you can’t measure”

capture the effect of ‘performance drift’ over time

is commonly attributed to the 19th century scientist

(see Figure 1).

ENERGY SUPPLEMENT

Figure 2: aM&T systems can be used to target wastage and optimise consumption

both can operate simultaneously, working against each other and pushing up the bills. The Building Regulations now require zoning controls, so that areas near windows, say, where there is significant solar gain during summer (and heat loss during winter) have different control strategies from areas in the core of the building where environmental conditions are more constant. Variable speed drives (VSDs or inverters) are commonly used on production machinery to optimise partload working, and they are available for air conditioning systems and pumped

Some of the simplest measures to tackle excessive

water systems as well which often have to operate at

energy use (and carbon emissions) involve checking

variable loads.

set-points and time switches. If the latter do not automatically switch over in spring and autumn

Lighting controls

for example, the heating will come on too soon or

As an example of the opportunities from individual

switch off too late.

technologies, take one area where ESTA has found

Air conditioning and heating system setpoints need to be checked regularly. If these overlap, then

there are substantial opportunities for energy savings, that of lighting. First of course antiquated

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ENERGY SUPPLEMENT

conventional tungsten filament lighting

Figure 3: VSDs can reduce energy

should be replaced with low energy

consumption on air conditioning systems

alternatives. But there are now low-energy

working at part-load

options for fluorescent lighting too. In areas where desk working requires good lighting level for detailed work, individual task lamps may be appropriate with control left to the individual, with lower general lighting levels for walkways and communal areas. As mentioned earlier, though, lowenergy lighting on its own will not deliver the best results. There needs to be a control strategy or management system. So all the lighting should have a default switch off after everyone has gone home (although individual lamps can have a manual override if people are working late). Daylight sensors which make use of natural lighting conditions can cut artificial lighting. Areas which are only periodically used like storage areas, conference rooms and washrooms can be fitted with occupancy sensors to automatically switch lights on and off. The latest edition of the Part L Building Regulations is based on the model of having presence detection and daylight dimming in virtually all areas above 30m2. There are always opportunities for improving energy efficiency. Even where programmes have been implemented

Green With Envy...

in the past, energy management is always developing and new, more costeffective solutions are continually being developed. The integration of aM&T with financial software packages should make it easier to identify and quantify the potential savings in a manner that can be used to convince senior management of the benefits. Alan Aldridge is Executive Director of The Energy Services and Technology Association.

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ESTA represents over 100 major providers of energy management equipment and services across the UK. For more details visit the website at: www.esta.org.uk

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The quest for efficiency Why energy suppliers are key Times are changing in the energy world. Manufacturing companies are under more and more pressure to not only reduce their consumption to comply with carbon reduction targets but also ensure that the energy they do use is environmentally responsible.

by focusing on supplying purely to businesses, with a focus on customer service. The results of the 2010 Datamonitor customer satisfaction survey* (power) demonstrate the increases in service levels, and Haven Power came first for the second half of the year (H2). From

utting energy usage

a company of energy experts, we are

procurement through to billing and

and carbon output

well placed to offer manufacturers

account management, we scored

has therefore become

advice on how they can be more cost

consistently highly, highlighting the

integral to many

and environmentally effective with

growing importance of customer-

their electricity supply.

focused suppliers.

companies’ business strategies, but investing in more efficient

As companies have become

Going the extra mile for

machinery is only going to do so

more discerning when choosing

customers and getting it right first

much. Having an energy supplier

their energy provider, suppliers

time, every time, is our ethos. We

who understands your business and

have had no choice but to address

don’t believe in call-centres and take

can provide the right contract is vital

the customer service part of their

time to understand a customer’s

in effective energy management.

offering. Getting value for money

business, allowing us to advise on

is high on the agenda for many

the best contract – whether having

businesses, especially with power

budget certainty, greater choice and

prices rising.

control or a tailored solution is the

Competition creates better service Since its inception, business

The good news is that businesses

specific requirement.

electricity supply company Haven

have more choice than ever when

Power has maintained its core values:

it comes to energy suppliers, with

to provide good quality service at a

medium-sized providers – such as

Helping to meet sustainability goals

competitive price to its customers. As

ourselves – breaking the mould

Environmentally responsible manufacturing has become a key target for the Government, so industrial businesses have had to try and reduce their carbon footprint by any means possible. As a result, manufacturers need power suppliers that can support and advise them on reducing their energy costs and improve monitoring. As Drax Power’s supply arm – which last year produced twice as much renewable power than any other facility in the UK – we are able to offer customers power from a renewable source. This power, generated from biomass, means that companies looking to be more

SMEs and I&Cs will always benefit

and communicate with customers

achieve this without compromising

from our competitive prices and

in the way they prefer, adapting

their budget as has historically been

expert advice. Our customer focused

to current trends to create

the case.

culture, ongoing investment in

collaborative opportunities with

people and systems also means

customers rather than taking a

seven percent of the UK’s electricity

that you will find our service

traditional one-sided approach.

needs and is investing heavily in its

fast, responsive and accurate.

biomass facilities. This means we can

What’s more, it allows us to keep

on the increase, service demands

offer customers significant industry

customers regularly updated on the

increasing and typical customer

expertise and supply benefits from a

performance of their contract and

service levels well below where

substantial base.

the marketplace as a whole, building

they should be, retention of

our customer relationships right

customers will become more and

the environmental impact of their

through from contract to servicing

more difficult to manage. It will

business, major energy users want

and renewal.

be the suppliers with good-quality

Drax Power produces around

As well as helping to reduce

a supplier who can offer them

We know that with energy prices

customer relationships embedded

dedicated customer support. At

Changing with the times

Haven, we pride ourselves on being

We understand that manufacturing

needs of all sizes of businesses,

a company of energy experts with

companies often have very different

who will see a return in

a can-do culture. Our range of

energy requirements to other

customer loyalty.

supply options has been developed

businesses. In an energy-intensive

to suit the buying preference and

business the shape of the usage and

become increasingly complex, and

risk-management strategy of clients,

whether demand can be moved is

manufacturers need to question

which means we can tailor contracts

key to the right product and price

whether they are getting the

to meet specific demands.

structure. A reliable supplier who

service and expertise they deserve

understands the consumption

from their energy supplier. At

pattern of manufacturers is crucial

Haven, we continue to review

to ensure efficient supply at the

and improve our operations and

contracting stage and ongoing

systems to keep the customer’s

through the contract term.

needs at the heart of what we do to

a straightforward approach and

Contracts to suit your business – however demanding Larger companies can choose from our Fixed or Flexible contracts, but also have the opportunity to have a

We constantly update our procedures to streamline operations

H aven P ower

environmentally responsible can

in their culture, together with a flexible approach to managing the

Energy requirements have

ensure productivity and efficiency are maximised.

product tailored to their individual needs. Our Fixed contract is designed for customers looking to fix their

To find out why Haven is the supplier for you, call 01473 277572, email enquiries@havenpower.com or visit www.havenpower.com

electricity prices over an agreed period to remove exposure to price volatility and obtain budget certainty. For manufacturing companies, being able to control your energy budget over a period of up to five years is potentially of huge benefit. But for those customers looking to manage their costs more dynamically, the Flexible contract

Did you know? Businesses in the UK waste 10 percent to 20 percent of the energy that they buy due to poor control of heating, air conditioning and ventilation through leaving lights and appliances on when not in use. Over 200 I&C customers are now contracted with Haven. Along with manufacturing customers, companies in the retail, finance and education sectors are enjoying the benefits of Haven’s expertise. Biomass is a form of stored solar energy. It is organic, plant-based

may be more suitable. This product

material and has been used as an energy source for many years to

puts the customer in the driving seat,

produce heat. Biomass is plentiful and sustainable – it is the world’s

allowing them to control the extent

fourth largest energy resource.

and timing of their forward exposure as well as the wholesale electricity

*Based on interviews with 2,000 major energy-using businesses, defined

price they are willing to accept.

by Datamonitor as spending over £50,000 a year on energy. For more

Whether customers choose the

information visit www.datamonitor.com

Fixed, Flexible or tailored option,

ENERGY SUPPLEMENT

The role of the Energy Manager The cost of energy, and energy efficiency, have both climbed higher and higher up the priority lists of both boardrooms and government. In parallel, a growing number of conscientious individuals have continued to work quietly in the background, maximising energy efficiency measures to reduce energy consumption, motivated by both the need to reduce CO2 emissions and to make financial savings.

n an era of wide-screen plasma televisions and

Effective energy management is increasingly

regular international travel, we are living in

becoming a priority and particularly within the

an increasingly energy-intensive society. Fossil

manufacturing sector where energy levels can

fuels (coal, petroleum, gas) still account for the

be high due to heating, lighting, and all of the

majority of the UK’s energy consumption and are a

equipment involved. With management becoming

major contribution to the increase of carbon dioxide (CO2) emissions. This increase has been identified as

more accountable for increasing costs, the emphasis

a significant factor towards climate change, resulting

how to maximise efficiency, reduce carbon

in the need for a global reduction in emissions. As

emissions, and involve staff in helping to cut energy

the world begins to acknowledge this, it has resulted

costs is becoming paramount.

in a U-turn in focus from fossil fuelled power

on monitoring energy consumption and identifying

generation to low carbon technologies to combat

Power hungry management

climate change on a scale the likes of which has

In the past there have been few formal

never been seen before.

procedures to encourage energy management and

Energy efficiency has always offered a win-

efficiency. In the first instance, many organisations

win solution. It is increasingly seen as the most

do not fully understand the task to hand or have

important action in terms of what can be realistically

the resources available to monitor and adapt

achieved in the timescale required to reduce carbon

energy behaviour. It is still rare for an organisation

emissions. It is the biggest way in which both

to have a dedicated full-time energy manager

individuals and organisations can play an active role

– often the role is taken by facilities, estates or

in tackling the energy challenges that lie ahead, and

environmental managers who have many other

that can also make a difference today. While it takes

competing demands.

time to build new nuclear power stations and fully

It is still rare for an organisation to have a dedicated full-time energy manager – often the role is taken by facilities, estates or environmental managers

Buildings account for approximately 40%

demonstrate and test carbon capture and storage

of the UK’s carbon emissions, and so those

technology, effective energy management practices can have an immediate effect both on CO2 emissions

responsible for energy management play a vital

and the bottom line.

and sustainably. From monitoring energy bills to

role in making buildings work more effectively

Don’t rely on

LUCK, trust our JUDGEMENT

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ENERGY SUPPLEMENT

T ips for saving energy in the workplace Establish clear procedures and ownership for all equipment to make sure that it is switched off, or at least turned down, when not in use. Assess whether the lighting is fit for purpose, can you use natural daylight or higher efficiency products? How is your workspace heated/cooled? Is it competing with open doors and windows? Carry out a daily/weekly assessment site tour identifying energy wasteful practices. Understand where and when the energy is being used. Maintain equipment at regular intervals to ensure peak efficiency.

and investigation as to exactly where energy is being consumed; draw up a list of opportunities for making savings; and incorporate them into energy policies. While these standards may not be mandatory, they provide a formal structure to energy management, outlining good practice to developing effective energy efficiency measures, thus saving you money.

Chartered status for Energy Managers In recognition of the important role energy management plays and with a desire to raise standards, the Energy Institute (EI) has introduced the title ‘Chartered Energy Manager’. Achieving a chartered title is a commitment to a professional code of conduct and career-long professional status. And, in turn, it is hoped that this new title will raise the profile and valuable contribution of those working in energy management. Never before has the role of energy management been

spearheading capital projects, they are often central

more significant and the EI is committed to

to championing a culture shift in the workplace to

providing the professionals with the right tools and

lead new directions and encourage colleagues to

support they need.

consider how they can improve their own energy

Aimed at technical staff with a responsibility for

use. However, despite those responsible for energy

improving energy efficiency and reducing energy

management often being highly skilled, offering a

costs, the EI is holding a 12-day European Energy

whole-systems approach to energy efficiency, the

Manager (EUREM) qualification programme.

role and responsibilities of energy managers has not

Undertaking such a course which will help an

always had the authority and status it deserves.

organisation achieve energy savings and reduce

The good news is that attitudes are changing.

emissions. Bookings are now open for this

What was once seen as a ‘nice to have’ role

qualification with the course commencing in

is becoming essential for forward thinking

May and held in blocks of three days across three

organisations, as shown by the increase in numbers

months. For more information, please visit

of energy managers in the UK and worldwide.

www.energyinst.org/eurem

A good place to start is with the BS EN 16001 energy management standard. Launched in the

The Energy Institute (EI) is the leading

UK by the BSI in 2009, it is the only standard to

chartered professional membership body for the

focus solely on energy efficiency. This standard was

international energy industry, responsible for the

the first of a wide ranging portfolio of standards

development and dissemination of knowledge,

aimed at supporting the European Energy Services

skills and good practice, working towards a safe,

Directive with an emphasis on improved energy

secure and sustainable energy system. Supporting

efficiency. Designed to help organisations establish

all those studying and working in energy, and

the systems and processes necessary to improve

with over 14,000 individuals and 300 companies

energy efficiency, this should lead to reductions in

in membership, it offers learning and networking

cost and emissions through systematic management

opportunities to support career development.

of energy. It is intended to apply to all types and

Delivering professionalism and good practice, the

sizes of organisations, accommodates diverse

EI addresses the depth and breadth of energy in

geographical, cultural and social conditions,

all its forms and applications, providing a scientific

and takes into account legal requirements and

and technical bank of knowledge for industry. For

information about significant energy aspects.

more information about chartered status, training

The standard also requires organisations to measure their consumption; conduct an audit

and development for energy managers, please visit www.energyinst.org

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Started in 1865 as a grain trading company. Today its portfolio ranges across food, agriculture, industrial and financial services In 2008, the company’s Manchester plant changed its starch modification process by starting using locally grown wheat, rather than corn, as its raw material The company has a solid graduate intake programme, thanks to its strong link with Manchester University Cargill has reduced energy consumption by 40% in the past decade

DEFENCE

MBDA 120 Is the largest European company in the sector by turnover at £3bn a year. It produces 4,000 missiles annually In the early 1990s, to achieve maximum efficiency in its plants, MBDA became one of the first proponents of the Kawasaki Manufacturing System in the UK Has a scoring system for the components it sources, to understand the level of interaction it needs to have with suppliers, which are also individually rated Needs to keep machines it has had for over three decades, to service its back catalogue of products

AUTOMOTIVE

The company ships to order approximately £6m per month Maximum lead times for Invacare products is five days Invacare implemented an organisation-wide 5S programme

MICROELECTRONICS

SPTS 146 SPTS manufacture semiconductor wafer processing equipment used in the fabrication of a wide range of microelectronic devices SPTS products are used in the production of LEDS and MEMS 95% of SPTS products are exported Asia is the biggest market for SPTS products with Taiwan being the biggest PCD TECHNOLOGY

Mapal UK 150 The UK branch of the German machine tools group, Mapal UK was founded in 1993. The initial team of nine achieved its start-up objectives within a year 70% of business comes from repairing and regrinding The company did not lose any staff during the economic downturn

Michelin Tyres 135 The Ballymena site is Michelin’s fifth largest in terms of output It also focuses on the company’s main performance metrics, The Michelin Manufacturing Way The company has no issues with skills retention, as the average employee attrition for the Ballymena site is just over 2% Staff from Michelin sites around the globe visit Ballymena to learn more about the facility’s outstanding quality performance To tackle its high energy bill, twice that of sister factories, the site will install two wind turbines next year

All companies featured will be entered into the MIA Award 2011

Bucking Investing to achieve sustainable growth The shop floor of Nuaireâ€™s headquarters in Caerphilly, Wales

It is not often that a manufacturing company makes a single innovation that will revolutionise its entire operation. However, as Tim Brown found out from the engineering team at Welsh ventilation equipment manufacturer Nuaire, the integration of a new set of IT software is set to blow the market away.

Factory of the month Nuaire

Established

in the 1960s, Nuaire has developed a strong position within the ventilation and air handling market. Over the last two decades and partly due to new environmental regulations, the company has introduced a number of new technologies and products. This expansion has resulted in a strong period of growth which has seen Nuaire grow its turnover roughly 10 fold to reach a total £60m. Although the company’s headquarters are based in Caerphilly, the company’s 450 staff are spread throughout the UK, Ireland, France and the Middle East. As a key part of the Nuaire strategy, it has developed an extensive sales force which expands to every major metropolitan area throughout the UK. The company produces powered ventilation and air handling equipment for both new and retrofit construction and caters to projects ranging from residential through to major construction and infrastructure. Its products, which

It used to be that 70% of our turnover was from standard products. Now the majority of our business is in the bespoke market Engineering Manager, Mark Hanson

include ventilation systems, air handling units as well as heat recovery systems, are fitted in schools, hospitals, social housing projects, car parks, tunnels, hotels and also in independent residential properties. Nuaire has around 50,000 saleable product codes and is constantly looking to improve and increase its offering. Although the company carries a number of standard products, which are available for next day delivery, made to order products that are tailored to the needs of the customer are becoming much more popular. “This wasn’t always the case” says engineering manager Mark Hanson. “It used to be that 70% of our turnover was from standard products. Now

Factory of the month Nuaire

Nuaire employs a total of 450 staff across the UK and Europe

the majority of our business is in the bespoke market. As a result, we are implementing provisions to accommodate that change and to drive the business forward.”

Environmentally driven The environment is a key driving factor for Nuaire and the company not only produces ecologically friendly products but also aims to do so in an efficient

environmentally friendly manner. “If we promote the fact that we manufacture ecologically friendly products as a part of our range then we feel that we have an obligation to be eco-friendly within our operation,” says Hanson. “As such we monitor our energy usage and wastage very closely and are very much committed to the environment management system ISO 14001 and Carbon Trust Standard.” The company ethos is to satisfy the required specifications needed by the customer whilst also ensuring that the product will operate in the most efficient manner possible. “When constructing an air handling unit,” says Alun Thomas,

SIC is a market leader in the manufacture, supply and distribution of electrical and mechanical assemblies supplying customers throughout the globe from their manufacturing base in Swansea, South Wales. The company provides strategic manufacturing services to a wide variety of industries, and while its origins lie in harness design and manufacture, their business has evolved over the past forty years. With the recent refurbishment of their 192,000 sq ft manufacturing site SIC has expanded its service portfolio to cover all aspects of electrical and nonelectrical design and, through their partnership approach they have been able to successfully offer highly competitive complete outsource manufacture services to a number of pioneering market leaders. Nuaire is one such client who SIC has been working in partnership with for the past 7 years. “We are proud to have Nuaire as a customer - they are a leading innovator in their field and a powerhouse in terms of market and product development. That, coupled with the fact that they are home-grown Welsh talent makes it a very rewarding partnership” explains SIC Technical Director Phil Hurlow. And it’s precisely partnerships of this type that SIC are keen to nurture with their clients. “We know we can offer significant cost savings and productivity benefits to all types of manufacturers –including those in Wales’ emerging high-technology and scientific industries - who are considering outsourced manufacture as part of their business strategy.” Comments Phil Hurlow. “Not only can we help businesses better understand the most effective and efficient ways of streamlining their manufacturing activities, we can now also provide a one-stop manufacturing facility and available workforce which is ready to work as an extension of a client’s business,” he added. These clients range from global market leaders to niche start ups, and the services SIC offers them vary widely – from simple harness assemblies to fully project managed procurement, production and packaging of goods.

However, with flexibility and responsiveness as the cornerstones of the company’s business, SIC is well equipped to fulfill their customers service requirements; from one off orders or small production runs to more complex and high volume business. “We manufacture harnesses from as small as 25 millimetres to as large as 25 metres both with simple and complex circuits and we’re able to construct bespoke manufacturing cells for our clients where needed. So, whether it’s a specialist clean area facility for the medical profession or a dedicated factory unit for complete machine builds, we have the infrastructure in place to allow us to provide our clients best fit manufacturing solutions.” SIC always manufactures to ISO 9001/2008 standards along with UL/CSA where required, and, as the company has spent over 40 years building their enviable reputation for manufacturing excellence, they are very keen to protect it. Their client acquisition and retention rate is amongst the best in the industry, and so, it would seem that this is one Welsh manufacturer, who, through continued investment, innovation and excellent partnerships is standing the test of time.

Published in association with: sic LTD T: 01792 458777 E: info@sicltd.com SIC Ltd. 66 - 70 Morfa Road, Swansea, SA1 2EF

www.sicltd.com

Factory of the month Nuaire

Investing in machinery capability is meeting the needs of a challenging market, says production manager Martin Lyons New Prima laser machine technology was introduced by Nuaire last year to replace a punching machine used to cut profiles in thicker sheet steel materials used in the manufacture of fan panels, bodies and casings.

This new equipment has benefited the business in a number of ways. It has significantly enhanced productivity, doubling the speed of processing and reducing material consumption. The equipment also promises noiseless operation, removing the requirement to invest in noise abatement equipment and creating a healthier and more user friendly operating environment. Process capability has also been enhanced, allowing curvilinear profiles to be accurately cut in a single pass instead of being â€˜nibbledâ€™ sequentially. Complex profiles can be achieved simply and efficiently, something which was previously only achievable through CNC machining centres. The new Prima lasers also allow Nuaire to perform high quality profile cutting in mild steel up to 25mm thick, compared with the 8mm thick maximum cutting powers of nibbling machines. In addition, laser cutting allows for the production of high quality finished edges which require no further processing. The production requirements of the business have changed considerably since the punching machines were installed. The volume of work through Nuaireâ€™s factory has nearly doubled whilst simple punching requirements are progressively being replaced by more complex profiling needs. The thickness of material has increased considerably as Nuaire has developed ever larger air handling unit products and Axial Fans and the company is producing a far larger amount of stainless steel work than before. The laser technology reduces the number of sharp edges, by providing a better cut finish on the component, reducing the risk of injury within the factory. In addition, investment in the lasers has allowed Nuaire to benefit from reduced programming, set up, handling time and downtime. With the punching technology, the sheet of material would move around the bed of the machines to the appropriate punch location and as more of the sheet was punched, it became weaker. The programmer had to take into account the sequencing of the punching to ensure the integrity of the sheet was maintained until the completion of the punching cycle. This requirement is no longer an issue with the laser, as the sheet remains in the same position on the machine bed and the laser head simply moves into the appropriate position. Additionally, the Prima laser machine handles the removal of components without the need to do so manually and returns the components to the receipting area of the handling equipment. Investing in such versatile machinery has meant there are fewer restrictions on component shape. This has allowed Nuaire to reduce punching time on a number of components and has given the business the flexibility to improve the design and aesthetics of its products. The lasers also prevent the need to sub contract 6mm and 8mm thick components or stainless steel components because unlike the punching machine, it is able to produce these components.

HVAC System Engineers Farmwood Mechanical and Electrical lead the market for commercial and industrial heating, ventilation and cooling installation, servicing and support across the south of England.

ased in Kent we have built a reputation since 2002 for the highest quality and safety standards in all kinds of HVAC, mechanical and electrical engineering. Operating across the whole of the South of England and Midlands we are the region’s only approved agent for Nuaire systems and offer extensive experience across all major mechanical and electrical systems. We hold strict Company policies in environmental aspects. Our experienced engineers are logistically based in various locations around the South England to ensure a prompt response. Our full range of services includes Industrial, commercial and domestic ventilation, Including energy saving heat recovery systems, Schuco Solar systems, Industrial, commercial and domestic

heating, refrigeration and air conditioning. · Approved Nuaire installations and maintenance · All ventilation systems servicing and repair · Office, retail and commercial air conditioning · New heating installations and refurbishment · Routine and contracted maintenance · Emergency servicing and repairs · Gas safety certification, testing and fault finding · Ductwork installation and maintenance

Hot and cold water services and chlorination We hold the following accreditations: · Gas Safe · ISO9001 · OHSAS18001 · Safe Contractor · Construction Line · CHAS · F Gas registered We pride ourselves in offering an excellent customer service to each and every client.

Published in association with: FARMWOOD Tel: 01795 432 525 Email: info@farmwood.co.uk Web: www.farmwoodmechanical.co.uk

Factory of the month Nuaire

The company’s new IT implementation will help reduce product lead times by up to 80%

“there are three considerations to take into account which are size, pressure drop through the unit and efficiency. If you want something that is very efficient you need a low pressure drop. In order to have a low pressure drop, you need a big capacity unit so that the air can get through it. Obviously that might not always be possible due to space constraints but we are able to fit particular components to maintain the required pressure.”

New software With the assistance of a bespoke software package the company has been able to implement a new IT selection software system. Part of the system incorporates the company’s own quoting scheme. It allows Nuaire to take any ventilation system that a customer wants, feed in the parameters required for the job and use the programme to then very quickly select the parts that will satisfy the customer’s

requirements. Feeding in the specifics such as air capacity per second and external static pressure, the software will then illustrate a diagram including the frame size and allow the user to select the components that will create a unit meeting the required specifications. “All this used to be done manually,” says Alun Thomas, the person largely responsible for the implementation. “In

Previously we might have received a job request and not return a quote to a customer for up to two weeks Engineering Manager, Mark Hanson the system we have also fed in all our suppliers’ details, including part numbers and product specifications which carry a 12 monthly agreement on prices. Now that we don’t have to wait for confirmation from our suppliers it means we can be first in for quoting on a project; this has also removed a lot of waste from the business.” The sketches that are provided to Nuaire customers for approval are then generated automatically as are the

Steelco (UK) Ltd E

stablished for over 22-years, Steelco (UK) Ltd is among the UK’s leading independent Steel Stockholders – a combination of experience and expertise helping to keep valued clients such as Nuaire Ltd at the forefront of their respective industries. In over two decades Steelco has witnessed significant advancements made by our clients. Processing technologies have continually evolved and the demands made by newer, more sophisticated machinery has become increasingly more stringent. Thus, Steelco has always sought to keep pace with our forward thinking clients with continued reinvestment and responsible sourcing. Closely allied to Europe’s finest steel manufacturers helps Steelco to

ensure the foundation for a successful end product. Thereafter, a philosophy of continued self improvement has seen substantial, year-on-year investment in plant, machinery and logistics – all designed to guarantee our clients an efficient, cost effective and reliable supply partner. Our 15000 square-feet facility is located in the heart of the West Midlands and central to all major motorway networks. With two decoil lines and our own transport fleet, Steelco is perfectly positioned both in terms of location and facilities to meet with the sternest of demands. An emphasis on quality and service means that our clients consistently rely on Steelco for quality critical, time sensitive applications. From retail

environments to Wembley Stadium, you will find Steelco’s material performing every day. From aesthetic to fully functional, Steelco is proud to be associated with clients whose products appear across the globe in a wide variety of everyday applications.

Published in association with: Steelco UK Limited Tel: 01384 455535 Email: sales@steelcouk.com Web: www.steelcouk.com

Factory of the month Nuaire

unit weight estimations. The weight is calculated and can be broken into sections for delivery. The software will then automatically divide the product and estimate the delivery cost. â€œOther people use selection software but we are the first to combine it with a manufacturing scheme. When we complete the introduction into the manufacturing facility, a process which once took up to seven weeks to complete will now only take seven days. Every step in the chain, which currently is completed manually, is just another process during which a mistake could occur. If we can do this, then we can

Nuaire at a glance Location

Caerphilly, Wales

Products

Ventilation units

Site

250,000sqft

Markets

Industrial, commercial, hotels, student accommodation, schools, healthcare, supermarkets, government

Employees

450

Key people

Mark Hanson, Martin Lyons, Alun Thomas, Alun Jones

Turnover

ÂŁ60m

Feeding in the specifics such as air capacity per second and external static pressure, the new software will illustrate a diagram including frame size and allow the user to select the components that will create a unit matching the required specifications.

Regal Beloit C

MG Electric Motors (UK) Limited has been operating in the UK since 2002 and for many years has proven to be a strategic partner for Nuaire, thus providing quality and energy efficient products for the domestic and commercial market. CMG’s contribution to the future development of Nuaire’s product range will now be supported by CMG’s parent company, the Regal Beloit Corporation - the world’s second largest manufacturer of industrial electric motors. The RBC Group possesses a number of electric motor manufacturing sites across the globe and as such can offer a varied scope of supply for Nuaire coupled with the

highest level of technical response and assistance. We are dedicated to providing Nuaire with all the industry updates as well as working in conjunction with the view of maintaining Nuaire’s status of the market leader. Our continual support will strengthen with the new brands under the RBC umbrella and in line with these new acquisitions, CMG Electric Motors (UK) will shortly undergo a re-branding exercise from which it will emerge as Marathon Electric Motors. The future brand name very much describes our future intentions and strategy. Marathon Electric Motors will keep running ahead to ensure that we head and shape the

future of the electric motor industry as well as the fact that we are ‘ in it for the long haul’. Our innovative approach and vast industry experience coupled with our ethical way of doing business makes us the perfect partner for Nuaire. We will continue in this Marathon. (www.regalbeloit.co.uk)

Published in association with: regal beloit Uk Tel: +44 (0)1933 230900 Email: info@regalbeloit.co.uk Web: www.regalbeloit.co.uk

Factory of the month Nuaire

New residential innovation Sunwarm Air is an intelligent and unique approach to whole home ventilation and is an entirely new technology to be SAP Appendix Q recognised. In addition the system, which maximises energy efficiency in the home by capturing solar energy via two roof collectors, has been proven to meet Code 4 for Sustainable Homes. The small air handling (distribution) box has been designed using expanded polypropylene which provides excellent thermal insulation

automate the process and efficiently provide customers with allocated slots within the production schedule. “Currently the logistics of selling a standard type product are far easier than selling a custom kit. For any custom unit, even if it is standard and simply requires a port hole to be added, that porthole will need

and incorporates an all year round low energy positive input ventilation unit. The system monitors a plurality of temperature sensors located within the ducting of each of the three inlet locations; the collectors, loft space and fresh air intake. The flow of air through the system is then automatically controlled to optimise energy efficiency, whilst always providing adequate ventilation to the home; preventing condensation and moisture build up.

Sunwarm Air is a cost effective ventilation solution suitable for both new build and self build homes, specifically designed with the housebuilder in mind. These units are installed quickly and simply in to the home’s loft area negating the need for duct runs and minimising disturbance to the building fabric. Utilising the company’s expertise within the ventilation industry Nuaire offers a complete supply and design solution package to support this unique approach.

handling throughout the company. This means new drawing and a new BOM. Using our new system with its traceability and flexibility will allow this all to be completed immediately.” “As a benchmark,” says Hanson. “if we were to run this system manually as opposed to the new system, the process would take weeks longer. Previously we might receive a job request and not return a quote to a customer for up to two weeks.” Now that the responsiveness of the company is increasing dramatically, new potential customers are starting to demonstrate a real interest. “We are seeing colossal interest in this system and the surge in quotes has been an exponential curve since we started in September,” says Thomas. This all means that Nuaire has an integrated process from product design

Nuaire was the first UK fan manufacturer to receive the quality standard BS5750, now ISO 9001:2008.

Focused Recruitment F

ocused Recruitment is an independent recruitment service provider with a strong local presence, having achieved both corporate and individual accreditation from the REC you can be assured our consultants are committed to ensuring a consistent level of professionalism, in an approachable manner, whilst remaining focused on our clients’ ongoing recruitment needs and working on affordable solutions to suit fluctuating business needs. Extensive, expertise, dedication and a thorough understanding of the client’s team dynamics enable us to select prime candidates with the core skill set required who will deliver excellence. With a proven track record of delivering affordable staffing solutions to both blue chip clients and SME’s we provide a total consultative service advising on ever changing legislation We have

a reputation for delivering recruitment excellence which has allowed us to build up strong and close working relationships with our clients. Testament to this is our close working relationship with the Nuaire Group, where we have gained an extensive insight of their departmental and overall business needs and requirements. We are very proud to be a preferred

supplier of the Nuaire Group. This is a relationship which has developed over the years ensuring we are their first call for recruitment and staffing solutions. Focused Recruitment is committed to working with you to enable you to succeed in uncertain economic times ensuring and guaranteeing that when you succeed…..so do we.

Published in association with:

Tel: 01443 816747 Fax: 01443 815284 Email: office@focusedrecruitment.co.uk Web: www.focusedrecruitment.co.uk

Factory of the month Nuaire

Manchester Schools case study With issues such as air quality and energy efficiency becoming increasingly more important, delivering ventilation systems which create a fresh, healthy and comfortable environment is paramount, as well as providing an optimum energy saving ventilation solution. In a project commissioned under the Building Schools for the Future (BSF) initiative, Manchester City Council tasked Nuaire with delivering high quality facilities and integrated technology into schools and providing energy efficient ventilation solutions which would upgrade and refresh existing systems in the cityâ€™s secondary school buildings. Nuaire utilised its XBOXER 55 product which was developed from an existing ventilation system product and was specifically designed for schools to effectively meet the stringent requirements in place for new school buildings. These requirements included the provision of high quality, fresh and healthy air. The XBOXER 55 was selected because it was quiet, compact, energy efficient and demonstrated overall improved performance ahead of competitors. The projectâ€™s design meant that units would be completely exposed, rather than being hidden within ceiling voids. Nuaire installed a gloss white finish to reflect light and to blend into classroom surroundings. The result of an intelligently designed and implemented project was to provide pupils with an optimum learning environment, with no interference from noise or unsightly units and to allow for the best quality ventilation all year around. Nuaire is also the first UK ventilation company to achieve the Carbon Trust Standard. Meeting Manchester city councilâ€™s challenging criteria involved contributing a product that achieves commercially viable low carbon solutions.

to quotation through to manufacture, using software that helps automate the whole process for each custom designed product. This growing level of interest is already justifying the investment and implementation of the new IT system. Considering even greater levels of improvement are still to come following the introduction of the

Over half of our current turnover is from new products that have been introduced in the last five years Engineering Manager, Mark Hanson system into the manufacturing department, Nuaire is expecting interest to continue to swell. And, if the initial reaction from the market is anything to go by, the changes and innovations at the company, both in terms of operating mechanisms and product offerings, have definitely laid the groundwork for an impressive period of growth and development. In addition, the company also has a number of innovative environmentally friendly products.

Prima Finn-Power T

he PRIMA group includes R&D and manufacturing facilities located in Italy, Finland and USA, as well as sales and service subsidiaries in over 60 countries in order to guarantee local support to our worldwide customer base. With about 1400 employees worldwide, outstanding know-how and state-ofthe-art technology, we are one of the prominent companies in the metal working global market. We pride ourselves in our ability to provide flexible, tailored solutions to support our customers in their quest for productivity and quality. The NUAIRE system is a prime example: our Platino laser cutting machine and a Tower Server are fully integrated within the company ERP by our customised, end-to-

end system management software, which takes care of the whole process, from the ERP-generated production schedule straight to the finished parts. Not only do we offer a wide variety of products, but also a range of solutions for their integration in flexible manufacturing systems. From stand-alone machines to the most complex fully automated FMS installation, through integrated

software solutions, we are flexible to adapt to every requirement. With us, customers also find energy-efficient solutions. Whether you are an environmentallyconscious organization or are after energy and consumables savings, our state-of-the-art technologies â€“ fibre lasers and servo-electric actuation, to name only a couple â€“ will contribute to the achievement of your targets.

Published in association with: PRIMA FINN-POWER UK Ltd Unit 1 - Phoenix Park Bayton Road Coventry CV7 9QN

Tel: 08444 996241 Web: www.primafinn-power.co.uk

Factory of the month Nuaire

An example is the heat recovery system for residential and commercial properties. As opposed to a traditional ventilation system, which extracts the heat and energy from a room and releases it back into the atmosphere, the Nuaire heat recovery system can extract the hot air from a room, filter it and recover the heat at an efficiency rate of greater than 90%.

Venting innovation Nuaire was the first UK fan manufacturer to receive the quality standard BS5750, now ISO 9001:2008. According to Hanson, quality underpins absolutely everything the company does and extends beyond the product to include its drive towards innovation, responsiveness and on-time delivery to customers. Continuous improvement is at the heart of the business operation with Change Agent and Business Improvement Teams driving change. Nuaire has trained over 60 members and have completed vocationally-

The new Prima laser machine technology which was introduced by Nuaire last year to replace a punching machine

Manchester City Council tasked Nuaire with delivering energy efficient ventilation solutions which would upgrade and refresh existing systems in the cityâ€™s secondary school buildings.

Pallet-Track A

s a provider of overnight distribution services, PalletTrack understand that not only are we transporting your products to your customers, we are also fulfilling your commitment for an on time well presented delivery. Our role is therefore significant in the end to end value chain that delivers a sustainable competitive advantage for your business and products. In accepting this responsibility, PalletTrack recognise that our distribution services must be high performance, robust, repeatable and competitive. We also understand the benefits to our business of providing excellent service. Because we are able to give your products a competitive advantage, you will experience growth and we will

grow alongside you. This philosophy of partnership drives the way in which we manage our distribution services and goes a long way to explaining why our client retention rates are so high. One such example is the Nuaire Group whose products have been carried by Pallet-Track for over 8 years now. The relationship has developed into a strategic business partnership and the South Wales Pallet-Track Depot Inter-haul Pallet Services Limited provides contract logistics services and bespoke vehicles to Nuaire in addition to overnight delivery services. The combination of over 70 PalletTrack Depots throughout the UK & Ireland and our expertise in resource management means that we are

able to fulfil our customerâ€™s delivery expectations in every area of the country. Added value features such as electronic data capture and secure web-based reporting bring tangible benefits to our customers. In addition to providing excellent service throughout the UK & Ireland, PalletTrack also provides well developed distribution services across Europe.

Published in association with: Pallet-Track Tel: 0870 385 0055 Email: admin@pallet-track.com Web: www.pallet-track.com

Factory of the month Nuaire

related qualifications, NVQ’s and business improvement techniques. “Innovation is also key to us,” says Hanson. “We have bolstered up our team of design engineers so that we now have more than 20 design engineers creating new product designs as well as moving our current range forward. Over half of our current turnover is from new products that have been introduced in the last five years. It is therefore key that we remain at the forefront of the market while also adhering to the new legislation that is being introduced.” Nuaire has also recently teamed up with natural ventilation expert Breathing Buildings, in what they believe to be the first collaboration of its kind to offer customers a full range of both powered and natural ventilation systems. Nuaire will now offer a wide

Stadium Electronics Established in 1911, Stadium Electronics is celebrating 100 years in business as 2011 marks its first Centenary.

oday, with over 1300 employees and operations in the UK and China, Stadium has earned its reputation as a leading electronic manufacturing services (EMS) provider working with OEMs in a diverse range of sectors throughout the world. With specialist experience of integrated manufacturing solutions for high technology, high mix products, we offer a complete value added service including global material procurement, product tooling, PCB assembly, box build, packaging solutions and logistics. The internal design and engineering resource at Stadium is a valuable asset for many of our customers with whom we work with on re-engineering, new product introductions, cost reduction

100

engineering and product life cycle management. Our engineering expertise ensures cost effectiveness through a project managed solution delivering your product on time and on budget. Our wholly owned China operation offers medium to high volume production supported by UK account management and IP assurance. Our facilities are ISO 9001:2008 registered with ISO 14001 environmental, ISO 13485 medical and

TS 16949 also in place. A culture of lean working practices and continuous improvement ensures a focus on quality and efficiency at all times. Through our partnership approach we are transparent in our working and, having built our reputation on integrity, flexibility and responsiveness, we can offer our customers a level of confidence in an EMS partner that has proven success and longevity.

Published in association with: Stadium Electronics Tel: 01429 852500 Web: www.stadium-electronics.com

Factory of the month Nuaire

range of e-stack natural ventilation solutions which work by using upward displacement in the summer and natural mixing ventilation in the winter. Utilising their own onsite design and development laboratory, the company is able to ensure their products perform as desired through the use of onsite testing. In addition, Nuaire has developed a strong relationship with the Building and Research Establishment (BRE) and has incorporated a strong graduate programme while also approaching the academic organisations for specific R&D tasks. One of the results of the R&D department has been the introduction of axial products, which are designed to meet strict fire regulation standards. Such fan products are used in applications such as car parks, hotels or tunnels where, in an emergency situation, they must perform at temperatures of up to 400째C for one or two hours. These products have proven particularly popular in the Middle-East market where they have been used in a number of prestigious construction projects.

101

The balance

of trade In an age of globalisation, when multinational corporations span the globe, it is hard for large enterprises to hold on to a sense of scale and perspective - to remember that locality is important and that community matters. But however hard the challenge, some organisations are responding in exemplary style. Jane Gray finds out why Cargill is one of them. Among its many operations, Cargill refines glucose for use in food and drink, pharmaceutical, animal feed and other manufacturing processes

102

Food and agriculture Cargill

Established

in 1865, now headquartered in Minnesota, USA, Cargill is a manufacturer and marketer of a diverse product portfolio ranging across food, agriculture, industrial and financial services markets, the latter area specialising in risk management. While such a disparate set of customers with varying demand types must be daunting, the diversity is also the secret to Cargill’s strength as plant manager for Cargill’s Manchesterbased facility, Paul Kingston explains: “We have a very diverse portfolio but it is also a very balanced portfolio. The diversity of Cargill’s offerings has

It is in times of volatility, such as those we are experiencing right now that our diversity really helps us Paul Kingston, Plant Manager, Cargill Manchester evolved over the last 146 years. We started off as a grain trading company and over the years that focus has grown incredibly and we still have designs for further significant growth. “That strategic intent is founded on core values that have been with the business throughout its long heritage. We have a strong ethical culture, a strong health and safety culture meetings at all levels always begin with a discussion of relevant safety issues first and foremost - the balance of the business works because these concerns remain central in everything we do. “It is in times of volatility, such as those we are experiencing right now, that our diversity really helps us. We have a very strong pedigree for risk management and raw material procurement, the Cargill risk management business unit was grown on internal capability, I think that really helps to differentiate us at this stage.” Cargill operates its four major divisions across 66 countries with the support of 131,000 employees. The company first came to Europe in 1953 and now operates in 33 countries including, of course, the UK, where it has 19 locations across the length and breadth of the country.

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Food and agriculture Cargill

Just a few of these sites take in Liverpool, York, Wolverhampton, Hereford, Cobham and London. Of course, not all of these are active in the manufacturing steams of the business but Cargill does have manufacturing strength in the UK across its oilseed crushing and refining processes, its primary cocoa processing, industrial chocolate manufacture, speciality food ingredients manufacture and many more, not least of which is the starches and sweeteners business based in Manchester. With such a wide range of activity going on it would be easy for anyone at Cargill to feel lost – a small cog in a very large machine. However, as Kingston explains, consistency of values makes for a united front: “Starches and sweeteners Europe falls under a larger overall platform called food ingredient services. We make up a big chunk of Cargill’s portfolio

There are huge benefits to processing wheat grown locally in the UK which include benefits for the farmers in our supply chain and for the stability of the UK economy as a whole Paul Kingston, Plant Manager, Cargill Manchester but such organisational structures are only for internal convenience. To the outside world we are just Cargill. One customer faces no matter where in the business they may be getting services or ingredients from. “The starches and sweeteners Europe business links up with those in North America, Asia and so on. Each business unit is grouped regionally but within the Europe group we operate as a network. Each plant supports the other so that, although the Manchester plant produces predominantly for a domestic market, the proportion of exports can change from week to week.” It’s all about finding the most logical location to supply a customer from in order to meet their needs, whether that includes the very niche products supplied by

Paul Kingston, plant manager at Cargill’s Manchester facility

Centenary celebrations “We are very proud to be celebrating the centenary year of glucose production from this location,” says Kingston, and to prove it Cargill will be staging numerous events throughout 2011 to give recognition to the contribution made by the Manchester glucose plant to the prosperity of the local community and, most importantly, the contribution of that community to the success of the plant.

Cargill will be publishing a book, commissioned from a local author, to commemorate this centenary year. The work will detail the sites heritage, from the creation of Trafford Park as one of the UK’s first industrial parks in 1896 to the establishment of the first glucose refining plant by Nicols & Neagle in 1911. The history lesson will then take readers through the mill of acquisitions and re-brandings that the glucose refinery has experienced right up until its incarnation as Cargill in 2002 and the exciting success it has seen since. The book will also include anecdotes and stories from retired, as well as current workers. Planned events for the enjoyment of Cargill employees, past and present, and families too of course, include:

Family open day in May Summer Fayre and Ball in June Stakeholder Event in September A number of sporting events throughout the year

some of the network or more generic ones which are manufactured more widely. Running concurrent with this ethos of company camaraderie however, it is obvious at the Manchester plant, which represents Cargill’s Sweeteners and Starches business unit in the UK, that there is a great deal of local pride on site. In part this can be attributed to the strong

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In 2007 Cargill undertook a review of non-core activities at the Manchester site and tendered these services with the aim of consolidating the supply chain; implementing robust SLA’s; achieving sustainable cost base reduction and introducing a standardised approach to the management of its facilities. Scope of Work A broad scope of support services was included: Cleaning – including daily office cleans, janitorial, deep cleaning, window cleaning and maintaining site car parks and on-site access roads Catering – including restaurant, hospitality, 24/7 vending Front of House – including, reception, switchboard, helpdesk/ CAFM, meeting room and hospitality bookings Business & Office – including mailroom services, contract administration Security - Access guarding, routine patrols and weighbridge operations Building Operational Maintenance managed by a planned preventative maintenance programme – including mechanical and electrical, industrial cleaning, handyman duties Project Management – including small works projects, moves and energy efficiency Space planning & Outdoor – grounds maintenance, snow clearing and gritting Delivering value By implementing the FM self delivery model we have improved services and reduced costs We have reduced and simplified Cargill’s FM services supplier base from thirteen to one, thereby eliminating multiple management fees Consistent service levels are achieved across all service streams – measured against service level agreements

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We have freed up our client’s time in managing FM services, enabling them to focus on their core business Work studies have been performed to increase productivity. Operatives have received additional training to provide a multi-skilled workforce By internalising some previously sub-contracted services, i.e. snow clearing and gritting, we have significantly improved service levels by ensuring the plant is accessible and remains operational AN INTEGRATED APPROACH TO SUPPORT SERVICES Cost savings and standardised operating processes are two of the main benefits Cargill has gained by contracting its support services to

Published in association with: EUREST SERVICES

Eurest Services. The original three year contract has recently been extended based on the excellent standard Cargill receives from our service ethos culture.

“Compass has over the past 4 years continually raised the bar whilst providing ongoing Facilities Management across multiple streams. The site based team has integrated themselves with all of Cargill’s aims and objectives, and fully support the site operation. FM is relatively new to Cargill as a business model, but one that has opened up our eyes to a range of effective possibilities.” Peter Duffy, UK Purchasing Co-ordinator, Cargill.

Food and agriculture Cargill

Times they are a-changing Why does it make a difference to the Cargill plant that it uses wheat and not corn? This section looks at the practicalities of that switch over and how it was achieved without disruption to customers. The decision was actually made to convert the Manchester site into a wheat plant, rather than corn, around the time of the Tilbury plant closure in 2005. The conversion project took 18 months in all and the new site opened in April 2008. For a brief period the plant maintained both the wheat and corn processes in order to ensure that all customer orders were fulfilled to specification. However, the corn plant has now been raised to the ground. Until recent years, the vast majority of glucose production has been made from a corn base and the process for milling corn in preparation for glucose production is well established so the decision to switch to wheat was a significant departure from the industry norm. While the refinery processes for both wheat and corn starch are

manufacturing heritage of the area. The Cargill factory stands on a 41 acre footprint which has known starch processing operations for one hundred years – a fact that Cargill is celebrating throughout 2011 with a series of centenary events. But this heritage alone would not bring about the workforce engagement and grass roots innovation which is so noticeable around the Manchester facility. These characteristics are the product of several years of hard work and investment on the part of Cargill since it took a decision in 2005 to close its Tilbury-based plant, consolidating the UK starch processing business in Manchester, and then in 2008 to radically change the Manchester plant’ starch modification process by swapping its traditional raw material, corn, for the more locally prevalent wheat. With the escalating price of wheat regularly hitting headline in the last

almost identical it is the frontend of the process that differs significantly and which required such heavy conversion investment for the Manchester site. This front-end process includes the milling which separates the bran from the starchy part of the wheat, and a three phase separation process which categorises the starch yield into; High quality A and B starches with large, easy to process starch molecules. Lower quality C starches which are harder to process but can be used in the fermentation of potable alcohol Vital Wheat gluten which is used in animal feeds, particularly aqua-feed and in baked goods where it gives fresh bread its ability to spring back into shape when pressed The high quality A and B starches are those which Cargill uses in its glucose refinery where the process for creating a range of glucose products and specialised blends once again become similar to that used for converting starch from any raw material whether

it be wheat, corn or potato. The end glucose products, which are blended to suit a wide range of applications, are used predominantly in the food and beverage industry and the pharmaceuticals industry. During the site conversion project Cargill ensured that it was taking time to build an understanding of the new process employees would be working on. Expertise from North America, where Cargill has a flour producing business, were brought over to assist with training with the commissioning and stabilisation of the process as it got up and running. This help stayed in place for the first couple of years that the site was operational with the wheat milling process, working alongside the Manchester workforce. Such careful risk management was entirely necessary according to Kingston who comments: “We run through about ¾ of a million tonnes of wheat every year so if we don’t get it right we end up with a lot of wrong very quickly.”

Wheat is tested for fibre and starch content

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Food and agriculture Cargill

couple of years, Kingston looks back on this strategic decision: “In 2008 a significant investment was made in this plant to change our production process over to the use of wheat rather than corn. The investment cost was in the order of £100m. “There were a number of reasons for doing this; cost being among the foremost. We have great wheat crops here in the UK for making glucose so it made a lot of sense to move to a native material. It’s far more sustainable than the practice we were in of importing corn, predominantly from France. “Of course it was not long after that that wheat prices started to rise and you inevitably question whether you have made the right choice. But we have remained committed to our decision

and are happy with it because of all the thinking I mentioned before about our ability to deal with risk and with volatile markets. We see the bigger picture. There are huge benefits to processing wheat grown locally in the UK which include benefits for the farmers in our supply chain and for the stability of the UK economy as a whole. In addition overall transport costs are reduced lessening our environmental footprint as well.”

Cargill at a glance Established

1865

Sales revenues in last financial year

$107.9bn

Employees

131,000 (3,000 in the UK)

Key markets

Agriculture, food, industrial and financial

Wet separation

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WMB Installations Ltd W

MB (Installations) Ltd has provided electrical engineering and contracting services to the commercial, industrial and education sectors since 1982. The company was established to provide a dedicated service to clients needs and by tailoring our response accordingly we have created long term relationships with many blue chip companies, NHS and education institutions. We have the latest in computerised estimating and our in house staff can create designs and produce competitive quotations from any clientâ€™s criteria or design specifications. With our experience and determination for providing a unique and specialised service in the electrical field, we can work with any clients to ensure the most cost effective and energy efficient installations.

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Our trained and highly experienced engineering staffs are capable of carrying out projects in various fields from major industrial to works in listed and protected buildings. We have also undertaken special projects like the Salford Universityâ€™s Energy Hub, specialist clean room facilities and laboratory fit outs. Also, with our ongoing contracts with Cargill in Trafford Park it enables WMB to remain at the cutting edge of the latest in electrical and instrumentation industrial process control systems. As we enter our 30th year of trading we are committed to providing the best quality and safest installations, coupled with our affiliations with NICEIC, ECS-CSCS, Constructionline, CHAS and ISO9001 we aim to provide the complete service. We are now in pursuit of the Environmental Standard ISO 14001 and Health and Safety Standard ISO

18001 and we aim to reduce our landfill waste by half through new installation practices and use of a dedicated supply chain by 2012.

Published in association with: WMB (Installations) Ltd The Yard Dorchester Road Swinton Manchester M27 5NU

Tel: 0161 793 6019 Fax: 0161 727 7067 Email: enquiries@wmbltd.co.uk

Food and agriculture Cargill

Whatever the strategic business decisions behind the change however, there is no doubt that the rationalisation of the starches and sweeteners business in the UK, and then the overhaul of a process which employees were well versed in, took experienced staff out of their comfort zones and posed the challenge of re-skilling and working for process improvement on new ground. Although Kingston has only been manager at the Manchester plant for a short time, he knows the steep learning curve that staff had to take in their stride and says: “We’ve got a very talented and engaged workforce here in Manchester and we have a very nice mix of experienced employees and new, younger blood coming into the business.” Kingston goes on to clarify how that level of engagement is produced: “We have a solid graduate intake programme based on close links with Manchester University. This allows us to keep up with how to offer the right, exciting careers to the best graduates. We also have huge support for apprenticeship programmes and learning and development programmes to ensure that everyone has the right capabilities. So what does that lead to? It leads to a very engaged workforce that utilises the knowledge of our guys

A Cargill career? Cargill is pro-active in ensuring that it takes every opportunity to make itself an attractive career destination for talented and engaged individuals whatever their personal ambitions or requirements. Acknowledging this, Kingston says: “If there is not a realistic opportunity for someone at Cargill then something is seriously wrong because there is so much going on here. When we bring people into the business here, we are, of course, looking for the best people to help grow business at the Manchester site. But we are also looking for people who will help Cargill grow as a whole. We have four operators who are currently over in Holland signing off a project over there. If I look at my own career – I started in the UK and have spent years in France, Belgium and Indonesia before coming back to the UK. So, for a young engineer coming into the business, it is an exciting career prospect.” At a time when, although long careers with one firm are said to have become a relic of a bygone age, youth unemployment is at an all time high, Kingston believes Cargill’s diverse business portfolio offers the perfect balance of opportunity with security: “Cargill answers the needs of ‘Generation Y’. I have moved in my career every two or three years. So I really think Cargill fits the profile of a generation that might not want to commit to being in the same job for a long time. “The Cargill business units are already large multinational companies within themselves and it is very interesting to be able to change between those divisions and business needs while still having the security of working for the same company with the same core values.”

Operating plant in control room

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Cape Plc Intelligent solutions for industrial services

ape is one of the world’s leading providers of essential non-mechanical industrial services focused on the energy and natural resources sectors. Within the UK business, Cape has over 4,000 people providing non-mechanical support throughout the lifecycle of large secure industrial assets. This support ranges from pre-commission builds and routine maintenance, outages and overhauls through to life extension and decommissioning. Cape is the largest employer of access and insulation labour in

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the UK and services nearly half of the nation’s total power generating capacity. Our offshore business also provides fabric maintenance and deck handling at 24 manned installations and up to 60 unmanned facilities. The strength of the business revolves around the quality and depth of its people, with Cape having significant industrial “suitably qualified and experienced personnel” (SQEP) throughout the country. This allows us to deploy our knowledge and expertise and flex our management resource across a diverse range of challenges,

customers and business sectors. Cape is widely recognised as an organisation that provides the industry with safe, reliable and intelligent solutions. We pride ourselves on an exemplary safety record, customer retention and ability to provide cost-effective business solutions to meet our customers’ needs. Published in association with: Cape Plc Tel: +44 (0)20 3178 5498 Web: www.capeplc.com

Food and agriculture Cargill

Entrance to Cargill’s Manchester based office

Cargill in Manchester: Site acquired by Cargill: 2002 (purchased from Cerestar) Site invests in conversion from corn to wheat milling: 2005 Wheat process commences: 2008 Cargill employees in Manchester: 300 Core Cargill products from Manchester plant: Glucose Syrups, Glucose-Fructose Syrups

who have been with us for, perhaps, 43 years or more, and balances it with the new knowledge of those who have been with us for only a matter of days or weeks and whose knowledge is keen but mostly theoretical. “We find that this balance pools a great deal of energy for improvement and we really promote ideas and continuous improvement from within.” This effort to encourage autonomous improvements to Cargill’s processes is currently being formalised in an Ideas to Innovation campaign which is advertised around the site on poster and pop-up stands, particularly in recreation areas like the canteen. Although these ideas and innovations are welcome everywhere, there

are certain areas of focus. The main area targeted for improvement has been alluded to already by Kingston in his talk about reducing the environmental footprint of the Cargill supply chain. “We have been working pretty intensively for the last ten years on our energy footprint,” Kingston says, emphasizing that the company’s strategy here is far from being a ‘green wash’ but rather a core part of the ethical business model at the company’s heart. To wage this war on energy consumption Cargill have used a home-grown methodology known as Pinch analysis. This tool for heat integration was developed by Dr Bodo Linnhoff of Manchester University following a period of industry experience with chemicals company ICI. The analysis tool is now well established in industry as a means for improving the design of energy systems. Kingston explains: “It looks at what the theoretical best ecological footprint you can have is, although practicalities mean that you cannot always achieve that, it gives you a starting point for setting targets.”

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Food and agriculture Cargill

Wheat intake

Whatever the methodology for target setting and creating a framework for environmental improvements, it certainly seems to be working. Cargill has achieved 40% energy reduction in the past 10 years but the company still has a five year energy plan to live up to and Kingston sees opportunity for further improvement all around him: â€œThe fine tuning is going to take some time but there are still some big areas of opportunity. The price of energy is increasing all the time and so these projects are getting more attention and becoming sexier.â€? Looking beyond heat integration strategies to the broader opportunities available in Cargillâ€™s operations, Kingston observes how the natural versatility of the products the Manchester site deals in are being

One of the great benefits of our wheat process is that it is 0 waste. Everything is useful and utilisable. Even the bran, which has no starch or glucose potential, is used to make moist feed, largely for cattle Paul Kingston, Plant Manager, Cargill Manchester

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Nalco Nalco are proud to have been a trusted and proactive partner to Cargill Manchester for over five years meeting the site’s water treatment and water hygiene requirements.

hrough the close collaboration of our combined expertise, we are committed to continual improvement of the water systems on site to help minimise Total Cost of Operation using best available technologies such as 3D TRASAR and Nalco 360 Service. Based on but a few of the environmental and sustainability values and key drivers shared by Cargill and Nalco such as our common commitment to water and energy use reduction, high water quality standards, minimising the risk to public health, extension and protection of asset life, reduced maintenance and enhancement of plant safety, 3D TRASAR together with Nalco 360 Service were the cooling control systems of choice. The Nalco 3D TRASAR system has demonstrated its value through optimisation, early response recognition and rectification thus avoiding unscheduled downtime and plant critical conditions. The patented 3D TRASAR

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programme integrates the technologies to anticipate system variability and automatically responds to keep a water system in perfect balance providing peace of mind. Manchester also enjoys the following benefits of the comprehensive Nalco cooling water control package: 24/7 Protection & Reduced Risk – The Nalco 360 Service Expert Centre operates around the clock, to ensure someone is always watching your system, responding to alarms 24/7 leading to faster problem- solving. Consistent Level of Service & Systems Reliability – The Nalco 360 Service ensures all systems operate at the same high level of quality, regardless of where the controller is located. The Expert Centre ensures it is operating to best practices.

Sustainability – Saving water and energy, whilst making efficient use of chemistry is taken to the next level with Nalco 360 Service. Our highly trained experts review each system and make recommendations to further optimise the level of control. For further details contact: Peter Stokes at the Nalco Northwich office (Tel: 01606 74488) Nalco, the logo and tagline, 3D TRASAR and Nalco 360 Service are trademarks of Nalco Company. All other trademarks are the trademarks of their respective owners.

Published in association with: Nalco Tel: 01606 74488 Web: www.nalco.com

Food and agriculture Cargill

exploited to find synergies with suppliers and business partners which rationalise the product distribution process: “One of the great benefits of our wheat process is that it is 0 waste. Everything is useful and utilisable. Even the bran, which has no starch or glucose potential, is used to make moist feed, largely for cattle.” Cargill’s moist feed, which is branded in the Manchester area as Trafford Gold, has provided opportunity for supply chain rationalisation and the reduction of carbon footprint since the

same fleet of lorries used to collect the majority of wheat from local farmers is used to supply pastoral farmers in the area. This product is extremely popular in the Manchester area which has a strong dairy industry for although the fibre-rich bran base of Trafford Gold is unsuitable for human digestion it is a great source of nutrients for ruminant farm animals. Another area in which Cargill has looked first for local synergies with its own business interests before going further afield is evident in what Kingston describes as an “over the fence deal” with neighbouring company Royal Nedalco who produce potable alcohol. In February, Cargill announced its intention to acquire these Royal Nedalco’s alcohol operations and completion of the acquisition is dependent upon Cargill plant

Flour Mill

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Endress+Hauser: Not just an instrument supplier... As a global leader in measurement instrumentation, process automation solutions, maintenance and calibration services for industrial process engineering, Endress+Hauser has become a trusted partner of many manufacturers around the globe.

he companyâ€™s products and services set industry standards for quality and technological innovations, while expert support from a team of product and industry specialists enables customers to optimise processes, taking into consideration reliability, safety, economic efficiency and environmental protection. Endress+Hauserâ€™s large product portfolio includes level, pressure, flow, temperature and analytical instruments that are used by customers in many industries, including chemical, food & beverage, water & wastewater, life science, oil & gas, energy and primaries. In addition to this, specialist engineering services include the complete design

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and implementation of project solutions using open technologies. These provide information from the field to control, management and maintenance systems for increased accuracy and performance. When Cargill began work in 2006 on a new wheat processing plant in Manchester they turned to Endress+Hauser to supply a PROFIBUS field network solution that allows for process control, asset management, device configuration, calibration, diagnosis and condition monitoring. The system also included life cycle management software that makes a host of device-specific information instantly available, including manuals, certificates, software drivers and spare parts lists.

Having proven its expertise in project delivery, Endress+Hauser continues to provide Cargill with engineered solutions across a range of applications, delivering tailored support and services that cement this long-term business partnership.

Published in association with: Endress+Hauser Ltd Tel: 0161 286 5000 Email: info@uk.endress.com Web: www.uk.endress.com

Food and agriculture Cargill

regulatory approval, which is expected in the second quarter of 2011. Kingston says that he sees environmental targets and sustainability goals as being intrinsic to what he describes as a “play to win” culture at Cargill. This culture makes no room for complacency, so the fact that past achievements have been made is no deterrent for looking for greater benefits in the future. Of course, as is evident in Cargill’s determination to celebrate the Manchester site’s centenary in style, the company knows that ‘environment’ does not just relate to carbon emissions, energy consumption and ecological impact. It also means community. Cargill takes its relationship with the local communities around its centres of operation very seriously and, not only puts corporate responsibility at the heart of all its business decisions, but listens to the concerns of the communities its workers represent and acts to alleviate them. At the Manchester site for instance concern was raised that local charities were suffering in the wake of government budget cuts and a general decline in donations as recession hit home. Cargill has responded by filling an important gap in the support of local charities. The company also drives forward key projects within schools and colleges in the region which promote literacy and scientific innovation in young people. They run workshops in schools to help children understand important facts about nutrition and food safety and in addition they assist schools and colleges in building their capacity to deliver further educational schemes. Last year the Manchester plant attracted £50,000 pounds in donations for 8 different causes. One Family Fun Day alone brought in £5,000 for the Children’s Adventure Farm Trust (CAFT). This local charity provides holidays for disabled, disadvantaged and terminally ill children and their carers from across the North West Region. In addition to fundraising for CAFT, Cargill also gets hands on with improvement projects at the charity; with many Cargill employees investing considerable time in renovating and augmenting the farms to make them more comfortable and enjoyable for the children and their families. This is encouraged and supported by the Manchester site management.

All the above is instigated locally and voluntarily at the Manchester plant and is additional to corporate level support for global charitable causes including the Bill and Melinda Gates Foundation, The Global Food Banking Network, The Nature Conservancy, Living Lands and Waters, The Groundwater Foundation and many more. For Kingston this is all simply indicative of the appreciative culture that Cargill has to offer, one that has opportunity for all and seeks opportunity everywhere.

CHP Plant

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Rocket

men

Vidsel Test Range/RFN

Missile maker MBDA, with a £3bn turnover, is unique in Europe in serving global armed forces in the air, at sea and on the ground. Its UK production facility in Bolton, North West England is a model for advanced manufacturing. Mark Young explores the firm’s holistic approach to world class manufacturing through its product development, employee engagement and lean focus. 120

the disposable age we live in there are many things that are utilised only once. There are cameras, razor blades, contact lenses, newspapers, plastic bottles, fireworks and a plethora of items besides which are manufactured for one single use. These things are all inexpensive, though; none of them cost a six figure sum per unit. But a missile can. And, unlike those other disposable items now so ingratiated into society, there’s an awful lot of work that goes into creating a missile; it’s almost a

Defence MBDA

MBDA at a glance History

The company’s roots go back to the early 1900s. Missile manufacturing roots back to 1950.

Sector

Missiles for armed forces across land, sea and air

Employees

c10,000 globally

Turnover

c£3bn pa

Based

Sites across Europe including three major sites in Britain. Main UK production site in Lostock, Bolton.

One of our best efficiency breakthroughs has been the focus on waste elimination in all its forms, from the strategic value and use of industrial space to simply tidying the workbench Dave Ward, Head of Manufacturing, Operations Management and Technical Support

surprise that employees at producer MBDA don’t reserve some underlying frustration that the items they put so much time and effort into artfully piecing together ultimately end up being blown to smithereens. Seemingly unfazed, though, MBDA is one of the most technically advanced and well equipped missile suppliers in the world, producing over 4,000 missiles per year. It is the first fully integrated European defence group and its ability to serve armed forces across air, ground and sea gives it a unique

capability across the continent. With revenues approaching €3bn per annum it is also the largest European company in its sector by turnover. The company maintains whole product lifecycle involvement with an “end to end” capability, providing through-life servicing of the missiles with full sovereign control. MBDA as a company is an amalgamation of some of Europe’s most high profile and advanced missile providers. Its current incarnation is the result of a 2001 merger which brought Matra BAe Dynamics (itself a merger of the UK’s BAe Dynamics and France’s Matra Defense established back in 1996), together with EADS Aerospatiale Matra Missiles and the missiles systems activities of Alenia Marconi Systems (comprising what was formerly GEC in the UK and Alenia Difesa of Italy). EADS-LFK of Germany was added to the group in 2006. The company now has three major shareholders: BAE Systems and EADS, which hold 37.5 per cent of the company apiece, and Finmeccanica, with the remaining 25 per cent. Says Bernie Waldron MBE, MBDA UK director of manufacturing: “We are in a better position today, more than ever before, to deliver the synergies from harnessing the collective knowledge and expertise of our company for the benefit of our domestic and export customers.” The company employs just shy of 10,000 people worldwide, including 2,500 permanent employees in Britain across three primary sites. The main UK production site is in Lostock, Bolton. With 275 permanent employees and a further 60 temporary contractors, this site acts as the manufacturing authority for all MBDA UK deliverables, encompassing activities both across the UK sites and also in export countries where local facilities have been established to satisfy contractual offset requirements. Inert missiles and sub-systems are assembled here with further production facilities for electronic circuit card and cable-form assembly,

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Company structure:

together with a full complement of environmental testing facilities and back office support functions. Other UK sites include Stevenage, where the main research and development takes place including demonstrator and trials weapons assembly and test. Nearby, live weapons integration for both development and production takes place on the Henlow site which is registered to handle explosives up to 67 tonnes of explosives at any one time. Finally, in Bristol the company has a software development and systems engineering site. The company retains an office in central London, close to the Ministry of Defence.

Top of the range Over the 50 odd years since the company first began missile manufacture it has continually provided armed forces with the latest in innovative missile technology. Among a product portfolio of some 45 equipments, defence industry enthusiasts will

Meteor cutaway diagram

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recognise the Storm Shadow, ASRAAM and Rapier programmes as some of the most far reaching and advanced missile systems currently in global operation. Today, the company continues to break new ground by addressing manufacturing architecture and ‘producibility’, i.e. design for optimised manufacture, assembly, integration and test and support. This is aided by a concurrent product and process development strategy which involves the detailed design of a manufacturing solution for each process. This is a process of mutual influence by which a proven manufacturing capability can be demonstrated and realised, in parallel with a maturing product design and targets “whole-life” cost optimisation. Significant consideration is given, as early as possible to issues such as targets and constraints on the product, process and test equipment, demonstrable and qualified manufacturing and test processes, effective use of factory control systems like the MRP system, the just-in-time material supply system and preventative maintenance and calibration programmes. The company is also developing a leading edge new Beyond Visual Range Air-to-Air Missile (BVRAAM) called Meteor. Meteor is being developed in partnership with five other countries – Germany, Italy, Spain, France and Sweden. It is to be used with the Saab Gripen, Dassault Rafale and Eurofighter Typhoon

Defence MBDA

jets, and will have three times the ‘no escape zone’ of any other air to air missile currently in use in the world. With its radio frequency seeker it will be able to lock on to and hit sophisticated enemy warplanes before the host plane is even in sight of its adversary. Another innovation is the Dual Mode Brimstone (DMB) missile which was a response to a RAF Urgent Operational Requirement (UOR). The missile uses both Radio Frequency and Semi-Active Laser guidance which gives the pilot the flexibility to engage either a moving or a fixed target. MBDA won a BAE Systems Chairman’s Innovation Award in 2010 for the dual seeker system. It was one of only two gold award winners out of 4,000 nominations and Dual Mode Brimstone is currently being successfully used in combat operations by the RAF in Afghanistan and Libya. According to RAF Wing Commander Ian Gale, who was previously Officer Commanding 31 Squadron, “DMB is probably the best moving target weapon out there at the moment”.

Model manufacturer Recently, Deputy Prime Minister Nick Clegg and Business Secretary Vince Cable called for manufacturing companies to open their doors for a week and let the public look around. The idea is to dispel the common misconception of manufacturing as an industry consisting of tedious manual labour in dark and dirty Dickensian workhouses. While open access to the site for any old Tom, Dick or Harry might not be feasible for MBDA, given its line of work, the

Lostock site would fit Messrs. Clegg and Cable’s purpose perfectly, in aesthetic terms. This is largely down to the firm’s recent site-wide 5S programme – the latest in a long line of far reaching lean programmes which dates back to the early 1990s when MBDA became one

Key product developments 1957: Firestreak enters service with the RAF & Fleet Air Arm – “The first effective British Air to Air Weapon” 1971: Rapier enters service and after almost 35 years as the primary UK air defence system it is expected to continue serve in this role until 2020 2010 Dual Mode Brimstone rapidly developed and deployed in Afghanistan offering lethal “anti-insurgency” capability against moving and static targets with low collateral impact

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TBG Solutions M

odern defence systems with increasingly high value, low volume product ranges, face problematic defect detection procedures. Choosing an inspection facility creates further complications with minimal equipment utilisation caused by review of a small range of similar products. MBDA (UK), with a growing range of varied production units, requires defect inspection and the Generic Manufacturing Defect Inspection (GMDI) facility manufactured by TBG delivers repeatedly proven solutions. Using COTS hardware and software, TBG provide a core reusable hardware platform increasing fixture value while simultaneously maximising equipment utilisation. With our combined experience of varying industries, including Manufacturing and Defence, TBG designed

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and produced a system encompassing Interchangeable Test Adaptors (ITA). This approach allows fixtures or front-end harness interfaces to reliably connect with back-end hardware to provide defect. “MBDA (UK) utilise GMDI facilities supplied by TBG for manufacturing test of electronics circuit cards under regimes at ambient and temperature extremes. The Production facilities rely heavily on process controls during low number production build cycles and the GMDI is now firmly part of that process, proving to be a reliable asset in today’s environment; furthermore, helping to avoid the cost of faulty product discovered at higher stages of assembly.” Peter Freestone, Principal Engineer MBDA. Eliminating requirement for multiple assets with associated manufacture,

support and running costs, GMDI continually provides maximum value. Future products catered for with custom intelligent ITA’s increasing system utilisation with compatibility for products, past, present and future. For more information, please use the following details to contact us.

Published in association with: tbg solutions Tel: +44 (0) 1246 819100 Email: info@tbg-solutions.com Web: www.tbg-solutions.com/gmdi.aspx

Defence MBDA

Product chronology

of the first proponents of the Kawasaki Manufacturing System in the UK. Clean as a whistle throughout, the site resembles something more like a science laboratory than a traditional manufacturing base. Each area in the factory has been reorganised to achieve maximum space efficiency and each area is clearly designated and marked for an individual process. The engineers around the site adorn shirt and tie underneath their static-fee coats. The company’s lean activities have been centred on fast, flexible flow; inventory reduction; employee empowerment; improved operator skills breadth and flexibility and waste elimination, to achieve world class just-in-time production. All around the factory, flexible fixtures are used so that one item of work-in-progress can be quickly swapped for another and the machinery needed to work on it can be quickly and easily calibrated for the job in hand. For many processes, such as the cable production, standardised step-by-step engineering guides and shadow boards of the entire product assembly are used to ensure reproducibility. It also carries out rigorous self-certification of its products and processes for its own peace of mind that the very best standards of quality are adhered to. Dave Ward, head of manufacturing, operations management and technical

support, says, “We continually strive to improve, but one of our best efficiency breakthroughs has been the focus on waste elimination in all its forms, from the strategic value and use of industrial space to simply tidying the workbench. This is a vital cultural foundation for improved leanness and agility.” The same kind of attention is applied to supply chain management. The Lostock site received 9000 batches through goods-in last year from around 300 suppliers – it’s essential, therefore, that it carries out rigorous performance testing on its suppliers to ensure they are fit for purpose.

We are always sensitive to the need to demonstrate value for money for both the MoD and, of course, for the taxpayer. We understand and we know that key to achieving this is within a true open partnership with our customer Bernie Waldron MBE, MBDA UK Director of Manufacturing The company rates each of the components it sources as either ‘critical’, ‘key’ or ‘standard’ by weighing up the impact on the business of each component against the supply market complexity. This scoring system then determines the level of support and interaction MBDA needs to engage in with each supplier. It then rates each supplier into one of four categories: ‘Partner’ – to be formulated to deliver a specific MBDA need; ‘Preferred’ – “best in class” suppliers with whom MBDA should prefer to do business; ‘Conventional’ – those delivering an acceptable level of performance; and ‘Undesirable’ – to be excluded from future work where

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MBDA (UK) Ltd A partnered philosophy

ne Facility provides extensive facilities management & maintenance services to MBDA (UK) Ltd throughout their entire UK portfolio. MBDA are a world leader in missiles and missile systems & is a multi-national group with over 9,750 employees in France, United Kingdom, Italy, Germany and the USA. The contract was awarded in May 2006 & its scope includes the maintenance & project support for all Hard FM services intertwined with some Soft service requirement including the provision of specialist key staff working on long term client secondment. The excellent working relationship One Facility has established with MBDA

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has been created by listening to our customer and forming close working relationships with MBDA at different levels within both organisations, we have brought together all the essential elements of facilities management and support services to deliver the most effective solution. Through our experience across a wide variety of built environment disciplines, we are able to develop and deliver solutions that align with the customerâ€™s business needs and objectives, from solutions for single disciplines to total facilities management. Our success depends on our commitment to technical innovation and the constant development of skills

and techniques available to our teams. Through this approach we are able to bring genuine added value and benefits to MBDA, helping to secure high quality, long-term relationships.

Published in association with: ONE FACILITY LTD Tel: 01438 755541 Fax: 01438 753917 Web: www.onefacility.co.uk

Defence MBDA

Electronics manufacturing facility overview

possible. For the suppliers it wants – or needs – to continue working with, the company carries out quality assurance surveillance plans and works with the supplier to ensure items are optimally designed to feed in to the MBDA production systems. MBDA is also working with 15 suppliers as part of the Supply Chain for the 21st Century (SC21) aerospace standard and has helped two suppliers achieve the bronze award in the last 18 months.

A well oiled machine Another key element of MBDA’s performance strategy is to invest in the latest equipment in order to ensure that it remains at the top of its game. This is prevalent all the way throughout the business including the electronics department. The company has spent £150,000 on a new soldering machine from ERSA – part of the German Kurtz Group. The aerospace industry calls for a minimum 75% solder fill; the ERSA machine fills 100 per cent every time. The real innovation here, though, lays elsewhere. To ensure a printed circuit board is not compromised under the

heat of the soldering iron it needs to be gently warmed to around 130 degrees Celsius in preparation. Usually, a soldering machine passes a board through to a separate chamber where the board is moved on a two axis bracket around the soldering point. However, the ERSA machine is the first of its kind where the soldering nozzle moves, instead of the board. This creates enough space in the machine to install a localised heating system which can keep the board at the exact temperature which it entered at. This would not have been previously possible and, hence, some cooling of the boards would have occurred which left it susceptible to soldering defects. In fact, the root cause of 65% of the defects in electrical systems can be traced back to the stage where solder paste is applied to the board. To alleviate this problem, MBDA invested in a grid-lock holding system which grips the board to be populated securely and prevents solder paste deposition defects occurring. It aligns 0.15 mm thick stainless steel stencils on two axes instead of one. Further updates to the component placing machine mean that it can now place 6,000 items per hour and the change over time has been shortened from a day to two hours. “This is essential for us,” says head of sub-systems manufacturing, Ron White, “as often, when we’re making prototypes and demonstrator hardware, we will be looking to rapidly produce low numbers or even just one board type at a time.” As technologies evolve and products become increasingly complex, more and more components have to be accommodated on both sides of a modern PCB. One way the industry has become more space efficient is to change

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Collaborative Design Reliance Precision Limited is an independent, specialist engineering company, providing custom-built electro-mechanical and opto-mechanical sub-systems, together with an extensive range of standard components.

ur design and manufacturing capability is ideally suited for applications having critical requirements for accuracy, performance and reliability. We provide a unique engineering service, which combines design, development, testing, prototyping, manufacturing and assembly, all located at our UK facility. Early involvement in the design process, combined with technical skills and breadth of experience, has helped our customers secure the necessary technical performance, product quality and on-time delivery. We are skilled in the use of speciality materials, modified tooth forms and surface coatings to provide reliable geared mechanisms, achieving high power in compact packages. Specialism in long and short life

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gearing, coupled with predictable life, accuracy and stiffness testing, enables us to provide reliability even in the most demanding applications. We have been an approved supplier to MBDA and its predecessors for over 25 years, working on a variety of design and manufacturing programmes, each time creating a successful, collaborative team. â€œReliance has been a longstanding contributor to MBDAâ€™s business. In effect

they work as an extension to our design team and have supported us consistently with their responsiveness, adaptability and commitment. Reliance fulfils a valuable role between design authority and manufacturer; we would call it niche industrialisation and it is an important part of helping us bring our products to market on time.â€? Sav Melis, Procurement Director Commodities, MBDA UK Limited

Published in association with: RELIANCE PRECISION LTD Tel: +44 (0) 1484 601000 Email: engineering@reliance.co.uk Web: www.reliance.co.uk

Defence MBDA

component interfaces from side “leadouts” to leadless devices (e.g. BGAs) with connections underneath the chip body. This, in conjunction with an increasing number of board layers and the attainment of IPC class 3 industry standards has led to MBDA investing a further £120,000 in an X-Ray facility in order to achieve full board internal inspection capability. However, as well as these state of the art equipments, MBDA has to keep some machinery running which has been in place for over 30 years in order to service its back catalogue of products. This includes the System 8 test equipment which performs functional testing of sub-systems on the Sea Skua missile. “We need to pay special attention to this equipment to ensure its continuity of operation,” says Bernie Waldron. “The technology is old now and, given where we are in the product lifecycle, we always need to ensure we employ the most cost effective maintenance solution, which may mean we need to keep it continuously in a state of readiness.” Elsewhere, the site also features a full complement of environmental testing facilities, which are deployed at three separate stages of a test regime designed to reveal and eliminate nascent design and latent manufacturing faults and ensure product reliability. First the electronics boards are subjected to thermal stress. There is then a separate testing facility where the completed subsystems containing the same boards – seekers, for example – are subjected to hot and cold temperatures combined with a range of vibrational stress. This uniquely tests the part, not only at the temperature extremes but also during the transition “ramp” in between. Finally, the complete missile is placed in a simulation bay which includes targeting facilities, tricking the missile into thinking that it is on a real operational sortie to ensure that it reacts representatively whilst exposed to a similar range of extreme and changing environmental factors. As the product design matures, and faults become fewer, this rigorous test regime can be tempered as appropriate. Throughout – and as you would expect – MBDA is committed to providing value for money for its customer; essentially, this is the tax payer. An example of this is the new final test facility for the Meteor missile. Instead of procuring a whole

new system at a cost of around half a million pounds, MBDA adapted one of its existing testing bays for the ASRAAM (Advanced Short-Range Air-to-Air Missile) missile to generate an overall saving of over £100,000. “We are always sensitive to the need to demonstrate value for money for both the MoD and, of course, for the taxpayer. We understand and we know that key to achieving this is within a true open partnership with our customer”, says Bernie.

The apprentice programme is tailored around the individual and our whole career development as well as for the job in hand. As long as you can justify the need then the company will support you in your application for any serious development or improvement aim John Gregory, fourth year apprentice

Shooting stars The average worker’s length of service at the Lostock site is 25 years – this should tell you a thing or two about the way the company treats its employees. The company is committed to personal and professional development and has made it a priority to train its employees to accredited levels in multiple functions across the business in order to utilise them as needed. Each operator has now been issued a certificate which lists their approved skills and competencies so that the right person can be selected for any particular task and the system can quickly verify that that person was qualified to carry out the work. It also promotes adult apprenticeships to encourage employees to extend their skill base and has three on the books at the moment, one of whom has worked for the company for 20 years already. The company engenders a culture of process ownership, both in continuous improvement and innovation, and many of the process and machinery improvements are a result of employee recommendations to improve the processes they are responsible for. The company encourages innovation and improvement through a structured awards scheme and rewards the resultant new ideas both with appropriate remuneration and at national and international celebration events. It also rewards exceptional workplace performance with a bonus incentivised performance management system. Bill Bigley is the UK manufacturing strategy manager. “The best thing about working for MBDA (UK) manufacturing is the learning process,” he says. “It’s a tremendous university – every day is different with different challenges and opportunities. We don’t always get it right, but we continuously try to learn from all our experiences, good and bad, to make sure we do it better next time.” Apprenticeship programmes are something dear to Bernie Waldron’s heart. He was, in fact, the company’s last 15 year old apprentice, having begun as an Electrical Craft Apprentice in 1971. Perhaps that’s why MBDA has created a programme for its 61 apprentices which, in a speech to

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Alliance Learning A

lliance Learning based in Bolton is one of largest independent training providers in the North West and has over forty years experience in the training industry. Our staff have many years experience in their relevant training areas and have a friendly professional approach to training. Here at Alliance Learning we offer the very highest quality Apprenticeships and Training Courses. We also have a Learndirect Centre based in Leigh offering a wide range of e-learning courses. In an increasingly competitive environment, successful businesses know that, whatever their size, to continue thriving they must develop and maintain a

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skilled and motivated workforce. You need staff with the right skills to suit your particular business requirements, and the inspiration to provide a real and relevant contribution. Designed by employers for employers, an Apprenticeship is a work based training programme, through this programme you can train both your existing staff and

any new employees that you are thinking of recruiting. A free Apprenticeship recruitment service is available to all businesses; this will save you both time and money. All applicants provided are screened for literacy and numeracy and are interviewed by one of our qualified assessors to determine their suitability prior to being sent to any business.

For more information on any of our services please contact us on: Tel: 01204 696744 Email: info@alliancelearning.com Web: www.alliancelearning.com Published in association with: Alliance Learning

Defence MBDA

the House of Commons with Iain Wright MP, the former under secretary of state for 14-19 Reform and Apprenticeships, Bolton MP Julie Hilling described as “truly fantastic”. The company employs engineering and business apprentices on four year programmes based on three pillars of development: professional, personal, and technical. The apprentices complete a variety of NVQs throughout their four years culminating in either a HND or BA honours degree. On reaching the final year of the programme, as well as having gained IMechE (Institution of Mechanical Engineers) and/or IET (Institution of Engineering and Technology) accreditation, each apprentice is placed in a role in which they are expected to continue once their apprenticeship has ended thereby maximising their opportunity to add real value to the company as early as possible in their careers. MBDA also encourages their development through entry into such prestigious competitions as the UK and World Skills competitions for apprentices and has had many significant successes in both.

Throughout the programme the apprentices carry out placements for up to nine months at a time within different departments of the business. This offers the opportunity for the apprentices to work across the different UK sites and even abroad – John Gregory, a fourth year engineering apprentice, recently returned from a placement alongside Fireshadow at an RAF base in Cyprus – and the company holds regular training weeks through its MBDA Technical Institute based at Stevenage and other MBDA sites in Italy, Germany and France. Here, the apprentices are instructed in the end-to-end process of missile design and manufacture from first principles. On the personal side, each apprentice is given £100 per year through the Personal & Assisted Study Scheme (PASS) to spend on any element of personal development of their choice – e.g. music exams or driving lessons. Each apprentice is assigned an existing employee from their department to act as a ‘buddy’ when they join the company and they attend regular one-on-one meetings with Bernie Waldron and his senior management team to report on their progress, register any concerns and suggest any improvements from their ongoing experiences. Throughout the company there are many individuals, Bernie included, that perform extra curricular responsibilities such as governors for local schools. This embeds strong links in the community and offers the opportunity for apprentices to visit and inform school children what a career in an engineering company such as MBDA is really like. The apprentices are given ambassadorial training in order to hold workshops and mock interviews for the prospective next generation. They are

Missile test facility

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Turners Cleaning and Support Services S

ince being formed in 1969 we have become one of the most respected companies in our industry. We are well known for our commitment to improving the way the industry is perceived and we are proud of our ISO accreditations for Quality, Environmental and Health and Safety Management. We are also registered with a number of SSIP members in recognition of our commitment to health and safety. We have invested heavily in staff and management training over the past four years using both BICSc and NVQ routes, and in recognition of our commitment we won the Hertfordshire Business of the Year Award and were accredited to the prestigious Investors in People standard in December 2009. We have over 30 managers and 2,500 staff managed from our three offices in Stevenage, Stourbridge and Hammersmith.

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We offer a range of cleaning services including daily cleaning, deep cleaning, floor work, carpets and window cleaning and work for vastly different types of business including education, Local Authority, manufacturing, retail, Blue Chip and private enterprises. We have internal and external auditing procedures to ensure quality of service. We also supply paper products and consumables to many of our clients

directly from our Janitorial warehouse in Stevenage. As part of our partnering role with MBDA throughout the country we have provided a full facilities management presence for over 25 years. Whilst providing a full cleaning service we also provide a range of soft services; hygiene, pest control, grounds maintenance, laundry, plant displays and waste management.

Published in association with: Turners Cleaning and Support Services Leyden Road Stevenage Hertfordshire SG1 2BP

Tel: 01438 352802 Email: sales@turnerscleaning.co.uk Web: www.turnerscleaning.co.uk

Defence MBDA

Dual Mode Brimstone under pre-flight checks in Iraq

also responsible for orchestrating and overseeing work experience placements and many of the school children that partake often end up becoming apprentices at the company themselves. John Gregory, a fourth year apprentice, was the UK Skills’ electronics apprentice of the year in 2009 and has also won awards from Wigan College for ‘Innovation’ and ‘Best Student’. He says the secondary aspects of the apprenticeship e.g. the ambassadorial role are extremely useful to him in building professional confidence and providing him with a varied skill set. “The apprentice programme is tailored around the individual and our whole career development as well as for the job in hand. As long as you can justify the need then the company will support you in your application for any serious development or improvement aim. The opportunities are endless.” Beth Sherborne, a third year business apprentice and winner of the Alliance Learning Award, adds: “It’s such a community based site which makes it a great place to work. People here will always give you a lot of time and they’re all happy to help you. And the ambassadorial role gives us an

Dual Mode Brimstone is probably the best moving target weapon out there at the moment RAF Wing Commander Ian Gale opportunity to tell girls that there are now equal opportunities for a career within a traditionally male dominated industry.” In fact, MBDA has more female apprentices on its books than male and many are working in the engineering functions as well in their supply chain and procurement departments.

Onwards and upwards Overall, a decade of continual process improvements since the formation of MBDA has seen the company emerge as one of the UK’s truly world class manufacturers. Lead times have been significantly reduced by a factor of ten with a consequential beneficial impact on inventory management and stockturns. Coupled with its focus on schedule adherence, cost and quality management MBDA continually strives to demonstrate its improved “added value”. The future challenges which MBDA faces are already being addressed in Bernie Waldron’s team as they strive to become ever more flexible, agile and responsive in every aspect of the resources they call upon to deliver their business. “The facilities, equipments and, perhaps most importantly, the people and their capabilities need to be continually challenged and extended to ensure that the strategic balance between responsive delivery of an increasingly complex weapons portfolio and optimised whole life costs and value for money is maintained,” says Waldron. Where the future is concerned, MBDA looks set to remain firmly on the offensive.

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G2 Environmental Services SERVICES Our services are available throughout Ireland, Northern Ireland and the rest of the UK and include the following: SPECIALISED SERVICES Asbestos Surveys - Removal - Disposal Drain Clearing Reach and Wash Window System Hygienic Deep Cleans e.g. Kitchens, Operating Theatres etc Environmental Fire & Flood Cleans Contract Property Maintenance

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Private and Industrial Painting Services

Graffiti Removal Rubbish Clears

Facilities management

Carpet Cleaning

Out of Hours Emergency Call â€“Out Service

Window Cleaning

INDUSTRIAL OPERATIONS Builders Cleans & Pre Hand Over Cleaning

High Level Cleaning Gutter Repairs and Cleaning Pressure Washing Plus Moss and Algae Treatment

Published in association with: g2 environmental services ltd Tel: 028 9061 6122 Email: carrie@g2es.com Web: www.g2environmentalservices.co.uk

Automotive Michelin Tyres

Modernism

in motion Michelin makes way for innovation

Michelin Tyre Company, the UK arm of the French tyre brand, began its journey in 1905. Just over 60 years later the company opened its 45 hectare site in Ballymena, Northern Ireland. With over 1,000 staff and a yearly production of around 1.2 million truck and bus tyres, the plant’s newest site director Wilton Crawford is looking to continue the proud Michelin heritage as a company built on innovation. Tim Brown investigates

Towards

the end of the 19th century a cyclist, whose pneumatic tyre needed repair, wheeled his bicycle up to the doors of the rubber factory of Édouard and André Michelin. Due to the tyre being glued to the rim, the brothers spent three hours removing and repairing it. Unfortunately, their attempt to repair the tyre failed on it first test but the trial and error unveiled a tangible concept and the duo went on to develop a pneumatic tyre which did not need to be glued. The brother’s tenacity for innovation not only revolutionised the tyre industry but today underpins not only the work and business ethic of Michelin but also its newest advertising slogan – ‘The right tyre changes everything’. As a global entity, Michelin is constantly striving for continued innovation in its processes,

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Precision in Engineering and Delivery Woolf Engineering have the experience skill and facilities to deliver all aspects of precision machining and fabrication supplying leading names in several industry sectors including Automotive and Power Generation.

oolf Engineering operates from a 25,000 sq ft premises in Ballymena, Northern Ireland which is ideally situated close to the motorway network. Experienced in all aspects of precision engineering and fabrication we work in both hard and soft metals including mild steel, stainless steel and aluminium. At Woolf Engineering have a policy of continuous improvement and our facilities and services include CNC machining capacity, metal cutting using plasma and oxy fuel profile cutting equipment, folding, bending and rolling.

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We are experienced in producing component sub assemblies using a combination of parts manufactured in house along with items outsourced to customers own specification .We work closely with major manufacturing companies such as Michelin to deliver complete projects ready to install into individual machines or production lines. With rigorous quality control and ISO 9001 accreditation we can carry out inspection labelling and packing on behalf of our customers. This combined with our delivery procedures ensure all units are delivered on time every time.

We also offer an on-site service supplying skilled labour and equipment complemented with full back up of our work shop facilities. With over 50 years engineering experience, Woolf Engineering is well placed and ready to fulfil your sub contract engineering requirements.

Published in association with: Woolf Engineering Tel: 028 2564 7938 028 2564 1445 Fax: 028 2564 5102 Web: www.woolfengineering.com

Automotive Michelin Tyres

products and people. The constant improvements in its products as well as the introduction of its Red and Green travel guides, its roadmaps and the Michelin stars that the Red Guide awards to restaurants are typical of this strategically talented company. In January last year, the company appointed US born Wilton Crawford to succeed Graham Whitehurst as site director at the Ballymena plant. With a vast experience at five different Michelin sites, Walton shares with his predecessors the determination for improvement.

As a truck and bus tyre manufacturer, Michelin has about 18 sites around the world with Michelin Ballymena being about fifth largest in terms of output. Situated 30 miles northwest of Belfast, the Michelin Ballymena factory supplies its products to four zones: south-east Asia, South America, Europe and US. Europe is the largest market accounting for 52% of the output while just over a third is exported to the US. However, those areas of concentration may alter in the years to come with South America and South-East Asia having experienced higher levels of growth and economic recovery than their western counterparts. As far as competition goes, Michelin is the largest tyre manufacturer in the UK with more tyre manufacturing capacity and employees. According to Crawford, that gives the UK Michelin group, as a whole, a real strength in its

Michelin Ballymena at a glance Employees

1,000

History

Site was built in 1969

Products

Tyres for trucks, buses and coaches

Output (2010)

1.2 million tyres

Turnover

ÂŁ250m

Points of interest

The Ballymena site is investing in two wind turbines in 2012 The site is expecting orders to increase by about 5-6% this year The site has career succession planning program for all monthly paid staff

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Stanley Vickers Ltd S

tanley Vickers Ltd, founded in 1947 and based in Middlesbrough, specialises in the manufacture and refurbishment of screws and barrels for the plastics, rubber and food industries. Stanley Vickers Ltd have high performance CNC milling machines which are fully integrated into the companyâ€™s CAD/CAM design system to allow the precision manufacture of screws from 20mm to 370mm in diameter and up to 8 metres in length. The high level of care taken during manufacture ensures superior quality, accuracy and efficiency is maintained for an all round reliable performance alongside quick and efficient service and delivery timescales. Screws may also be refurbished at SVL to enable them to perform as new. SVL have developed some outstanding hardfacing materials such as SVL 1215

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bores ranging from 18mm to 275mm. Longer barrels may be manufactured in multiple sections if required. High precision honing machines enable barrels to be refurbished for use in extrusion, injection and blow moulding processes. Refurbished barrels can be honed oversize and re-nitrided or short sleeved in bi-metal or nitride steel. Stanley Vickers Ltd is committed to providing a quality sales support service and has secured BS EN ISO 9001 quality accreditation in this field. which can increase the screw wearlife by up to 200%. The main advantage of these materials is that screws may be refurbished many times as the hardfacing is welded rather than sprayed. Single and twin barrels may be manufactured at SVL in a single piece with a length of up to 6 metres and

Published in association with: STANLEY VICKERS LIMITED Tel: 01642 247353 / 248723 Email: info@sv-ltd.co.uk Web: www.sv-ltd.co.uk

Automotive Michelin Tyres

home market. However, as much of the product produced at the Ballymena site is destined for an international recipient, he says that capability of the site’s equipment to support tyre manufacture for a number of international zones provides a great benefit. The total turnover for the Ballymena site is about £250m, although Crawford says he expects to gain about 5-6% this year. This, he says, is a reflection of a rebound in the market as well as the expectation of a net growth in the global automotive market. “The global financial crisis was particularly challenging in 2008 and 2009 but we have seen growth in the marketplace since then. We see strong export demand coming from the developing nations for the next couple of years including Asia and South America. This is despite new Michelin factories being built in those regions due to the sheer quantities likely to be required in those areas. We are anticipating upwards of 10% growth in those regions.” Aside from the improving market, Crawford is also planning to continue to improve the Ballymena site by focusing his efforts around the company’s main performance metrics. Also known as The Michelin Manufacturing Way, the metrics include: productivity improvement year-on-year, cost improvement, safety performance, and product and service quality. Indeed, Crawford hopes to make a considerable impact on the Michelin group’s aim of achieving a 6% productivity improvement year over year.

Geared towards productivity The team at Ballymena have engaged a number of automation improvements over the last few years and Crawford says he expects further improvements in order to satisfy the vision and strategy the company has developed for the site. However, whilst Crawford admits that it will take a healthy investment to support those goals, he says that the corporate vision is very supportive. “As a company we are investing in both new sites, particularly in developing markets and also in order to enhance existing sites so as to achieve productivity improvements year over year,” he says. “That is our real challenge to ensure we maintain competitiveness. We are spending

around £3.5m per year which encompasses safety improvements we make onsite for our employees and will also include the modernisation of some of the machinery.” Whilst the drive towards investment has been focused on improving productivity, Crawford concedes that many of the innovations in the manufacturing plant have actually been stimulated by innovations in the products. “We are really changing a lot of the product design in terms of getting

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Automotive Michelin Tyres

better performance to the tyres of the future. Some of that does bring changes in equipment in order to make those products which have resulted in quite a few investments in terms of our tyre assembly and our preparation areas.” In addition to the investment in machinery at Ballymena there has been a consistent investment in people. This focus on the development of all staff at the site has clearly impressed Crawford since he took over 15 months ago. “Our people are very well qualified and have a lot of training and a lot experience. A lot of team members on this site have been here for 30 or more years and some have even surpassed 40 years. That kind of experience, which extends right back to when the factory was first built, is not something that can be easily replaced and makes us really competitive globally in terms of our knowledge base, technical know-how and product knowledge.”

With average employee attrition for the site historically hovering at just over two per cent, it isn’t any wonder that the site has no issue with skill retention. The reason for the development of a career employee culture at Michelin Ballymena is the result of many factors, not least of which is the prestige of the company. In addition, the loyalty of the staff is reciprocated and the site has developed a career succession planning program for all monthly paid staff and also helps to develop the more junior members of the team. “We have the opportunities and the ability for staff to build new competencies and skills,” says Crawford. “Many of our leaders in the factory started their career at the bottom level and have worked their way through and built up their credentials along the way. We are thankful that we don’t have a problem with attrition and we feel that this is in part due to the combination of our values, spirit, engagement and focus on a long term vision. “The level of training and teaching that we put into our people here and the focus on building that competency in the job function is very strong in the UK. We have a strong history of really investing in the staff to learn the scope and details of their job. Developing a strong responsibility with individual jobs is probably the biggest strength I’ve seen that we can leverage here and which could be used

Performance metrics of the Michelin Manufacturing Way include: productivity improvement year-on-year, cost improvement, safety performance, and product and service quality. Wilton Crawford plans to assist Michelin group’s aim of achieving 6% productivity improvement yearon-year.

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ESB Independent Energy re-branding as ESBIE Electric Ireland, Ireland has a new energy!

rom April 2011 ESB Independent Energy will be known as ESBIE Electric Ireland. While the brand name is changing our core long-standing principles of support for the Northern Ireland business sector is as strong as ever.

Energy Audit ESBIE Electric Ireland offers an extensive range of energy audits that helps businesses identify opportunities for reducing energy costs.

Managing Director Susan Kinane is clear on her commitment to Northern Ireland.

Company / Staff Awareness Directly involving employees and making them an integral part of an energy strategy will help drive efficiency. ESBIE Electric Ireland has experience in delivering energy awareness presentations and information campaigns which educate employees about achieving energy goals and the role they can play.

“In the current economic climate companies ranging from large multinational organisations to local Small and Medium Enterprises (SME’s) are seeking to take control of their energy consumption. As part of our offering ESBIE Electric Ireland works closely with businesses to identify opportunities to reduce costs. This starts by providing tailored products that suit our customers varying needs. In addition we seek to add further value through providing a number of Energy Consulting Services to assist and empower customers to maximise the efficiency of their energy usage. Our commitment does not stop there. We continue to support local communities through a number of sponsorship initiatives that focus on the broader community of Northern Ireland. We are very proud of our long established relationship with Business in the Community in sponsoring their “Connections” programme which helps start-up and fledgling SME’s”

Beyond supporting companies to fulfil their business efficiency potential ESBIE Electric Ireland also supports the Northern Ireland business sector through the following; Relationship Building / Tailored Energy Solutions To build and maintain beneficial relationships ESBIE Electric Ireland assigns a dedicated Customer Relations Manager to each account. Our CRM’s work closely with business customers to gain an understanding of their energy needs and it is through such close proximity that we can comprehend our client’s specific energy requirements and provide bespoke tailored energy solutions.

Renewable Energy Offering ESBIE Electric Ireland is proud to be at the forefront of renewable energy generation by providing customers with green energy through a range of sources. ESBIE Electric Ireland already boasts a large portfolio of windfarms. An additional windfarm is being commissioned at the end of 2011, and a further one in 2012. Through our partnership with Marine Current Turbines we provide renewable tidal energy via the SeaGen turbine system in Strangford Lough. In 2005 we also invested over £200m in establishing the Coolkeeragh power plant in the North West. This is one of the most efficient power stations in Ireland and the 400MW plant generates electricity from gas delivered from the North West gas pipeline. “So while the brand name may be changing, the legacy of ESB Independent Energy’s long-standing support for Northern Ireland’s business, renewable sector and community investment will be maintained under our new name, ESBIE Electric Ireland” says Susan Kinane. To see how ESB Electric Ireland can help your business visit www.esbieelectricireland.com.

Published in association with: ESBie ELECTRIC IRELAND Tel: 0800 056 9914 Email: info@esbieelectricireland.ie Web: www.esbieelectricireland.com

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Automotive Michelin Tyres

more effectively in some of our other zones. Also our focus on our safety performance is first class and we have achieved an outstanding safety record.”

Quality equals customers The manufacturing philosophy, Michelin Manufacturing Way, combined with the company’s quality management systems are used at every site around the world. However, according to Crawford, the UK and Europe have a particularly strong history of robust and proven quality performance. In fact, as an exemplar of best practice, Michelin employees from other parts of the world frequently attend the Ballymena site to observe the operation and to assist to spread the site’s highly revered quality procedures. Due to increases in raw material prices, some Michelin products have increased in price over the last year. “However,” says Crawford, “our customers are willing to pay for that for the quality, durability, performance and safety which go along with our products for trucks, lorries, coaches and busses. Brand equity and the image of our products and services is what we sell to our customers. We see that as having been an ongoing strength for decades and will continue to pave the way for our products and new launches. It is really key to our success.” He says that part of that customer loyalty is driven through the close interaction and feedback mechanisms that company has developed with its clients and the transport industry. “We have a lot of direct interaction with our customers and we understand that a truck tyre in Europe might have different requirements than a tyre that might go to India where the road conditions are much different. Terrain, weather and load are all key conditions which play into the design of the tyre. The commercial directors here in the UK as well as in France also work very closely with the industry trade bodies. In addition, our field engineers collect a lot of field data primarily from our fleet customers. This is supplied back into the product design teams in France, US and Asia.

Environment, energy and economics The cost of energy is a particular concern at the Ballymena site, says Crawford, particularly when compared

to other sites in the US. According to him, at other sites where he has worked, energy constitutes approximately eight per cent of the total budget whereas in Ballymena it is closer to 16%. “When I got here it really opened my eyes to the proportion that energy takes within the operational budget. So in effect, the cost of energy is about double compared to our sister factories. That is really putting us at a competitive disadvantage and it is becoming more and more challenging to figure out how we overcome that issue.” On the flipside, he says, and partly because of energy costs, the UK has been very innovative in looking at green sources of energy or renewable energy. “We have a wind turbine project here and we should have the first turbine up and running in the first part of 2012 with the second one

As a company we are investing in both new sites, particularly in developing markets and also in order to improve existing sites Wilton Crawford , Site Director, Michelin Ballymena

following soon after. Those wind turbines will help offset about 50% of our energy demands which is very significant. The turbines will be owned by a third party, Ecotricity, and we will purchase energy from them at a lower rate. We already have two turbines at our Dundee factory in Scotland and that site has seen some excellent benefits. Due to the need to focus on energy efficiency, I would say that the UK has done an extremely good job of working on developing renewable sources of energy.” Crawford says the site has also engaged the services of a full time energy manager and through his leadership and staff supporting of his initiatives the Ballymena plant has cut its energy consumption by about 24% over the last five years. “We continue to go down that path and we are sharing that with all the other factories around the world and we are seen as one of the leading Michelin factories in terms of our innovations in the reduction of energy consumption.”

Continuing the tradition Michelin not only prides itself on its product and process innovations but has always consistently demonstrated a respect for social responsibility and for the local communities in which it operates. The Ballymena site has supported various local initiatives in its 40-year history in the area and has forged strong links with the local community, especially through its Michelin Development arm, helping local businesses succeed with ‘free’ expertise and low cost loans. This community focus is not simply altruistic but also makes good business sense so as to keep the local regions prosperous and is simply another example of the intrinsically innovative nature of Michelin. Such a forward thinking focus is undoubtedly what has made Michelin so successful. At Michelin Ballymena, future prosperity will continue to be guided by the Michelin Manufacturing Way while a constant drive for improvement is reciprocated through careful and structured investment.

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Spectra XTR power wheelchair is now available with the Leckey KIT modular seating system

The

wheel

deal

Less than a year after consolidating two of its production facilities, Edward Machin talks to Chris Bevan, general manager of mobility products manufacturer Invacare UK, about building Lean houses — one brick at a time.

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With

global headquarters in Elyria, Ohio, the Invacare Corporation is an undisputable global leader in the $6bn home medical products industry. Central to maintaining such prominence, and located 3,000 miles across the Atlantic, in Pencoed, is Invacare UK — the first European site the corporation purchased, more than two decades ago. “We’ve actually been manufacturing wheelchairs in South Wales for well over half a century,” says Chris Bevan, Invacare UK’s general manager. “Firstly as Zimmer Orthopedic, which then became Carters J&A in the late 1970s; Invacare acquired the company in 1988. In the UK we can sell any and all of the Group’s products: something could be made in the USA, France or Germany, but it will be part of our product portfolio at Pencoed.” After a European consolidation exercise in 2006, the volume of both powered and manual wheelchairs made by Invacare UK decreased. Bevan takes up the story: “The parent company decided to install two European Centres of Excellence: one for manual wheelchairs (Sweden) and one

Mobility products Invacare

for powered (Germany). It left us largely with products that we only sell into the UK market, so it didn’t make sense to set up continental supply chains.” All was not lost, however. Invacare acquired MSS, a manufacturer of wheelchair cushions and bed mattresses, previously based in Treforest and “with the wheelchair side of the business based in Bridgend, and given Invacare’s strategy of continual growth, it simply made sense to base everybody at the one facility.” On the pressure area care side of the business, Pencoed is the Centre of Excellence for the Invacare world. The UK is the only European site that manufactures such products and, accordingly, it distributes a wide range of both pressure reducing mattresses and cushions to the organisation’s global sites. Invacare ships to order approximately £6m per month, of which a fifth is traced to the company’s pressure area care products which when added with in house wheelchair production amounts to 40% of the daily shipping figure; the remaining percentage is distribution of product manufactured at Invacare’s other sites around the globe. Indeed, the latter was one of Bevan’s greatest challenges in merging the two plants. “I think perhaps we underestimated the logistics in shifting the factory’s warehouse and distribution operation. After the huge success of the manufacturing move from Treforest, which was thought to be the more difficult part of the merge, I simply expected to be able to pick up the warehouse and move it to new premises. Given that we were so busy due to the company’s continued growth, this certainly proved to be a much bigger challenge than expected.”

we went from Kanban to one piece continuous flow in little under five years.” Things were not always so for all products. “When we acquired the plant at Treforest, work was done in large batches, with queuing, silos — you name it.” By merging the processes Invacare used in wheelchair manufacturing, things improved rapidly. Lead times in mattress manufacturing reduced from 28 days to five, with on time delivery performance increased from 10 per cent to 100. “Very seldom we fall off the one hundred per cent mark, so that’s a nice improving picture, but it’s not come without its hurdles,” says Bevan. In order to maximise such growth, Invacare UK has implemented an organisation-wide 5S programme, of which value stream mapping exercises remain an ongoing — and critical — component. “Before 2008 we were shipping £50,000 worth of spare lines per day; a spares planner was charged solely with ascertaining how many lines we could dispatch in zero to two days,” says Bevan. “That was another challenge: if you order on Monday then it’s delivered to the customer by the Wednesday. Equally, if Pencoed doesn’t hold something in stock we’ll have it ordered from Europe in double quick time. Because purchase and sales orders have been tied, nothing sits on the floor gathering dust; it’s booked in, the guys can immediately see the sales order and the part is shipped out as soon as it arrives. This is a relatively new initiative for us, but one that is proving revolutionary to the way we work.”

Leading on lead times “We build to order, and therefore hold very few manufactured products in stock. Everything Invacare UK makes is done with a maximum lead time of five days: cushions in under two, and wheelchairs and mattresses in under five, with further improvements just around the corner.” This ultra efficient approach to manufacture can be traced to 1993, and the input of Eric Michel, General Manager of the Invacare French Operation. “Why hold superfluous inventory, they said, so

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Talk is chip

Roberto Priolo and Tim Brown speak to SPTS and find out that, in the microelectronics industry, attention to the smallest level of detail is absolutely vital in the production process.

Providing

assistance to facilitate the mass production of consumer technology products, SPP Process Technology Systems (SPTS) is at the forefront of high tech manufacturing. A subsidiary of Japanese company Sumitomo Precision Products, the firm manufactures semiconductor wafer processing equipment used in the fabrication of a wide range of microelectronic devices.

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The systems developed by SPTS use gases which are excited to form a ‘plasma’ which etches or deposits materials to create microscopic structures on a silicon wafer. These structures are then used as component parts of other products such as airbag sensors, or flash memory devices. SPTS technology is used by a number of different industries including: microelectronic mechanical systems (MEMS); Light Emitting Diodes (LEDs); advanced packaging; and high speed electronics. The evolution of the company can be traced back to the 1960’s, and a south west based UK technology company called Electrotech. Having undergone a number of branding transformations since then, its more recent history is almost as complex as the products it makes. In the 1980’s Electrotech had a research equipment arm called Surface Research Systems (SRS, renamed Surface Technology Systems, STS in 1990. In 1995 STS was sold to its Japanese distributor, Sumitomo Precision Products (SPP). In parallel, Electrotech was acquired by a US company and became Trikon Technologies and then through another acquisition, became Aviza Technology Incorporated in 2005. Finally, after acquiring some of the business units of Aviza, SPP merged it with STS, creating SPP Process Technology Systems — or SPTS as it is known today — 16 months ago.

Microelectronics SPTS

Trade and trends Only 5% of what SPTS produces is destined for UK domestic use. David Butler, vice president of marketing, explains: “If you consider the companies in the microchip market in the UK, the majority don’t actually make chips, they design them. There are a few that still manufacture in the UK, and a number of those rely on us for their equipment. In terms of sales however, Asia is our number one market with more than 40% of our business attributable to that region, mainly to Taiwan, but also Singapore, Malaysia, Korea and China. Another 35% goes to big European markets like Germany, Italy and France; the remainder is exported to America.” The strategy of the company is to focus on high growth emerging markets (such as MEMS, LEDs and Advanced Packaging) and to create stable longterm partnerships with customers. “This is a fast-changing market, because it is linked to the consumer market and is therefore exposed to consumer electronics trends,” explains Butler. He says that it is crucial for customers in the microtechnology industry to receive constant support in their operations. “Take micro gyroscopes which are now present in virtually all smart phones and tablet PCs, those are the devices which recognise how your phone is orientated. In 2009, no-one used any gyroscopes. This year 26 million will be consumed by these consumer devices. So from nowhere, there are suddenly millions of them. If you make gyroscopes and aren’t ready for something like that, you won’t catch up. If you buy the wrong equipment, you may never recover.” Some of the SPTS competitors are in Europe and Asia, but the biggest ones are in the United States at the moment and include companies like Applied Materials and Lam Research. According to Butler, SPTS has a carefully calibrated approach to a number of target markets in which the company can not only perform strongly but where it will also be likely to develop its operations.

MEMS and LEDs The 270-strong workforce at the company’s manufacturing plant in Newport, Wales, manufactures a large range of products. One SPTS offering is machinery for use in the production of Micro ElectroMechanical Systems (MEMS). This type of technology is found

everywhere in modern consumer technology from phones to navigation systems, from health monitors to gaming. MEMS are used by companies such as Bosch, Infineon and ST Microelectronics in the manufacturing of their end products. Products for the MEMS market include: pressure sensors for tyres; gyroscopes and accelerometers for airbag sensors, smart phones and even the Nintendo Wii; optical switches; and devices for the biomedical applications. Butler says: “MEMS appear in everything we do. It’s a massive market. In 2009 sales of these devices were $6.5bn, they’ll grow to $16bn in 2015. In our application market, we are the number one equipment supplier to the companies that make MEMS.”

This is a fast-changing market, because it is linked to the consumer market and is therefore exposed to consumer electronic trends David Butler, Vice President, Marketing, SPTS

With the number of smart phones produced every year set to grow by hundreds of millions, the demand for gyroscopes will increase steadily. Another industry SPTS sells technology to is LEDs, for products such as: signs and signals; automotive lights; industrial and domestic lighting; and LED TVs. Butler adds: “That’s an emerging market for us and has grown into a significant part of our business very quickly.”

The basis of a complex process Wafer processing is very complex. It represents the basis of the fabrication of silicon chips in a sequence of multiple steps, during which electronic circuits are gradually created on a wafer made of pure semiconducting material (usually silicon). Chips are created on a regular and flat silicon surface, in a process broadly entailing four steps: deposition; removal; patterning; and alteration of electrical properties. The UK division of SPTS specialises in the manufacture of equipment used in the first two categories. Deposition is a process through which material is grown, coated or in

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Haven Engineering Services Established in 1995 and based in Cwmbran South Wales, Haven Engineering Services Ltd are specialists in Facilities & Energy Management.

ur experience and enviable reputation for attention to quality of service and flexibility, in line with our commitment to deliver projects on time and within budget, are key ingredients to our success, with an increasing portfolio of the world’s leading companies. One of our most longstanding relationships is with SPTS, where we have undertaken a full range of facilities management and maintenance projects at their Newport Site for over 15 years. In addition to be being able to offer a full range of facilities management services to businesses, we have now been appointed to work alongside powerPerfector, the UK’s market leading Voltage Power Optimisation (VPO) system, as a distribution partner for Wales and South West England to bring the advantages of Voltage Power Optimisation

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(VPO) to a wider market. Voltage Power Optimisation (VPO) achieves energy and carbon savings by optimising electrical power quality and by supplying voltage at a more efficient level. When fitted in a typical commercial building it cuts an average 13 per cent off the electricity bill instantly. We are an ISO9001:2008 registered company and members of the Electrical Contractors Association (ECA) and an

NICEIC Approved Contractor. As part of our continuous quest for improvement of services we are also CHAS Accredited – The Contractors Health and Safety Assessment Scheme and an approved SAFE Contractor. Our philosophy is simple; the company’s success can only be assessed by the level of client satisfaction, and measured through the repeat custom received in return.

Published in association with: Haven Engineering Services Ltd Tel: 01633 483160 Email: enquiries@haven-eng.co.uk Web: www.haven-eng.co.uk

Microelectronics SPTS

general transferred onto a wafer. Physical vapour deposition and chemical vapour deposition, along with etching (the removal step), are the main focus of products made by SPTS. The company’s mission is to become a market leader in the supply of equipment performing those actions. “Our machines will put down metal to make conduction paths or insulators to prevent a connection from shorting out, and then etch those same materials to create circuits, or produce micro electromechanical structures in Si.” says Butler. “It is the same principle as exists in general electrical engineering but shrunk to a microscopic level.” Silicon is not the only substrate that SPTS machines can interact with. For companies in the high speed electronics market, for example, the ideal substrate is gallium arsenide. “Silicon is cheap and there’s a lot of it everywhere,” says Butler. “When you go to the beach, you stand on it. But it isn’t the fastest semiconductor in the world. If you want to make a very high speed semiconductor, you want to use compound materials such as gallium arsenide (GaAs) or indium phosphide (InP),” Butler explains. “GaAs was a niche material for years , excellent for high speed electronic devices, but because of its cost, only applicable to very specialised, small volume applications. However today, GaAs devices appear in the RF circuit of every single mobile phone; it’s a perfect example of an emerging market in which we excel.

R&D and lean Given the complex nature of the processes its equipment is deployed for, SPTS invests a lot in Research and Development, to keep abreast of customers’ needs. “Fifteen to 20 per cent of what we earn goes into R&D,” confirms Butler. “This allows us to constantly improve what we do, in terms of how fast we put down and etch materials, to keep customers happy and attract new ones.” The consumer market is unpredictable, and it’s tough for device makers to see the next killer application. However, Butler continues, “they need to be confident that the equipment they use is going to be able to complete the task they require now and in the future. Our customers value our experience and knowledge for production, resulting in high yields in the chip manufacturing process.” Early product development, the research and the feasibility assessment, is conducted on site, but SPTS also cooperates with customers, analyzing performance of equipment they have through regular meetings. “We realise you have to talk to customers all the time,” says Butler. “To take back what we’ve learned and feed it back to what we do here.” In manufacturing, SPTS implements continuous improvement. The company started to invest in lean and uses 5s methodology. Mike Hewlett, vice president, operations, says: “We also have a pretty robust training programme. In the UK division, we have three specific product ranges and the manufacturing staff are trained to a generic level where they can test or assemble all those three products through the same process. It’s a moving target, as new products are designed they are introduced into the manufacturing stream.” Although equipment made by SPTS is expensive, it allows the companies making the chips to do so in high volumes. In fact, customers use equipment to create sometimes thousands of devices on a circle of silicon. Butler explains: “It’s all about economics of scale, volume and cost. Think

of the cost of the modern computer or mobile phone, and then compare the performance to what you had just a few years ago. That incredible reduction in cost/performance is all down to what our customers do in their factories.” SPTS aims to achieve higher capacities. At the moment, however, the firm’s current focus is to continue to develop the markets in which it has already made inroads and, as the sectors in which it operates expand, to undergo organic growth. They will of course continue to keep tabs on new types of applications that cater to customer needs, while expanding future business. Butler is confident about the future of SPTS. “We aim to provide a high service-level offering to our customers and that level of service often leads to other business elsewhere.” By developing trust in its customer base and the continued development of technological innovations in its products, SPTS is looking to grow and develop its business while continuing to cater for the growing demands of a fastmoving market.

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PCD technology Mapal UK

The

cutting edge For the last 18 years, Mapal UK has provided the very latest in innovative new tooling to the automotive industry. Now, the company is looking to do the same for aerospace. Mark Young reports

The

managing director of Mapal UK’s business, John Claypole, says the company’s continual investment in innovation over the years - with a commitment to channel 10% of turnover back into R&D every year – has helped to revolutionise processes within the industries it serves time and time again. Producing polycrystalline diamond (PCD) and carbide cutting tools, including drills, reamers and fine boring equipment, the Mapal Group, headquartered in Germany, operates worldwide and has global revenues totalling some £400m. Claypole founded the UK branch in 1993 as a Mapal Group company to serve the UK market. With an initial team of nine the company achieved its start up objectives in its very first year and has been ever since. A move to its own freehold manufacturing site in Rugby was completed in 2001 and there the

company now employs 50 people, including seven of the original nine. Last year it turned over £7m. The company, according to Claypole, offers a full cradleto-grave service with its own design, manufacture, sales and after service teams. For new tools, the company has carved a niche in designing and producing bespoke tools for specific customer processes; only a fifth of its sales are “off the shelf” products. Repairing and regrinding is also a big part of the business, accounting for around 70% of workflow for the UK site. The most important thing for us is that we are able to service our own products. That’s key because it gives us the regular business to keep our business ticking over and we are able to reinvest into the new product lines and our people, machines and processes,” says Claypole

We are equipped to be able to complete a specialist task and over the years we have developed a mindset to do this, we can just walk it through; we’re much more in control John Claypole, Managing Director, Mapal UK Mapal UK predominantly serves the automotive industry and counts most of the large automotive manufacturers plus a large number of major sub-contractors among its customers. In the last two years it has began to branch out into aerospace, where it has already won a contract with a large UK manufacturer. This has been made possible by a decision some years ago by the group to focus on composite materials. The company envisaged that one day materials will be used in high-volume car manufacture, and Mapal will have an enviable blend of capability and network to take full advantage of the development when it happens. First with its Guide-Pad technology – a revolutionary system for supporting the blade in a cutting tool – and now

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Mapal UK with the state of the art PCD tools, Claypole says the company has been a “leading light” in the introduction of new innovative tools which have allowed its customers to work quicker, with more precision and to a better quality than ever before. All the developments have been driven by customer demands as they also face changing situations in technology and skills. Being a small organisation also helps Mapal UK to be more flexible and responsive to the needs of its customers, Claypole contends. “We are equipped to be able to complete a specialist task,” he says, “and over the years we have developed a mindset to do this, we can just walk it through; we’re much more in control.” Mapal UK has invested in machinery in the UK to serve the requirements of its customers. The most important detail is quality and processes and equipment and have been mirrored wherever possible from our parent company.

An internal affair Mapal UK didn’t lose one member of staff throughout the downturn. “Our utmost priority was keeping hold of our employees,” says Claypole. “Not only because we have a strong sense of duty towards looking after our people but also because the skills to operate

Mapal UK: Part of the Mapal Group which is headquarted in Germany with £400m turnover UK company founded in 1993 by John Claypole, Mapal UK Turnover of £7m; 50 employees Makes drills, reamers, fine boring and ISO-Style tools, specialising in polycrystalline diamond (PCD) technology Offers full end-to-end service, including design, manufacture, after service and maintenance Traditionally automotive focussed, now branching into aerospace

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our machines are very specialist. Our guys are very skilled at what they do.” Instead the company went onto short working and management took pay cuts. “It still wasn’t easy,” adds Claypole, “but we had to make sacrifices in order to do the right thing by everyone. Without these measures we would have had to make 25% of the workforce redundant, it’s as simple as that”. The company is now operating its usual work patterns and overtime as business has now returned to pre-2008 levels.

Our utmost priority was keeping hold of our employees. Not only because we have a strong sense of duty towards looking after our people but also because the skills to operate our machines are very specialist. Our guys are very skilled at what they do John Claypole, Managing Director, Mapal UK Claypole has an ambitious target to reach £10m over the next three years. But a rapidly growing product portfolio to extend sales within the current customer range and the foray into aerospace makes that a very realistic aim. He says, “With the ideas we’ve brought across from automotive into aerospace, we’ve really seen the opportunities to increase our business substantially using our products and processes, expertise and new tooling concepts from within the Group. If customers look at all aspects of the company that they buy from then I think that we have a model that is difficult to beat.”

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The Manufacturer April 2011 issue