The Manufacturer - Dec / Jan

www.themanufacturer.com December/January 2009 Vol 11 Issue 12

Leadership & strategyFalling exchange rates

Design and innovationIP in China

World classCultural change

AppointmentsThe sector’s top jobs

InterviewIain GrayCEO, Technology Strategy Board

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Welcome to our December/January issue. At the time of writing, UK interest rates are at their lowest in over 50 years and we’ve just had the announcement that US rates are now at virtually zero. Also, US rates will now be allowed to float rather than being set at a specific figure, as was previously the case.

It is becoming clear that many of the world’s most important economies are heading for a full Keynesian economic strategy. This is something that a year ago would have been simply unthinkable.

What is just as evident though, is that reality is changing fast – data that attempts to describe it is often defunct by time of publication and any previously sacrosanct rules can simply be tossed aside. Therefore, further uncertainty – the bane of any industry – awaits UK manufacturers.

What is encouraging, however, is the Financial Times’ new “manufacturing barometer”. As a new measure of the industry it has brought to the fore a more positive outlook amongst senior UK manufacturers than commentators, and indeed the Government, would have us believe. This perspective has also been mirrored at our recent Manufacturing Directors’ Forum dinners. The media excel at creating panic and sometimes put into practice what they themselves predict. But while the current situation is clearly not unanimously great for UK manufacturers, equally it is by no means completely doom and gloom.

So what can you do? Stop looking at the bigger picture; visions can be distorted. Start by looking at your own business and asking some questions – can your activities be aligned to take advantage of the new nuclear programme? Are there opportunities to provide larger organisations with solutions to their skills shortages? Can you align your activities to more recession-proof products? Can you provide piecemeal or small run products to customers you thought you had lost to China or elsewhere? Can you take advantage of the exchange rate to open up new markets?

There are opportunities out there; go and search for them. Here’s to cracking the crunch 2009.

Nick Hussey – Chief Executive Officer

Contents

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News and featuresNews

Manufacturing newsNews in brief from the industry

Lean practiceJust Jones

Study the daily workings of your business to find the root cause of waste, says Dan Jones

EconomicsThin pickings for manufacturers

David Smith examines Alistair Darling’s pre-Budget report. Has it helped industry at all?

InterviewStrategy for success

Becky Done discusses the importance of innovation in manufacturing with Technology Strategy Board CEO Iain Gray

Lead storyReaping the green benefits

Manufacturing sustainability means good business as well as good citizenship, reports Colin Chinery. But is the message getting through?

Leadership and strategyWhy falling exchange rates are not a silver bullet

Lesley Batchelor, chair of the Institute of Export, discusses the effects that the pound can have on UK export

Vision, visibility and involvementManufacturers should consider a radical shift in management approach, especially

during testing times, says Jamil Rashid of JARA

Special featureFit for purpose

Manufacturing experts from Barclays Commercial Bank are surprisingly upbeat about the prospects for manufacturing industry, finds Malcolm Wheatley

Design and innovationDispelling some of the myths – manufacturing and IP in China

How to rise to the challenge of maintaining intellectual property rights and quality control in China


Toby Arnold of Lean Business Solutions, MAS Y&H Practitioner, reveals how companies are diversifying from lean to continuous improvement

Skills and productivityBlueprinting excellence: how to avoid a skills gap

Bob Gibbon of the National Skills Academy for Manufacturing explains why an economic downturn is the right time for employers to invest in the training of its staff

IT in manufacturingSeconds out

The lines between in-built and best-of-breed advanced planning and scheduling (APS) systems are becoming increasingly blurred. So how do they fare against one another?

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The Right ToolsVisibility

Forward Looking Precision Quality & Accreditations

Blueprint to Success

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TAC Europe is one of the largest dedicated providers of technical staff operating in the recruitment market today. For more information on how we can help you or your organisation, please contact us at [email protected] or alternatively call us on +44 (0)8700 600 822 quoting ‘TACMAN08’.

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Furniture – Boss Design Oil & gas – Regal Petroleum

Suspension equipment – Gripple Electrical equipment – Drallim

Industries Furniture – Westbridge Furniture

Designs

Factory of the month Dematic

“It’s about understanding the client’s business and being able

to integrate the technologies into an intelligent optimised

solution that addresses all the client’s challenges in the most

cost effective way”

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Manufacturing inaction

Special featureNext level technology

Epicor Software Corporation introduces its latest enterprise resource planning (ERP) offering

Logistics and supply chainManaging the internal supply chain

While supply chains are not a new concept, they have become ever more complex in the emerging world of global competition and distributed manufacturing

An appetite for automationAt HJ Heinz’s national distribution centre (NDC) near Wigan, sophisticated technology is

used to move products smoothly around the building

Operations and maintenanceSafety in automation

Following an HSE visit, manufacturer CA Group decided to fulfil its own health and safety needs through robotic innovation

Sustainable manufacturingCarbon reduction schemes

Liz Morgan of EIC energy consultancy explains how emission reduction schemes operate and how manufacturers can make them work together effectively

Special featureBritish Gas roundtable report

At a dinner hosted by British Gas Business and The Manufacturer magazine, representatives of UK manufacturing firms met to discuss the most pressing issues affecting industry today

A diary of product developmentThe Evora journey

Lotus continues in the VP phase of the Evora production cycle, and prepares to build the first EP Federal cars

A diary of a takeoverKanban Sheet Metal: Delivered on time

Paul Bell and Mark Blayney explain how Kanban Sheet Metal has met the need for a fresh marketing strategy

AppointmentsTop jobs in manufacturing

The pace to look for industry job vacancies

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Environment: The FDF’s Five-fold Environmental Ambition already proving a success

Food and drink manufacturers cut carbon

Economy: The downturn claims Black Country bakery

Bakery slices 140 jobs

NewsinbriefStaffordshire firm Glass Installations is celebrating its forthcoming debut on the silver screen having received an order from a Hollywood studio for its glassless mirrors. The Weinstein Company has asked it to produce 30 six by two metre glassless mirrors to form the backdrop for their screen adaptation of the musical Nine, starring Nicole Kidman and Daniel Day-Lewis.

Around 850 IT and engineering agency workers are facing a bleak Christmas this year as Tata-owned Jaguar Land Rover announced further job losses. The IT and engineering staff have been informed of the discontinuation of their employment as of the end of the year. Jaguar Land Rover said that the move had come as a result of its need to “take responsibility and rapid action for the challenging environment it faces.”

In the midst of the downturn, one Gywnedd-based manufacturer has come from humble beginnings to reach impressive heights. DMM started life in a shed in Llanberis 20 years ago, founded by four friends who made mountain climbing equipment. But the increase in health and safety legislation has allowed the firm to trade in new and fruitful markets. “We are finding that more and more of our products are being used in above ground work,” explained managing director Richard Cuthbertson. The company now employs 120 people in Gwynedd.

Toyota has revealed the latest Avensis model at its Burnaston factory, despite suspending the night shift which produces the Auris until March 2009. The Japanese car firm has been hit hard by the economic downturn, with net profits falling by 69 per cent between July and September. But Clive Bridge, Toyota UK’s corporate affairs director, is confident that this is the right time for the launch. “When times are difficult you want your best product on show,” he said.

Member companies of the Food and Drink Federation (FDF) have cut their CO2 emissions by 17 per cent since 1990 – the equivalent of taking 22,000 cars off the road.

The report shows that the industry has released 58,000 tonnes of CO2 less on average per year since 1990. Member companies have achieved this by boosting productivity, improving energy efficiency in their manufacturing processes and using more renewable sources of energy.

Tom Delay, CEO of The Carbon Trust, congratulated the FDF: “The Carbon Trust welcomes the real efforts FDF is making towards understanding greenhouse gas issues in the food sector and congratulates it on helping its members to make significant reductions in their carbon emissions.”

FDF has announced that not only have they drastically cut their carbon emissions, but in addition they have recycled or recovered 82 per cent of the food and packaging waste created in factories. The Federation House Commitment has also been launched, under which 237 food and drink manufacturing site are working to improve water efficiency.

Fiona Dawson, chair of FDF’s Sustainability and Competitiveness steering group, said: “Our report demonstrates that our members are committed to making a real difference to the environment. The reduction in CO2 emissions is an incredible achievement and sets us well on the way to reaching our target or cutting emissions by 20 per cent by 2010.

“As with other sectors we are currently experiencing challenging economic times. However, our members remain determined to meet the commitments contained in FDF’s Five-fold Environmental Ambition.”

FDF launched its Five-fold Environmental Ambition in 2007, setting targets like sending no food or packaging waste to landfill after 2015. The plan also urges companies to embed environmental standards in their transport practices to achieve fewer and friendlier food transport miles.

Hilary Benn, Secretary of State for Environment, Food and Rural Affairs, added: “This is an example of what businesses can do to improve their environmental performance by working together. We need to see more of this.”

Firkins Bakery, based in West Bromwich, has been forced to cut 140 jobs after going into administration. Rocketing overheads and the economic downturn are blamed.

The business was founded 138 years ago. Managing director Ian Bolderston saved 200 jobs by buying back 30 of the shops from the administrator, but 21 branches across the Black Country have had to close.

“This is an awful position to find ourselves in,” he said. “In the past year, the price of ingredients, electricity and gas have soared,

meaning the overheads to the business have become crippling.

“We have battled to keep the business afloat and had agreed in principal to additional investment but when the financial wheels came off the banking system over the last two months the funding package could not be agreed.”

Bolderston regretted that without the required funds Firkins Bakery could not survive in its current form. “We are very sorry to the staff and suppliers who will lose out because we could not make the business work.”

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ThemonthinbriefBroxap, an outside-furniture manufacturer in Staffordshire, has bought out Wigan-based rival BollardTech in a deal reportedly worth in the region of half a million pounds. Broxap makes benches, smoking shelters, playground facilities and railings from its base in Chesterton near Stoke-on-Trent and another plant in Southport, Merseyside. The production of BollardTech’s street furniture and cycle parking wares will now move from Greater Manchester and be split between Broxap’s two factories. Broxap expects to turn over £40 million this year.

Midlands-based Hampson Industries has seen a 149 per cent increase in pre-tax profits in the last six months. The firm, which started in West Bromwich in the 1940s, manufactures tools for use within the aeronautical sector. It specialises in shins, which are used to fasten together aircraft components. Although Hampson’s financial director Howard Kimberly admits that these are “a fairly low-value part”, the company’s expertise within such a niche market has allowed them to become very profitable. “The important feature of our business is that one of our key sectors is not correlated to commercial build rates,” he said. “We provide tooling for the construction of aircraft, and are the market leader by a factor of four.” The market-leading company also attributes its increasing profits to its acquisitions: Hampson has bought several US tooling companies, including Global Trading Systems, which is based in Michigan.

Nottinghamshire adhesives manufacturer Henkel UK has announced it is to close the site as it is “under-utilised and no longer viable.” The company will move production from the Newark plant to its other sites in Italy and Germany resulting in the loss of 35 jobs. A spokesperson said: “Henkel’s policy is always to minimise any redundancies and the company will work with all members of staff to fully explore alternatives or provide full assistance to all affected employees with job search and financial support in-line with the company’s existing redundancy policy.” Production will cease in the first or second quarter of next year.

Workers at Calcast’s car parts factory in Londonderry have ended a protest against the reduction of the statutory redundancy notice offered by the French-owned firm. Ninety of the 102 workers employed at the factory have been made redundant. The dispute began after the period of notice was reduced from three months to one. The sit-in finished when the factory agreed to improve the redundancy package they offered, although the notice will remain 30 days. Thomas Fleming, one of Calcast’s employees, said of the dispute: “A lot of it is still ongoing but suffice to say that the membership are happy enough with what has been negotiated. We got more or less what we were looking for at the start, and they’re happy that they got what they expected to get.” The 12 employees who have not been made redundant will be relocated to other firms.

JCB has announced it is cutting 398 UK jobs due to “extreme deterioration in business levels and confidence”. The news comes after nearly 200 jobs were cut at the Staffordshire-based firm earlier this year. The remaining workforce agreed to a 34 hour week by a two-thirds majority. The latter agreement brought the first round of redundancies down from an original estimate of over 500. JCB is cutting production by 34 per cent for the remainder of the year. JCB chief executive Matthew Taylor said: “The level of business we are doing out in the markets right around the world has dropped very dramatically after the torrid financial times in September.”

News Politics: Alastair Darling announces recession-combating tactics

Pre-Budget report mixed blessing for manufacturersThe Chancellor of the Exchequer Alastair Darling’s pre-Budget report included several measures aiming to prevent a long recession in Britain, some of which will directly affect manufacturers.

The package of tax cuts and increased spending is expected to bring £15 billion into the economy, according to government sources. The measures include: a reduction in VAT to 15 per cent, scrapping of a one per cent rise in corporation tax and an increase in the size threshold on empty properties before they are taxed.

Some doubt that the 2.5 per cent cut to VAT will be enough to encourage consumer spending.

Miles Templeman from the Institute of Directors said: “We have considerable doubt that the 2.5 percentage point reduction in the VAT rate will stimulate consumer spending as much as the Chancellor expects.”

But SMMT’s chief executive Paul Everitt is pleased with the measures Darling has outlined:

“The Chancellor has made a positive step to help restore consumer confidence and kick-start responsible spending. We now need to see action to remove the constraints on credit and finance so consumers and businesses can take advantage of the changes announced.

“The motor industry faces a set of unprecedented market conditions. Urgent action is required to boost demand for new vehicles and ease pressure on UK automotive suppliers.”

Manufacturer Simon Ecclestone feels that the positive effects of the VAT cut will be undermined by the increased National Insurance contributions targeting people who earn £100,000 or more, as high-level consumers will be more likely to relocate abroad to areas with lower taxes.

The changes to NI contributions will also hit employment hard. David Frost, director-general of the British Chambers of Commerce, said: “The proposal to increase National Insurance contributions is wrong. At the very time when the economy should be coming out of the recession, businesses will face an extra tax on employing people. This is not the way to reduce unemployment.”

The industry welcomes the deferment of Small Business Rate of corporation tax. Firms with commercial properties worth less than £15,000 will receive rate relief so that they are less tempted to demolish their vacant warehouses. They will also be given options to pay their tax bills over longer periods of time.

Richard Lambert, CBI’s director-general, said: “The reversal of empty property rate relief changes will be welcome to holders of small properties but regrettably excludes larger factories and warehouses which need similar help.”

The pre-Budget report aims to help small businesses to an extent, however Darling has created fewer benefits for larger firms. Lambert is concerned about an overall lack of structure to the proposals: “We are disappointed with the absence of a clearer framework of new fiscal rules.”

Manufacturing

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Skills: The UK prepares for bi-yearly international competition

Young engineers selected for Worldskills squad

NewsinbriefAlmost 100 jobs have been saved at a Norfolk printing firm after the company was bought out when on the brink of administration. The Cornwall-based MPG Books has acquired Biddles in King’s Lynn to create a new incorporated company – MPG Biddles Ltd. The venture means the new company is the largest independent book manufacturer in the UK, according to the firm.

The former Scottish & Newcastle (S&N) CEO John Dunsmore is to take up the reins at Irish cider maker C&C – the home of Magners and Bulmers Original. Two of his former colleagues at S&N, Stephen Glancey and Kenny Neison, will join Dunsmore at C&C, as chief operating officer and strategy director respectively. The S&N Group – brands of which included Foster’s, Kronenbourg and Newcastle Brown Ale – was broken up in April this year and sold in parts to continental brewers Heineken and Carlsberg. Dunsmore is to use some of the £3 million pay off he received from that deal to set up a €1.5m “quasi private equity” package.

Iconic British porcelain-maker Royal Worcester went into administration after failing to find a buyer for its site in Stoke. The firm has been in business for over 250 years, having started in Worcester in 1751. At the end of the 18th century it received the Royal Warrant – a commission to supply goods to the Royal family or its estates. The 388 staff that remain at the firm – they once numbered close to a thousand – are now waiting to hear whether their jobs can be saved through a sale.

Don’t forget The Manufacturer website, packed with news, features and case studies. There is also a blog section, including such entries as ‘Does implementing a lean process conflict with improving H&S standards?’ by Stuart Field of Northgatearinso. You can post your own comments on this and any other item on the site. Visit www.themanufacturer.com

Four young engineers have been given the chance to represent the UK in the biggest skills competition in the world – Worldskills Calgary 2009.

Melanie Adlam (21) from St Albans and Andrew Fielding (18) from Bolton, who both work for MBDA UK; William Darvill (19) from Clevedon, who is a student at Bournemouth University; and Martin Eusebi (20) from Glasgow who works for MB Roberts (Aerospace) have all been chosen to be part of a squad of 30 talented young people by UK Skills. They hope that they will be ready to take on the very best in the world at the next Worldskills event which will take place in Canada in September 2009.

Melanie and Andrew competed in Industrial Electronics and William and Martin excelled in Mechanical Engineering CADD. They were chosen for Squad UK after a tough three day selection competition which took place at SkillsLondon. Now they will need to increase their training to ensure a place on Team UK, which will go to Calgary in 2009. The team’s line-up will be announced in June.

On behalf of the four engineers William said: “We’re already proud of what we’ve achieved. Just getting onto the squad means that we’ve proved we’re good at what we do. We enjoy our professions

and want to be the best we can be and now it’s important that we train hard to make sure we can compete against the best young industrial and mechanical engineers in the whole world!”

WorldSkills is an international skills competition held every two years, where 52 member countries meet and compete in over 40 different vocational areas. These include Beauty Therapy, Web Design, Cabinet Making, Floristry and Engineering. The intense four day competition will take place between 2 and 5 September. Over 200,000 spectators are expected to attend the competition.

Skills Minister Lord Young said: “Having seen these young people in action at the selection event I am already in awe of how talented they are. They are proving what talent there is in this country and I hope they can show other young people just how fulfilling vocational careers can be.”

The UK’s WorldSkills team is managed by UK Skills working in partnership with the Department for Innovation, Universities and Skills, the Department for Employment and Learning Northern Ireland, the Scottish Executive, the Welsh Assembly Government and key partners from education, government and industry.

Go to page 44for this month’s skills and productivity feature on how to avoid the skills gap

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ManufacturingNews Economy: MPs voice concerns over the effects the credit crunch may have on skills

Apprenticeship bill comes under threat

Environment: Collaboration allows manufacturer to utilise recycled materials

WRAP research makes recycling breakthrough

NewsinbriefPerry Uniform, a historic Leeds tailoring firm rescued from administration by a serial entrepreneur and former military man, is set to relocate to new premises in Bramley, where a self-funded £300,000 investment will create over 30 new jobs. The 15,000 square foot new premises will house production, a new design studio and sales call centre.

Carrs Toolsteel Technologies has installed a new precision machining facility – the first of its kind anywhere in Europe. Adrian Bailey MP, West Bromwich west, carried out the official opening of the centre. The investment included financial assistance from Advantage West Midlands through a Selective Finance for Investment in England (SFIE) capital investment grant.

Teknek, the Glasgow-based international engineering company, has been honoured with an award for Outstanding Achievement in Exports 2008 by the Scottish Council for Development & Industry (SCDI). The award was presented by Jim Mather MSP, Minister for Enterprise, Energy & Tourism at the prestigious SCDI Awards for Exports & Enterprise ceremony, held in Glasgow on 21 November and attended by over 700 guests.

DCI/Jet Tec, manufacturer of compatible inkjet cartridges, has celebrated its 25th anniversary, marking a quarter of a century of production from its Dynamic Cassette International plant in Boston, Lincolnshire. The company was established in 1983 when engineer, John Studholme, built a factory around two moulding machines manufacturing typewriter cassettes. He went on to design all machinery in the factory himself and build an award-winning, eco-friendly business employing over 200 people.

A government bill aiming to create 400,000 apprentice places by 2020 is under threat due to the economic downturn, according to some MPs.

The bill aims to massively increase the number of apprenticeships available in England over the next decade. But now there are fears that small businesses will cut back training programmes during the current economic crisis. The committees warn that the only way to sustain these would be for government assistance to be given.

MPs in the Children, Schools and Families committee and the Innovation, Universities, Science and Skills committee are concerned that 400,000 is an unrealistic target. They fear that the bill is ill-equipped to ensure that all these are of a high standard.

Brenda Barber of the TUC said: “If apprenticeships are to offer meaningful career opportunities, they must be of good quality, where apprentices are treated well and earn a decent wage.

“Legislative powers to regulate and promote apprenticeships give the opportunity to do just that, and it is important we get it right.”

Those opposing the bill in its current state have called for it to be redrafted, to avoid the quality of the schemes being diluted, resulting in apprenticeships becoming worthless.

In September Gordon Brown announced that he would support the creation of 1,500 apprenticeships specifically in manufacturing, pledging £24 million to research in this industry.

Italian white goods manufacturer Indesit has become the first electrical goods maker to incorporate recycled materials into mass-produced merchandise after a successful research and development programme carried out with WRAP (Waste & Resources Action Programme).

The company can now take plastic from the UK waste stream, specifically Waste Electrical and Electronic Equipment (WEEE), and use it to make cover plates for two of its washing machine models.

The material has been produced using shredded plastic waste recovered from domestic fridges, and made into a high grade polymer that has a similar weight to the virgin plastic it is replacing. As a result, the CO2 emissions, cumulative cost and raw material savings from this activity are significant.

Peter Maddox, head of manufacturing at WRAP, said:

“This groundbreaking project has demonstrated that closed-loop recycling in electrical equipment from UK WEEE is commercially viable on a large scale for the first time, with no negative effect on performance. We encourage other manufacturers to follow this example.

“Our recent research has also demonstrated that some consumers are willing to buy products that contain some recycled content over those that do not – further strengthening the business argument for this approach.”

WRAP, a non-profit government funded organisation committed to lowering carbon emissions, says it has market research that suggests consumers are ready to favour products made from recycled materials.

To find out more about the organisation and the services it offers manufacturers, visit www.wrap.org.uk/manufacturing

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Datesforthediary21 - 22 January 2009AMIS Master Class seminar at the Guinness Brewery, St James Gate, Dublin, IrelandFollowing on from the success of Diageo’s St James Gate site achieving world class asset care status and interest from the article in The Manufacturer magazine, Diageo is now hosting an asset management seminar for managers who are looking for further opportunities to deliver operational improvements in their own organisations. Contact Sarah James, MCP, on 0121 506 9034 or email [email protected]

25 February 2009Envirowise webinarThis free online ‘webinar’ is for businesses to find out how tackling the issue of over-packaging can save them money. The webinar is aimed at product and packaging designers to help them deal with rising material costs and increasing pressure to improve their environmental credentials. Visit www.envirowise.gov.uk/webinar or call the Envirowise advice line: 0800 585 794.

10 - 11 March 2009Process Engineering Live 2009, Manchester CentralThis landmark event for the process sector is a unique opportunity to listen to and engage with top industry specialists to address the most crucial issues facing the process industry today. Process Engineering Live features a wealth of engineering excellence and promises to deliver real tangible benefits that you can take back to the plant. Register for a free visit at www.processengineeringlive.co.uk

24 - 25 March 2009Business Continuity Expo 2009, ExCeL LondonBusiness Continuity Expo showcases a diverse range of products, services and toolkits that help you ensure the continuation of your business at all times. This vibrant mix of experts, market leading suppliers and interactive education forums explores how to manage risk, resilience and recovery before, during and after an incident. Visit http://www.businesscontinuityexpo.co.uk/

Automotive: Unions fear for job safety at the Swindon Honda site

Honda encourages voluntary redundancyAfter previously vowing to save jobs at its Swindon factory with a 50-day halt to production, Honda is now encouraging its staff to take voluntary redundancy.

This coincides with the announcement that production at the factory will be 23 per cent lower this financial year than originally expected.

Honda has introduced two new redundancy schemes. Although the company has claimed that there is no target for people to sign up to them, the union Unite which represents workers at the factory is concerned that the plan to shed 1,000 jobs will lead to compulsory redundancies.

A Unite spokesman said: “The position at Honda is very precarious.”

Workers can join the Associate

Release Scheme, which offers a payout which is larger than the statutory minimum redundancy package. Another option is to take a six month sabbatical as part of Honda’s Personal Development Scheme.

Honda said in a statement: “Honda recognises that during these uncertain times, there may be some associates who would want to consider self development leave or other release options.”

But Unite remains concerned, saying: “We know that if these or something very similar to these schemes are not successful in voluntarily reducing the associate headcount, then it brings nearer the day when the possibility of compulsion will be used.”

Collaboration: Nuclear partnership set to create up to 15,000 jobs

Rolls Royce to build UK nuclear reactors with ArevaRolls Royce will collaborate with French nuclear specialist Areva to construct a series of nuclear power plants in the UK, the first to be built for 20 years.

Along with construction firm Balford Beatty, Rolls Royce will help to build European pressurised reactors (EPRs) which could have the capacity to generate 20 to 25 gigawatts of nuclear power over 25 years.

Balford Beatty constructed several nuclear plants in the 1970s and 80s including Sellafield and Torness.

Rolls Royce has been involved with the UK’s nuclear development for 50 years, designing, manufacturing and supporting technology for the Royal Navy, so it will supply reactor parts and engineering skills to the programme. The partnership is set to create 10 to 15,000 jobs, of which around 5,000 will be for engineers.

Mike O’Brien is the Minister at the Department of Energy and

Climate Change. He said in a statement: “This is good news. It represents a vote of confidence by Areva in the UK’s new nuclear market and a vote of confidence in the UK supply chain. This is the welcome face of low carbon energy we’ll see more and more over the coming decades, opening up enormous potential for UK plc at home and globally.”

The first EPR will be operational in 2017, on one of eight sites owned by the UK’s nuclear generator British Energy. George Lowe, president of Civil Nuclear, said: “I am delighted that Rolls Royce and Areva have agreed this important memorandum of understanding.

“Rolls Royce has significant and growing capabilities in the civil nuclear sector which place us in a strong position to work on new nuclear programmes as they develop in the UK and across the world. Working with Areva on EPR projects is a key element of this strategy.”

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ManufacturingManufacturingoutputRecession continues but still hope for the futureLatest figures from the Office for National Statistics (ONS) show that manufacturing output decreased by 2.0 per cent in the three months to October 2008 compared with the three months to July 2008. Output decreased in 12 out of the 13 sub-sectors and increased in one sub-sector.

Within the widespread decreases in the latest three month on three month period, the most significant decreases in output were 4.6 per cent in the transport equipment industries, 3.4 per cent in the paper, printing and publishing industries and 2.6 per cent in the basic metal and metal products industries. There were no significant increases during the latest three month on three month period.

Total production output decreased by 1.8 per cent in the latest three month on three month period.

Between September and October, manufacturing output decreased by 1.4 per cent. Output decreased in 10 of the 13 sub-sectors and increased in three sub-sectors during the latest month. Within the widespread decreases, the most significant decreases in output were 3.6 per cent in the paper, printing and publishing industries and 4.2 per cent in the basic metal and metal products industries and 2.8 per cent in the transport equipment industries. There was one significant increase in the latest month of 1.6 per cent in the chemicals and man-made fibres industries.

“Further decreases across the board were to be expected, with the automotive industry being the worst hit with a 4.6 per cent drop in output. In particular, the proposed temporary closure of some automotive OEM plants will have a knock-on effect on the supply chain, causing manufacturers’ working capital and stock levels to rise,” said Ray O’Donoghue, head of UK manufacturing at Barclays.

“Despite this contraction in demand, a weakened sterling is providing some element of relief for exporters to the EU and US dollar denominated markets. This along with Government measures should help to stabilise both demand and consumer confidence.

“Looking ahead to next year, a combination of reduced inflationary pressure, interest rate measures and a fall in input costs, highlighted by the predicted further decrease in oil prices, could go some way to further alleviating pressures felt in the manufacturing sector which has proven itself to be resilient to economic challenges in the past.”

News Outlook: Survey shows manufacturing output situation worsening

Order books continue to sufferThe latest CBI Industrial Trends Survey has shown the outlook for manufacturing output in the next three months to be the weakest for nearly 30 years.

Order books are still suffering in the slowdown. Sixteen per cent of those surveyed say their total order book is above normal, while 53 per cent say it is below normal, giving a balance of -38 per cent.

Export order books also reflect the overall slowdown, with 44 per cent of firms recording below normal volumes (a balance of -31 per cent).

Due to the weak demand, manufacturers’ inventories have built up to their highest level since December 2001, with a balance of +25 per cent of firms seeing their present stock levels as more than adequate to meet demand.

Output expectations are their lowest since 1980. Fourteen per cent of manufacturers expect their volume of output to rise over the coming three months, but 56 per cent expect it will fall. The resulting balance of -42 per cent is in fact the lowest since September 1980 (-48 per cent).

“The outlook for manufacturers has deteriorated considerably since the banking crisis took a turn for the worse in October. Expectations for output are now the gloomiest in 28 years, while firms’ order books remain weak,” said Ian McCafferty, the CBI’s chief economic adviser.

“With a sharper and more prolonged UK recession in prospect, conditions are going to remain tough for some time. A slowing global economy, particularly in the eurozone, makes the immediate benefits of a weak pound fairly muted for exporters. But the weakening in factory gate prices will feed through to declining inflation in coming months, giving the Bank of England room for further significant rate cuts.”

Closure: Dire consequences for sack manufacturer

BPI to close Stockton factoryBritish Polythene Industries (BPI) is to close its black sack factory in Stockton-on-Tees, incurring the loss of 165 jobs.

The company, which makes industrial strength sacks and agricultural film, said the site has been losing money since 2006. For 2008, owing to the dire conditions facing the construction industry to which it mainly supplies, it will lose £2.5 million.

“Given the losses, the reduced demand in the marketplace, the requirement to reduce operating costs and the spare capacity available elsewhere within bpi.industrial, we believe that continued manufacturing at Stockton is no longer viable,” said the firm.

“It is proposed that production currently undertaken at Stockton will be transferred to other sites within the BPI Group, including Ardeer and Greenock, and could create up to 40 jobs during 2009. It is proposed to undertake a gradual scale down of operations to avoid any disruption to customers.”

It went on to promise that “every effort will be made to find alternative employment either within or outside BPI” for the affected staff.

Lean Enterprise AcademyThought Leaders in Lean Thinking

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Essential texts on LeanManagement

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Have your say at www.themanufacturer.com

JustJonesKeeping management lean

Take a walk through your business to find the root cause of waste in your value stream, says Dan Jones

Dan Jones, founder and chairman of the Lean

Enterprise Academy Email: [email protected]

Dan Jones

13

go about releasing it. Which actions in which value streams would release the most cash, if that is the key business objective? A second ‘walk’ led by a sensei would introduce Toyota’s policy or strategy deployment process. Step-by-step they will learn how to agree to only focus on a vital few business objectives or performance gaps to be closed while deselecting everything else. They would learn how to work right down through the organisation to develop a plan of specific actions to close this gap. And they would monitor and adjust these plans as events unfolded. Good results come from a good process, not from issuing targets without a method for achieving them.

Creating a lean value stream involves progressively removing all the buffers that previously insulated the rest from any failures. Although the performance of the process improves dramatically, so does its vulnerability to any kind of disturbance. Even in Toyota they assume that their lean processes will be continually subject to interruptions. So the key to sustaining these processes is the ability of the people running the process to respond quickly to interruptions as they happen and to track and root cause the persistent problems. In other words, developing the problem solving skills of employees at every level is maybe even more important than redesigning the process. This is why Toyota spends so much time training all their staff to think about planning and problem solving in a common way, using the A3 thinking.

What do top managers need to learn in order to be able to lead

a lean transformation? I get asked this question frequently. The answers are the same at every level of management. They begin with three key learnings – learning to see the end-to-end processes or value streams they lead or contribute to; learning to prioritise and focus lean improvement efforts to generate real bottom line results; and learning how people actually develop the problem solving skills necessary to sustain lean improvements over time. In each case understanding the true significance of these new skills only comes through experiencing them in practice.

One of the most immediate ways to teach senior managers how to really see a process is to take them for a walk with an experienced sensei, starting with the end customer and walking back up the value stream as far as you can go. As they follow a product, a patient or a transaction all the way back upstream they will be shocked how many steps there are, how much rework goes on, how excessively long it takes and how unclear it is to everyone just what they should be doing next. This can trigger a more detailed value stream mapping and data gathering exercise to flush out what is really going on.

But this is just the start. Back in the conference room after the walk ask these managers what they saw during the walk and then compare this with what the sensei saw. The managers will quickly realise they have only been looking at obvious symptoms where the sensei was looking for the root causes of the instability and overburden causing all the waste in the value stream and the relatively poor performance at the end of it. Indeed, managers are often shocked not just how oblivious they were of the process but also how blind they were to the causes of the way the process actually operates.

While this wake-up call is still fresh in their minds, go with the sensei to take a second walk to really learn what to look for in diagnosing what is wrong with today’s process and to see what the next steps are. Do this on a regular basis and the sensei can then introduce all the theory and tools step-by-step as they become relevant to the actions that need to be taken.

Once senior managers begin to see for instance how much cash could be freed up by streamlining core processes, the next step is to work out how to

“The managers will quickly realise they have only been looking at obvious symptoms where the sensei was looking for the root causes of the instability and overburden causing all the waste in the value stream and the relatively poor performance at the end of it

“

Economics


As anticipated here last month, Alistair Darling’s pre-

Budget report at the end of November was a pretty grim affair – an official admission that the tough times will persist, and for a very long time.

This was not so much in the Treasury’s economic forecasts, which were for the economy to shrink by between 0.75 and 1.25 per cent next year (the first calendar year decline in the economy since 1991) before recovering by between 1.5 and two per cent in 2010.

Manufacturing, by the way, is forecast by the Treasury to suffer more than the wider economy. After a drop in output of 1.25 per cent this year, it is predicted to see a fall of 2.75 to 3.25 per cent next year, before a slow recovery of between one and 1.5 per cent in 2010.

Manufacturing is being hit by the consumer downturn, but also by a slide in business investment, which is expected to drop by about eight per cent in 2009, after falling by 4.5 per cent this year. Nor is there much comfort in the outlook for exports which, the Treasury says, will grow only fractionally next year, in spite of the help from a lower pound.

According to the Treasury: “Sterling’s depreciation should provide some support for manufacturing growth, although in the near term this support is likely to be more than outweighed by the weaker growth prospects of the UK’s main trading partners.”

So not much to cheer there, or in the individual measures. Industry had asked the chancellor to provide a temporary fiscal stimulus for the economy and it seems churlish to complain too much when he did so, injecting some £20 billion into the economy over the next 18 months.

Many in industry would have preferred, however, that something other than a temporary VAT reduction from 17.5 to 15 per cent (which accounts for two-thirds of the tax reduction) had been chosen. The bringing forward of the Government’s capital spending programme, worth about £3 billion, was modest, as were most of the other individual measures.

The best that can be said of the pre-Budget report, as far as industry was concerned, was that it tried to be helpful. Some of that help, for example in getting the flow of bank lending to business flowing and allowing firms to delay tax payments, will do quite a lot of good.

There remain, however, the two big issues that were there before Darling stood up, and which remained when he sat down. The first was the credit crunch, and its impact on the economy and, more particularly, business.

The Engineering Employers’ Federation’s latest quarterly business trends survey, published in early December, showed not only a worrying slide in manufacturing output, orders, employment and investment but also further evidence of the credit crunch at work.

Firms are finding finance difficult to obtain from the banks and from parent companies. Trade credit and credit insurance is scarce and expensive. The economy’s arteries remain clogged up by a financial crisis that began in August 2007 and which broke spectacularly into the open in September and October of this year.

That, despite all the ministerial posturing about leaning on the banks, is not going to go away quickly. According to the Treasury: “Despite extensive government support for financial systems worldwide, it will take time for conditions to normalise, and recent experience is likely to mean that ‘normal’ credit conditions will be materially less accommodative than they were in the years to mid-2007. The 2008 pre-Budget report forecast is therefore conditioned on the assumption that credit conditions will remain tight in 2008, and ease slowly through 2009 before stabilising in 2010 at a level where risk is more appropriately priced.”

That is not the only problem. We all knew that public finances were in a bad way but, until the Treasury gave us the latest numbers, we did not quite know how bad. Thus, Darling expects to borrow nearly £300 billion – yes £300 billion – more over the next five years than he expected in the March Budget. The public sector’s debt will more than double to well over £1 trillion.

That is even allowing for some tax rises, including a 0.5 per cent increase in both employer and employee National Insurance contributions from 2011 and, a squeeze on high earners, including a new 45 per cent top tax rate on earnings of £150,000 or more. Capital spending by government, which has built up rapidly in recent years, will decline as a share of gross domestic product, suggesting firms should make the most of what they get over the next couple of years.

The fiscal numbers were awful and the credit crunch is real. Not much, unfortunately, to be cheerful about.

So, did the pre-Budget report lift the spirits of the industry? Hardly, says David Smith

Thin pickings for manufacturersDavid Smith,

economics editor of The Sunday Times

David Smith

15

Iain Gray is a man with vision; and as chief executive of the UK’s Technology

Strategy Board (TSB), his options for channelling it are likely to be limitless. With the main purpose of the TSB being to promote innovation, its High Value Manufacturing competition, due for launch in January, is designed to do just that. It will provide manufacturers with a golden opportunity to attract investment for projects which promote international competitiveness, and to pitch for funding supporting specific research.

The competition is backed by £24 million of funding, and Gray is clearly excited about the new prospects for manufacturing that could be unearthed: “We’ve had, over the last few years, some very big high-value manufacturing competitions – and we get very good quality applications,” he enthuses.

16

Having arrived at the Technology Strategy Board last year fresh from Airbus, chief executive Iain Gray is ideally placed to consider how technology and innovation can take manufacturing forward into a new age. Becky Done talked to him about a strategy that will help to redefine the sector for future generations

Strategy successfor

Collaboration of this sort will be a key factor in the success of UK manufacturing on the global stage, hopes Gray. But promoting success is something at which, in his opinion, manufacturers have not excelled in the past. He hopes that now, with an increasing show of support from the Government, this could start to change – a shift, as an ex-manufacturer himself, he would be extremely happy to experience. “I was very privileged to be part of the Ministerial Manufacturing Advisory Group which put the new manufacturing strategy together through the summer and autumn of this year,” he says. “One of the key themes arising from that was the Government’s absolute recognition of what they refer to as the mixed and balanced economy, and the importance of manufacturing in the overall economy – and the recognition of that importance.”

He believes a distorted picture of the health of manufacturing in the UK is prevalent, and that the pivotal role the sector plays across the economy often slips under the radar. “Manufacturing is not in decline,” he asserts, “but it is changing. I think the Government itself is starting to recognise the role that manufacturing plays in the service sector: in the design, the production, the manufacture and the service itself. So when people talk about a service economy, quite often it is manufacturing companies that are actually directly engaged in the service economy itself,” he explains. “The Government is strongly recognising the role of manufacturing and is really looking at ways and means by which it can demonstrate that.”

Gray acknowledges that the TSB’s influence on the manufacturing sector is more indirect than direct, but he still believes the organisation has an extremely important role to play. “An increased focus and emphasis on manufacturing is hugely important, and our organisation is the key interface with a lot

of manufacturing businesses. We see many of the success stories in bioscience, pharmaceutical, automotive and aerospace, as well as some of the smaller manufacturing businesses. One of the roles of our organisation is the identification of those success stories; of the really good things – because that’s something that we’ve not always been so good at here in the UK. I don’t know whether it’s a cultural issue associated with engineers and manufacturers,” he muses, “but somehow, the manufacturing sector is happy to quietly get on with it and not always talk about its successes; and then we wonder why people aren’t attracted into it. I think it is incumbent on us all, and the TSB has a very key role to play in helping to promote manufacturing success stories.”

Manufacturing is close to Gray’s heart, as he came to the TSB from Airbus, where, for the three years prior to his departure, he was managing director and general manager. Such a solid manufacturing background has no doubt afforded him an invaluable understanding of what the sector needs going forward: “There’s no doubt that having spent 27 years in the manufacturing environment, I have an understanding of emerging manufacturing technologies and methodologies,” he says. “I’ve got a view of the importance of working with the supply chain, I can understand manufacturing in an international context and [issues around] competitiveness and I have an understanding of the context of the world in which we live. If you look at manufacturing businesses, productivity is a key requirement, skills are a key requirement, and exploitation of technology is a key challenge,” he says.

So coming from Airbus has been useful in terms of insight and experience for life at the TSB, but Gray acknowledges a single sector background can also throw up challenges. “Having come from a single sector – aerospace manufacturing – I have found one of the great things about this organisation is being able to draw people from all different sectors and technology areas together. But one of the challenges in that is providing focus and trying to develop detailed strategies of how to move forward. The biggest opportunity is that we’ve got an organisation containing people from a lot of different sectors and therefore a lot of understanding of each other’s experiences. One of the things that has been most exciting – and challenging – is how technologies in one sector can actually be moved across into other sectors.”

This principle of active sector integration and knowledge-sharing is, Gray believes, a key enabler of innovation – itself an undisputed gateway to success – and this means an ability to think laterally.

“Innovation is hugely important. In the UK we find it hard to compete on pure cost alone, so really the way to make ourselves globally competitive is by doing things differently. It’s about productivity improvements; about technology and applications of new ways of working; about the application of new manufacturing technologies and new manufacturing methods. And it’s probably about the innovative way in which we bring designers, engineers and manufacturing engineers together in terms of innovative working arrangements – for example, in co-located teams – and it’s about the cultural aspects of working together as well. In all those innovations, there’s a common theme in terms of doing things differently.”

InterviewIain Gray

17

“One of the things that has been most exciting – and challenging

– is how technologies in one sector can actually be moved

across into other sectors

“

The Government is strongly recognising the role of manufacturing and is really looking at ways and means by which it can demonstrate that

“

“


January’s competition is one example of such activity. “It’s part of a continuing theme in terms of the support of high-value manufacturing and it’s another exciting opportunity for manufacturing businesses to collaborate with each other,” he explains. “One of the things that excites me is when you see one manufacturing technology going into another sector and I think in the competition, the opportunity to do that is very good.”

Another area within which Gray believes the TSB can have strong sway is that of skills. “Our organisation isn’t specifically addressing the skills need,” he acknowledges, “but it’s very much influencing it, in terms of pointing to the skills needs of future manufacturing products and new methods. It’s about influencing the shape of the skills that we need for the future by helping to develop R&D projects. It’s about having programmes that can employ people that develop new skills. And it’s about things like the Knowledge Transfer Programme that will help to transfer knowledge from higher education institutes into small manufacturing businesses as well. While we’re not addressing skills directly, I recognise skills as a hugely important issue. Our role is partly about influencing that agenda.”

Some suggest that UK manufacturing has fallen behind on the global stage and I am curious to hear Gray’s take on that opinion. “I don’t subscribe to the view that we’ve necessarily fallen behind,” he insists. “I subscribe to the view that what we’ve not done is communicate to people the changing world of manufacturing. A lot of people’s perception of manufacturing in the UK has been very much based around the old traditional manufacturing sectors. And we’ve not always been good at telling people that the world of manufacturing has changed, so they think of manufacturing as negative.”

They say enthusiasm is infectious; and it is this, combined with Gray’s propensity for forward thinking, that will surely help to fuel a new momentum in manufacturing nationwide.

Interview Iain Gray

19

1979: Engineering Science degree, Aberdeen University

1989: Masters in Philosophy, Southampton University

1997: Director of Future Programmes, Airbus

1999: Director of Strategy and External Affairs, Airbus

2004: Managing director and general manager, Airbus

2007: Awarded Royal Aeronautical Society gold medal; appointed chief executive, Technology Strategy Board

Biography Iain Gray

Our organisation isn’t specifically addressing the skills need, but it’s very much influencing it, in

terms of pointing to the skills needs of future manufacturing

products and new methods

“

“

Sustainability – triple bottom line of economic profitability,

respect for the environment, and social responsibility – may be the buzzword of corporate annual reports, but many UK manufacturers are sidelining implementation and missing out on its benefits. So concludes a study by Arup and Warwick University. And the chief reason, says Dr Kerry Mashford, Arup’s head of sustainable manufacturing and construction, is a basic misunderstanding of the principles: “The majority perceives sustainability to be synonymous simply with climate change.”

The reality, says Dr Mashford, is taking issues like climate change, environmental protection and recycling, and turning them into business opportunities that differentiate companies from their competitors: “The firms that are doing this are seeing real benefits.”

And in a call for manufacturers to make a commitment to sustainability, David Wright, chief executive of MAS West Midlands, says “many only see it as an additional cost – this is simply not the case.”

The Saint-Gobain Glass (SGG) plant at Eggborough, east Yorkshire, is a role model for the Wright/Mashford argument. Opened at

the start of the decade and with a 200 payroll, it has a notably strong performance in the areas of waste reduction, minimisation of C02 emissions, and use of recycled glass in the manufacturing process – in which it is sector leader. SGGUK came eighth in this year’s Sunday Times 50 Best Green Companies list, also winning the Sunday Times national award for training and motivation of staff on environmental issues.

Green laurels indeed, but says site director Dr Alan McLenaghan, sustainability is largely a matter of good business: “If you do it because you want to be green you won’t do it for long. You are doing it for the wrong reasons. If you are doing it because it makes some sense for your business, you’ll keep doing it.

“We reduce waste because it makes sense for our business; we use other people’s broken glass

Manufacturing sustainability means good business as well as good citizenship, reports Colin Chinery. But is the message getting through?

the greenReaping

benefits

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Ford’s Dagenham Diesel Centre (DDC) has been a leader in green manufacturing since it was built in 2004, last year winning a national excellence award singling out its comprehensive environmental efforts, including reducing CO2 emissions through wind energy, facility energy efficient improvements, reducing waste and using green materials, and a fuel efficient product line-up.

DDC is powered totally by renewable energy, using two onsite wind turbines producing seven million kWh of power. “As a result Dagenham avoids approximately 3,000 metric tonnes of CO2 a year,” says Andy Taylor, director of sustainability, Ford Europe.

“Next year we are adding a third wind turbine to remain 100 per cent wind powered following the installation of a new 1.4/1.6-litre Duratorq TDCi engine line. This third turbine has the capacity to produce 3.5 million kWh of green electricity – the equivalent of powering 1,000 homes.” Parallel with this, gas and electricity bills have been cut by 12 per cent through energy efficiency actions such as optimising energy-intensive operations.

Dagenham has also prevented more than 12,600 metric tonnes of waste being sent to landfills for disposal, via waste reduction and increased recycling. Metal filings and other waste from the machining process for example, are squeezed dry of lubricants and sold as briquettes for recycling.

The plant’s manufacturing processes use green materials, green vegetable oil for metal working and other fluid actions for example, reducing the use of oil and other lubricants. In addition, coolant consumption has been cut from 350,000 litres in 2003 to 204,000 litres last year.

And sustainability is taking to the roads – and making some unlikely partners – with grocery think tank IGD’s online toolkit to help manufacturers.

The sustainable distribution toolkit includes a guide to consolidated distribution and a savings calculator – an interactive tool which can be used to reduce road miles individually or by assessing the viability of shared transport resources. The aim is to reduce the environmental impact of transporting food and groceries in Britain by taking 900 lorries off our roads – equivalent to 53 million miles.

Other functions include a transport collaboration guide and a sustainable transport roadmap designed to help food manufacturers identify potential partners in their area. “Through ECR, Nestlé was able to identify that United Biscuits was running empty trucks from close to Nestlé’s factories in the north to the Midlands,” says

Leadstory because it makes sense for our business, and we produce products which save energy or water or air conditioning – we can go on and on – because that’s what people want. And that’s good for business.”

The company uses five times more recycled glass in its manufacturing than any competitor. Every tonne of recycled glass heated in the furnaces saves 1.2 tonnes of raw material being quarried. The firm uses 3,000 tonnes of waste glass every month. An environmentally enthusiastic workforce also helped reduce waste from 7,000 tonnes in 2001 to 1,500 tonnes in 2008.

Other key achievements include a reduction of waste sent to landfill of 75 per cent in just six years, a 12 per cent increase in the amount of waste recycled in the last 12 months alone and the lowest C02 emissions of any flat glass plant in Europe. In addition, SGGUK makes 28 per cent of its product from recycled cullet (glass) – more than any other glass producer.

The industry has an excellent record in the recycling of container glass; not so flat glass. But in 2001 Eggborough took a lead, pioneering a system of picking up broken glass from the customer and returning it to base using modified, back-loading vehicles. As a result, customers who were paying for land filling can now dispose free of charge.

“We’ve reached the point where any glass you buy from SGGUK now contains 30 per cent recycled glass.” And the Saint-Gobain example is catching; many customers are now bringing back recyclable material from their customers.

“When old windows are removed they mostly go to landfill. But the forward-thinking guys will take them back to their depot, sell the glass back to SG, the aluminium to the aluminium supplier, and begin to generate revenue from the waste,” says McLenaghan. “As a result, many customers have moved from something that was costing them £30 a tonne, to something giving them £30 a tonne.”

In addition, SGGUK customers are provided with simple rules and guidelines on how to keep the glass free from metals and ceramics, while at Eggborough, sorting mechanisms and metal detection systems were developed to remove even the minutest contaminant. “We make glass, but we are now making money out of our waste stream.”

Mike Jones, MD of British Gypsum, winner this year of two major construction sector sustainability awards, says Britain’s leading supplier of plaster, plasterboard and dry lining systems takes a holistic approach to waste.

“We use our expertise to design systems that reduce the amount of waste generated, taking the onus of managing any waste that is produced off the shoulders of the client.

“Our approach not only reduces cost for the client and provides data to support their ongoing waste reduction programme, it provides spin-off benefits including improved site safety, reduced landfill, and preservation of natural resources, as we are now feeding up to 18 per cent recycled material back into our production processes.”

21

Through ECR, Nestlé was able to identify that United Biscuits was running empty trucks from close to Nestlé’s factories in the north to the Midlands

“

“

I G D president

and Nestlé UK CEO, Alastair

Sykes. “If you had said to us in the beginning

that we would be sharing the same delivery vans as our direct competitor, I would have laughed.”

Now United Biscuits trucks collect product consignments each day from Nestlé’s factories in York and Halifax, delivering them to the Midlands while, says Sykes, “generating significant environmental and cost savings.”

Previously Nestlé UK would deliver over 15 loads a day from its factories to its distribution centre, but with 20 per cent untied to a return journey, two or three trucks would return empty.

Yet among many companies there’s a perception that sustainability doesn’t make business sense, says EEF environmental advisor Vanessa Fandrich.

“On cost reasons, for companies to get involved, there has to be a business case. This is often a perception issue, and here we find an information-knowledge market failure with companies not always taking full account of their environment and costs. This is because they do not know to measure – and if you don’t measure these issues you can’t manage them.”

In measuring environment and costs, companies can obviously look at their energy bill and their waste disposal costs, says Fandrich. “But this will not take account of many aspects of what might be called the hidden environment – items such as materials, processes, the labour costs of re-working, energy used when not needed and machinery not working efficiently.

“Companies that have identified the need to measure more closely what’s going in and out of their processes have identified the most cost saving opportunities.”

And cost saving is a core issue, with the landfill tax for example, increasing waste disposal charges very significantly over the last two years, and energy prices a major issue.

But measuring must be operation specific – “not just the energy costs of a factory but rather of each

separate process. This should lead very quickly to the identification of opportunities,” says Fandrich.

“An energy survey for example might reveal 20 per cent unaccounted for. And it’s not just about reducing your own impacts, but also developing products and services to aid other businesses and consumers to make a transition. We very much see a market for more efficient products.”

Nor does resource efficiency stop at the factory gate. “It’s also about looking up and down your supply chain and working with your customers. We are seeing more and larger companies in particular using their procurement process to drive innovation through their supply chain.”

She agrees that much of sustainability is about business improvement, with the environmental benefits as a consequence.

“A lot of companies will implement very specific environmental programmes. You might not do it with a ‘green’ mind, but there are a lot of simple business improvement processes that will have environmental benefits.”

Lancashire furniture maker HJ Berry of Chipping, near Preston, makes high quality tables and chairs for the UK’s commercial and retail sector – 1,500 pieces a week.

Since 2005 it has been working with MAS North West, resulting in dramatic improvements in productivity and reduction in waste. But the collaboration has also included a continuing programme to find environmentally friendly alternatives for all processing and cleaning, lubrication, packing and communication materials, as well as separating out waste into renewable, recyclable, compostable and burnable materials.

Wood shavings, chippings and sawdust and other waste wood provide all heating and hot water for the factory, its drying kilns and drying tunnels. As a result, heat is generated from the current carbon cycle rather than from the burning of fossil fuels. Electricity is also sourced from renewable sources.

More than 95 per cent of the temperate hardwood used in production is sourced from the UK’s managed woodlands. And for every four chairs that are bought, the company plants a tree. “We believe all human activity should be in harmony and sympathy with nature. Our goal is to be an ecologically sustainable, environmentally beneficial and non-polluting business,” says chairman, Andrew Berry.

MAS activity across every region has broadened beyond shopfloor lean towards a greater understanding of what David Wright calls “Manufacturing with a Big M” rather than just the production process.

“Many of these technological improvements we’ve been able to help people access and realise contribute to the sustainability agenda.”

Wright cites an example from the ceramics industry. “Two years ago we helped a company whose main reason for inviting us was an ongoing quality problem. It turned out that the root cause was poor control

22

A lot of companies will implement very specific environmental programmes.

You might not do it with a ‘green’ mind, but there are a lot of simple

business improvement processes that will have environmental benefits

“

“

at this plant, but this is because we’ve been recycling cullet, and we’ve been recycling cullet because it makes good business sense, not because we’ve sat down and said, how do we reduce our emissions by 40 per cent?”

McLenaghan has some sympathy for manufacturers seemingly resistant to the challenges and opportunities of sustainability. “There are times when there’s enough on managing on a week-to-week basis without worrying about what might seem issues for the future. And when you put them in priority I can understand that they don’t stack up that well.

“But this is probably because they are looking at sustainability as a necessary evil that has to be solved here and now. Instead they should be looking at it to see if there is a way to make it cost neutral or cost positive. And if so they should be doing it.”

He recalls outlining SGGUK’s return of broken glass concept to a customer losing £100,000 a month, pointing out it would put £6,000 of SG money in to his business, with a total saving of £8,000 to £10,000.

“He told me, ‘look I’m losing £100,000 a month and a £10,000 solution isn’t what I need.’ I remember thinking; if you are waiting for one £100,000 solution you will be dead in months. You need to find 10 of these little £10,000 ones, and I’ve just given you one on a plate and I can’t believe you are ignoring it.”


of the kiln through the firing process. And in solving the process problem the company noticed a massive improvement in its energy costs.

“Now, at the time the value added impact on the company would have ticked against the quality box, not necessarily as a sustainability project. But sustainability isn’t something to be done ‘instead of’, it’s something that comes as a consequence of and complementary to other business improvement activities.”

Virginia Seaward, head of operations at Boss Design of Dudley, a market leader in the UK seating industry and a major player on the international scene, agrees.

Sustainable Manufacturing award winner at this year’s The Manufacturer Awards, Boss Design uses environmental monitoring and measuring as an indicator on business success alongside KPIs and financial indicators.

“Our journey into sustainability and environmental issues was never viewed as a tick in the box, and often that can be where others get it wrong.”

Seaward distances herself from the view that an environmental ‘feel good’ factor is a lesser driver than the knowledge that sustainability can lower costs, increase competitive edge, and increase profits and market share.

“My opinion is that the feel good factor is an important driver to the workforce. The intention to increase profits should not be the driver for applying a robust sustainability plan, but an active plan to lead in the market place and gain market share, if done with responsibility and dignity, is in my opinion acceptable.”

SGGUK’s Alan McLenaghan demurs. “My number one point to manufacturers who are not taking sustainability seriously would be that they are not managing their business properly – and I don’t mean the carbon footprint.

“If I’m honest I’m not interested in carbon footprints and CO2 emissions and so on. I am very interested in the environment, but I don’t think that’s the way to go about it. We’ve reduced CO2 emissions by 40 per cent

Lead story

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My number one point to manufacturers who are not taking

sustainability seriously would be that they are not managing their

business properly – and I don’t mean the carbon footprint

“

“

With export sales increasing by 7.5 per cent in the three

months to July 2008 and with increased trading inside and outside the Euro zone, there is a popular theory that exports are – or should be – booming as a result of the sterling’s fall.

Unfortunately, this peak in exports has not been reflected in the experiences of British manufacturers. Recent government statistics show that output in the UK manufacturing sector fell for the sixth consecutive month in August, recording its longest period of decline for 28 years.

In such circumstances, British manufacturers can ill afford to be complacent. The issue goes far beyond exchange rates – but opportunities are not as sparse as they may seem.

As the chair of the Institute of Export and International Trade, which plays a key role in supporting British businesses of all sizes to expand overseas, I am acutely conscious that businesses involved in international trade have felt the ramifications of the global credit squeeze far beyond the fall in the sterling’s value.

The Institute is Britain’s leading non-governmental, not-for-profit organisation dedicated to equipping businesses with the necessary knowledge and expertise to build a sound international reputation. It also provides a focus for staff development in the complex areas of global commerce, including financial and legal issues, intellectual property, distribution and marketing.

In recent months, the market’s volatility has been something of a double edged sword for exporters. The prices of imported goods and raw materials have risen, driving up costs, while the fall in consumer confidence and spending power has depressed market demand.

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In recent months, much has been made of the decline in the sterling’s value on the international currency markets, and its implications for UK exporters. Lesley Batchelor, chair of the Institute of Export, discusses

silverbulletWhy falling

exchange ratesare not a

Leadership & strategy

A large proportion of British manufactured exports are ‘high-end’ goods: they are not competing with bargain basement products that can be produced overseas. They range from luxury foods and clothing, to precision engineering and renewable energy technology.

In theory, the lower exchange rate position has made the product more affordable on the shelves Stateside and elsewhere. In reality, a host of other factors has meant that the expected benefits of this have not materialised. Falling consumer confidence across the world has seen the demand for cheaper, mass manufactured products boom; meanwhile, the credit crunch has pegged back corporate investment in new technology and expansion, which in itself further depresses consumer spending.

The overall picture is positive. Both EU and non-EU exports of goods are growing and the current volume of trade is now higher than at any point between 2000 and 2005. David Miles, the chief UK economist for Morgan Stanley, has predicted that Britain is due for a period of “negligible growth, rather than protracted falls in output”.

However, while exports are more affordable with regard to retail and wholesale prices, it should be remembered

that consumers in other countries are feeling the pinch every bit as much as in Britain. This means that the fall in the purchasing power of overseas consumers is undermining the benefits that have resulted from the declining value of the sterling.

And revised exchange rates bring their own challenges for manufacturers: the prices of raw materials and imported components are likely to remain higher than 12 months ago. My advice? Plan a business model that can operate with higher costs before your goods get to market.

The broader – and extremely important – issue is the competitiveness of our economy, which goes far beyond the exchange rate. Anyone hoping that the sterling’s fall heralds a new age of British manufacturing success may be in for a shock.

In a recent World Bank report, the UK fell to 27th in the global rankings of how easy it is to trade across our borders. This puts us behind nearly all of our key trade competitors including Germany, France and the USA. In only one area – the ease of closing a business – did the World Bank find Britain to have improved its competitiveness.

Britain is at the forefront of international manufacturing markets, precision engineering, green technology and more. These are all sectors with potential for huge growth in decades to come. Unfortunately, we risk losing our competitive advantage because we are still failing to grasp the complexities of international trade, which go far beyond the sterling’s value.

Too many British businesses don’t prepare adequately and fail to fully understand all the components of an export deal, particularly the complex, internationally recognised documentation that supports the payment mechanisms.

The processes differ vastly from those invoked when moving internal cargos across the UK, or trading within the EU. The risks lie with the more exotic markets. If they don’t already, UK manufacturers looking to expand their export ambitions should approach deals with an international outlook. This means using internationally recognised terms and conditions linked with financial processes, which many bosses will not be familiar with as they are not normally used in the UK.

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“In recent months, the market’s volatility has been something of a double edged sword for exporters. The prices of imported goods and raw materials have risen, driving up costs, while the fall in consumer confidence and spending power has depressed market demand

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to be unfit for purpose. There was no contract in place, no legal terms of payment and an exposure of more than £100,000 to the UK contractor. Had they known about the risks in advance, they could have protected themselves properly.

This example is indicative of the wider challenge facing businesses, namely the prevalence of false assumptions about overseas markets. Too many companies fail to research their customer sufficiently, and many cultural issues are routinely overlooked.

When bosses fail to develop a global strategy for international sales, they often take on high levels of risk in the belief that certain markets will yield success. However, many companies fail as a result of over-ambitious plans. Between 2006 and 2007, more than 1,000 fewer businesses were involved in exporting. I suspect that with the financial markets in a prolonged state of turbulence, many of those companies will have folded.

It is crucial to ensure that your website, supply chain and finance arrangements are right. When planning an export operation, it is essential to implement a robust plan and utilise the latest available market data. Use all the services out there – UKTI has commercial staff posted across the world who can provide in-market information and yet many companies don’t know they exist. While many businesses perform well in some of these areas, few get it right across the board.

Recognising the need for greater education and confidence, the Institute of Export and International Trade recently launched a new business membership programme, which has been designed to improve company-wide knowledge of international trade issues based on a belief that real competitive advantage lies in competence and that commercial power, especially negotiating power, is underpinned by a sound basis of knowledge.

One of the challenges for the Institute – and indeed, for all support organisations involved in international trade – is to make sure that in these challenging times, Britain’s manufacturers lead the way and reap the associated benefits.

I would add that freight forwarders – companies which transport goods around the globe for international trade – are really helpful, but you cannot substitute their role for the real knowledge needed to negotiate a successful deal and most importantly, to get paid.

For example, many companies assume that the USA, India and China should be their top target markets because of their size – overlooking the fact that the EU is a far more successful market for British companies. As the purchasing power of most of the developed world has fallen, with consumers everywhere facing escalating food and fuel prices, the ability to select and target the right markets is more important than ever.

Recently, the Institute received a call asking for advice with regard to a consignment of manufactured goods bought and shipped to Nigeria, which had been found

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Too many companies fail to research their customer sufficiently, and many cultural issues are routinely overlooked

“

“

Too many British businesses don’t prepare adequately and fail to fully understand all the components of an export deal, particularly the complex, internationally recognised documentation that supports the payment mechanisms

“

“



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In tough economic conditions, businesses have to maximise their resources.

Invariably that means getting the same – and sometimes more – out of fewer people.

Managers and team leaders will be looking for higher productivity. But how do they achieve it? Most will assume that motivational programmes, extra training, financial incentives and so on are the answer. In reality, these methods just tinker at the edges and are unlikely to deliver results, simply because they are imposed on the workforce.

For example, the key problem with training is that it is not sustained and it doesn’t take long for old habits to creep back in and for you to forget the vast majority of what you were told. Training is also impersonal, full of examples of other people, not you; so you have to adapt what you are told, to interpret it to suit your own situation and behaviour.

Jamil Rashid of JARA explains why manufacturers should consider a radical shift in management approach, especially during testing times

Vision, visibilityandinvolvement

The question is, will you interpret it correctly? Finally, training encourages a focus on tools and techniques and is unlikely to lead to a genuine change in behaviour.

So, which methods will work?It’s important to remember how anxious people feel when they know business is tough, sales are down and costs are going up. And if there have already been redundancies, they’re likely to be feeling insecure and vulnerable about their own financial prospects.

So now, more than ever, leaders must make sure that people understand where the business is heading, what its vision is. Vision isn’t the preserve of CEOs – leaders at all levels need to be able to express their vision clearly and in detail, from the macro vision of strategic direction, all the way down to micro vision statements for individual projects.

Employees should be confident in saying: “I can see a clear plan going forward”, “I can see how the management team intends to make it happen”, “I can see where I fit in to that plan” and “I can see everyone doing the same things, working hard towards achieving the goal”.

You’ll then start to inspire confidence because there’s a high degree of visibility. You’ll also promote stronger team working – people don’t normally want to let others down. And you’ll get them out of the heads-down-keep-a-low-profile mentality that will stifle any productivity.

This is a good place to start, but the only effective – and long-term – way to get more out of your team is to involve them, because people will never take true ownership of the change that is necessary unless they are genuinely involved.

Yet true involvement – enabling people to create their own solutions to the problems the business faces, as a result of their own analysis – is rarely found.

When asked, most leaders will naturally say that they involve the workforce. Unfortunately, these are the same leaders who are likely to complain that their staff are not taking ownership! Involvement is so much more than letting people know what’s going on and allowing them to act on their own initiative. It’s also more than asking them for their opinions about your ideas or plans: people must be given the freedom to formulate their own actions, based on their own analysis and, crucially, this has to happen in an environment that requires extremely close management control so that outcomes are not simply left to chance.

That’s why achieving real involvement is a difficult thing to do – it’s very hard to maintain control without instructing people. Leaders must therefore learn the skills that will enable them to lead without dictating, and that means not only changing fundamental behaviours but measuring them.

So what do leaders need to learn?How to prepare for your teamYou need to have a high degree of clarity about how to achieve the vision if you truly want to involve them. Really thinking through what you would do, and why, allows you to better judge whether the team is really suggesting something that you can’t live with. The irony is that you must approach team workshops with a solution in mind, but be prepared to accept that it is not necessarily the complete or correct solution. A good leader would rather the team owned the solution and do what they think is right, rather than what the leader wanted.

How to get your team to create your strategy and the measures that will determine its success or failure To truly own the strategy, the team need to see and feel the pain of developing it for themselves; then they will appreciate their own and other’s work more and really want to make it happen. They need to analyse,

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question and challenge the current strategy for themselves, and if they come up with a version that you can’t clearly define to be wrong, you must be prepared to run with it. Then you need to learn how to get them to truly involve, in turn, their own people in creating and genuinely buying in to lower level strategies.

How to measure your own behavioural change For instance, if you know you need to stop ‘running your team over’ in meetings, you have to set a measure against which to assess your actual performance. You also need to try and understand why you do it, what situations make you do it and how to get some rules in place that will stop you doing it – you’ll never truly involve your team if you don’t.

How to create the ‘rules’ of involvement – and ensure both you and your team stick to them and are measured against themFor example: all key activities must show clear links to strategy; all key decisions are based on hard data and analysis (not assumption and ‘gut feel’); all key activity must be planned in detail (to answer why, what, how, output). Many companies have informal rules such as these, but do they really stick to them? Yes, it’s tough, but try to create a culture that will always allow people to point out when a rule has been broken, and make sure you live by those rules yourself.

None of these skills are easy, they take a long time to truly learn and need sustained effort in real life situations. But the prize that genuine involvement offers is valuable indeed: a culture in which it’s OK to challenge – even to be wrong, to fail – and in which nobody is threatened, because it’s all within a defined structure with clear rules. What you have then is an organisation that has the capacity to change, whose people are used to their full potential and which is much better placed to weather whatever the economy has to throw at it.

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Increasing productivity through managed involvement

Fareham-based Meggitt Avionics (MAv) – part of Meggitt plc – designs and manufactures flight deck avionics, data acquisition systems, instrumentation and life support equipment

Following a previous downturn in sales, MAv needed to increase productivity across the whole operation. Bernie Stevens, general manager, focused on getting as many people as possible, across all departments, involved in finding solutions; reviewing existing processes and designing their own new ways of working better, rather than having new working practices imposed on them. He created a specific structure and set of rules within which his teams should formulate their ideas and solutions. Every senior manager was challenged to develop high levels of visibility about their sphere of control which clarified what everyone needed to do and how these activities linked together to improve productivity.

Across the business, teams worked on their own issues by operating within the defined framework. The supply chain department looked at their purchasing practices, operators in the manufacturing team looked at how they were building product, the sales team looked at how they were dealing with quotes, and so on.

For example, the engineering (product design and development) team challenged the commonly held assumption that the problem of increased costs was caused largely by customers requiring frequent design changes. Deeper analysis revealed that few of the engineering programmes actually followed the defined gate review process which had been developed at significant cost. Had they used this process, the team would have been able to focus on their internal processes, adapting them to cope better with design changes, and improve their planning capability.

The team embraced a more disciplined way of working and developed a system of high-frequency, low-level reviews to check against the fine detail of project plans and ensure that component actions were completed on time.

Results:– In the last 12 months alone, top level productivity within the business

has improved by 15 per cent– The engineering team now hits more than twice the customer

milestones (25 to 65 per cent)– Overspend has been halved and is continuing to fall

Stevens comments: “It was very hard for me during this process and time to facilitate the evolution of the teams and not fall back into the ‘this is how you should do it’. At times I just wanted to jump in and move the activities on to a conclusion, but that would have been one of those ‘that’s what Bernie wants’ moments and we would gain nothing in the long term.”

PurposeFit for

30

Manufacturing experts from Barclays Commercial Bank are surprisingly upbeat about the prospects for manufacturing industry, finds Malcolm Wheatley

SpecialfeatureBarclays Commercial Bank

With the economy experiencing an undoubted

downturn, opinion is still divided as to how severe the contraction will be. As bad as 1991? As bad as 1982? Or worse?

Whatever the outcome, the impact on Britain’s manufacturing industry is likely to be significantly less than in previous downturns. “Manufacturing industry is in better shape to weather the downturn than it has been for at least a generation – if not longer,” observes Nick Brayshaw, Birmingham-based chairman of the manufacturing strategy board at Barclays Commercial Bank, the business banking arm of the global financial giant.

It’s a view – albeit a reassuring one – that may come as a surprise to some. And yet, he believes, the

facts are incontrovertible.

“Bald statistics showing that manufacturing industry represents an ever-smaller

proportion of the British economy disguises the transformation that has

taken place,” argues Brayshaw. “Although the UK’s manufacturing

sector is about the same size as it was 10 years ago, there’s

been an enormous change in its composition. Less

competitive manufacturing businesses have closed

down or shrunk, while others have

actually prospered and grown.”

And the transformation has its roots in the move to globalisation that has taken place over the last 10 to 15 years, explains Ray O’Donoghue, head of manufacturing from Barclays Commercial Bank, and the bank’s Midlands corporate director. It’s not difficult, he says, to spot sectors of the manufacturing industry that have been adversely hit by the emergence of low-cost overseas economies. Textiles, shipbuilding, tableware, footwear – several sectors with roots that stretch right back to the Industrial Revolution have seen a huge retrenchment.

But less visible, he points out, has been the quiet success with which other sectors have coped with the threat, and have even gently prospered. Aerospace, food and drink, electronics, pharmaceuticals – individual companies’ employment levels may in some cases be lower, thanks to dramatically improved productivity levels, but output levels have grown at a steady one or two per cent a year. What’s more, the emergence of new environmental laws and initiatives have seen a resurgence in once-moribund sectors such as instrumentation, while wholly new sectors such as biotechnology and robotics have emerged.

And in parallel, points out Brayshaw, manufacturers as a whole have embraced initiatives like lean manufacturing – and related quality and continuous improvement initiatives – with a zeal bordering on messianic. Middle and upper management, too, are better educated, better trained, and keen to innovate and improve.

“Manufacturing industry has upped its act,” he argues. “The calibre of British manufacturing management is better than in the past, globalisation has brought global best practice in its wake, and the simple fact of the matter is that British factory floors have undergone a sea change. Factories that a decade or so ago were over-manned, characterised by archaic working practices and stuffed with inventory are today lean, mean and comparable to the best.”

There’s also, he adds, been a similar sea change in terms of manufacturing industry’s perception of itself, and its core competencies. The words ‘manufacturing’ and ‘production’ used to be synonymous, he points out – an identity of meaning that no longer exists.

“UK manufacturers have been pretty smart in deciding to focus on optimising the value chain, rather than on just production,” he notes. “Increasingly, they’re outsourcing and off-shoring the labour and capital-intensive aspects of their business, and concentrating on the high added-value activities that leverage their intellectual property.”

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“UK manufacturers have been pretty smart in deciding to focus on optimising the value chain, rather than on just production

“

In other words, he explains, a manufacturer might major on product design, R&D, aftersales service and brand development, but limit their involvement in the actual task of production.

Heresy? Hardly. In fact, it’s difficult to think of a major global electronics and computer manufacturer that isn’t already pursuing this strategy, observes Brayshaw – adding that some of the resurgent British manufacturers he sees are the former UK-based factories of such companies, now re-cast as successful contract electronics manufacturers, which are bidding for – and winning – contracts on the global stage.

In short, sums up O’Donoghue, UK manufacturing industry is a very different animal to what it was in past downturns. Large, unproductive and ultimately uncompetitive companies have shrunk or disappeared, while nimbler small- and medium-sized businesses have taken their place. And right at the top of the pile, the roll-call of Britain’s industrial giants still contains names redolent of a rich industrial past – think aerospace, pharmaceutical and household goods, for instance – but those giants too are newly-invigorated.

Put it altogether, and what emerges is a very different picture of the prospects for UK manufacturing industry. “Manufacturing industry enters 2009 – and the economic downturn – in a globally competitive state,” argues Brayshaw. “That’s a new development, and one that is sharply at variance from previous downturns.

“Manufacturing has competed for a decade in an increasingly global market, and has survived,” he stresses. “And there’s no doubt about that: across the country, companies are buying from, selling to, and dealing with the low-cost economies. The upshot? We’re entering the downturn with a manufacturing sector that is globally competitive as never before – and that simply hasn’t been the case in previous downturns.”

At which point, interjects O’Donoghue, it’s possible to look to the future, and see a UK manufacturing industry that might emerge from the downturn in even better shape. For a start, he notes, UK manufacturers possess one critical advantage lacking in many of their overseas counterparts, especially those in emerging economies – prior experience of dealing with downturns.

“Experience of dealing with adverse economic conditions, and in making the necessary adjustments and decisions that are required in order to respond effectively, is a skill set that these days comes naturally to British manufacturers,” he says. “Overseas manufacturers, in economies that have been growing at up to 10 per cent a year, have become conditioned to growth – and won’t be able to respond as nimbly. To that extent, it’s an opportunity for British manufacturers to catch their foreign competitors off-guard.”

And Barclays has some specific advice to manufacturers as to how to formulate that response, adds Brayshaw. Advice, needless to say, that the bank can back-up with a full range of finance, help and support services. “We’re always keen to support our manufacturing clients,” he stresses. “Despite the credit crunch, some are doing very well right now, and we’re keen to see that number grow.”

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The emergence of new environmental laws and initiatives have seen a

resurgence in once-moribund sectors such as instrumentation, while wholly

new sectors such as biotechnology and robotics have emerged

Ray O’Donoghue

Firstly, he advises, manufacturers should once again – if they haven’t already done so – review their value chains in order to identify ‘core’ and ‘non-core’ activities. If it is a while since they have done this, he says, it’s very possible that some strategic adjustment may be necessary.

While such a review might typically result in opportunities to outsource non-core activities to low-cost specialists, he points out, it’s also perfectly possible that such a review might involve taking activities back in-house. In the present climate, for instance, where closeness to customers is particularly important, having aspects of distribution or aftersales service going through third-parties might not be such a good idea.

Second, he adds, it’s time for manufacturers to take a fresh look at their brand, and leverage its quality and characteristics. Typically again, this is something that doesn’t tend to get done when times are good, he points out. “Take a cold, hard look at what your customer proposition is – and what can be done to improve that,” he advises.

Third, redouble efforts to find new markets. “This may sound obvious, but it’s surprising to see the extent to which it isn’t being done,” notes Brayshaw. “If you’re in an industry that supplies the construction sector, for instance, there’s a temptation to batten down the hatches and just ride out the present slump activity in the sector. But construction activity in other markets – the Middle East and parts of eastern Europe – is booming, leading to opportunities.”

Finally, advises Brayshaw, manufacturers should adjust their competitive stance so as to compete more effectively in sectors that are doing disproportionately better. As already noted, he points out, some sectors of UK manufacturing industry – and the broader economy as a whole – are consistently growing at a faster rate than others.

Deliberately positioning the business’s offerings so as take advantage of this creates something of a ‘free ride’ in terms of sales growth. “Sell into a sector that – in relative terms – is booming, and you get sucked along in the slipstream,” he notes. “Look at sectors like oil and gas and environmental: manufacturers serving these industries have done better than most.”

In short, he concludes, 2009 represents for manufacturers a situation that’s akin to the old saying about opportunities coming disguised as problems. “Except for manufacturers, that really is the case in 2009,” he insists. “The next year or so will be tough – but many businesses will come out of it stronger, tougher, and better-positioned than ever before.”

Specialfeature


Barclays Commercial Bank

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We’re entering the downturn with a manufacturing sector that is globally competitive as never before – and that simply hasn’t been the case in previous downturns

““

Nick Brayshaw

Dispelling some of the myths –

manufacturing and IP in China

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It is no secret that protecting intellectual property rights (IPR) and maintaining good product quality in China is a challenge. In recent years, the media has gone to great lengths to highlight concerns with its legal system, its apparent inability to reduce piracy and product quality problems involving everything from tainted cough syrup and toxic pet food to toys decorated with lead paint

Design & innovation

With the latest product quality scare still in the

headlines (this time involving baby milk power), and with counterfeiting still a major concern for manufacturers and consumers alike, it may take some time to resuscitate the damaged ‘made in China’ brand. This is bad news for Chinese firms and foreign ventures manufacturing in China, and it is no wonder, therefore, that companies that haven’t already made the move to China are hesitating – being unsure what to do or what to believe.

The fact is that many IPR and product quality problems (or at least those widely reported) are, in part, self inflicted and generally reflect a poor understanding of China’s legal and regulatory system, inadequate supply chain management, poorly drafted contracts and failures to register key IP.

While the legal framework for protection and enforcement of IP in China is becoming increasingly sophisticated, it is important to remember the development stage the country is in. Foreign manufacturers can protect their rights in China but must play a big part themselves in preventing the manufacture of counterfeit, pirated and poor quality products.

Addressing a number of the most commonly held misconceptions about intellectual property management in China we provide some simple recommendations for maximising commercial and investment opportunities offered by doing business in or with China, while minimising the risks.

“There are no intellectual property laws in China”Before China’s emergence back onto the world trading stage in the 1970s, the two main concepts underpinning average Chinese attitudes to personal intellectual property were Confucianism, which regarded copying as a hallowed act and the ultimate compliment to an innovator or creator; and Communist ideology, which contended that all creative and innovative works were owned by the people as a whole.

Thirty years on and China is going to great lengths to introduce laws to protect the ‘western’ concept of intellectual property in an effort to encourage foreign investment and conform to existing international treaties and conventions.

In the lead up to WTO accession in 2001, China enacted its third set of revised laws to protect different types of intellectual property including trademark, patent and

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Chinese parties see a contract as a reflection of the current relationship which will change and grow along with the relationship in future

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copyright. These laws are now widely acknowledged to be of international standard and comply with the WTO Agreement on traded-related aspects of international property rights (TRIPs).

Further revisions to the IP laws, increased resources and training of enforcement officials, more public education and greater emphasis on creating an innovative economy are currently underway in China and will help further speed up and strengthen the enforcement process required to increase respect for IP and reduce the scale of the infringement problem.

The rule of law is still a long way from reality but with a real commitment from the Government (which is taking constructive steps to promote and reward innovation) and foreign and Chinese rights owners (looking to commercialise higher value-added goods) positive change to the IP system is slowly being brought about.

“I have a patent in the UK. Can’t I use that to stop infringement in China?”As in most jurisdictions, registered IP (trademark and patent) protection is territorial – if you do not register in China with the appropriate Chinese authorities you have no rights there. Failing to register may make it difficult, if not impossible, to seek administrative or judicial assistance should problems occur.

As registering your IP rights is the most effective means of ensuring that your brand, packaging design or technology is protected, and as China is a first-to-file jurisdiction, you will need to identify and register your rights in China before introducing branded goods or services (or even earlier if possible), otherwise you run the risk of losing them to local companies that can and will register the trademarks and patents for themselves.

To ensure that you identify and obtain the strongest portfolio of rights at the earliest opportunity, consider ways in which you can work closer with internal and external R&D, production, distribution, sales and marketing colleagues and partners during initial product, brand and media design processes. The sooner you identify key rights, the stronger the brand and product protection you obtain.

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China is going to great lengths to introduce laws to protect the ‘western’

concept of intellectual property

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“


Design & innovation

As the registration process for registering patents and trademarks in China can take years to complete it is advisable to consider implementing some or all of the following steps to immediately strengthen your IPR position.

Copyright subsists upon the creation of a work, and although registration is not required for protection per se it is wise to record key copyrighted works with China’s National Copyright Administration (NCA). This will help you to establish evidence of ownership should enforcement actions become necessary.

Also, take steps to document the use and promotion of your brands and/or products in China from the moment they are introduced or manufactured in China so that you have the evidence, if infringement occurs, to show that your goods are ‘well-known’ and were first in the market. It is easier to retain this information than to search for it once there is infringement and time is of the essence.

Finally, to ensure that you haven’t missed any additional opportunities, conduct regular audits of all your global IP assets (including Chinese internet domains such as ‘.cn’ and ‘.com.cn’) to assess where there might be gaps in your overall protection.

As with any investment, the costs associated with registration of your IP rights should be balanced with the level of risk your IP is likely to be exposed to, given your particular business in China today.

But remember, even if you are not doing business in China now, businesses in China are watching and doing business with you! Register your rights early!

“We don’t spend much time on detailed contracts or supplier audits in China as we know they can’t be enforced”Ensuring that you have rights in place is a must (without them you cannot do much) but managing them, your contracts and your supply chain carefully is the single most effective way of preventing IP infringement and ensuring good quality.

A strong contract forms the basis of any legal relationship. In China, from an IP perspective the contract is critical, as it sets out explicably the obligations and expectations of both parties.

Although the legal system in China is still trying to catch up with the pace of economic development and Chinese companies are still coming to terms with the legal obligations associated with signing a contract, the situation is improving.

Chinese parties see a contract as a reflection of the current relationship which will change and grow along with the relationship in future. But they will understand the express obligations to which they agree.

Taking a proactive approach to IP management in your internal operations can also mean developing IP compliance audit procedures as part of due diligence

before selecting partners, or during regular quality assurance and social compliance audits to highlight particular shortcomings, and to identify remedial measures if a business relationship is to proceed or continue.

The first step generally starts with the IP owner and a review of the contracts in place with suppliers and what provisions are made in the agreements for IP control, if any. Just as important is a review of whether the IP-relevant procedures have actually been implemented by staff.

Following that, a comprehensive assessment of how the supplier handles key IP issues such as auditing of production, control of sub-contractors, restricting access to the IP holders’ confidential information, confidentiality clauses in employee contracts, return of design drawings and tooling and disposal of surplus or waste product should be made.

The aim is to assess the awareness the supplier and its key staff has for IP in general, including its awareness of the IP owner’s IP rights and awareness of its contractual obligations. It is also important to find out whether the supplier also manufactures competing products of its own or for other clients, whether it uses outside sourcing agents and sub-manufacturers to fulfil orders and whether it has a good IP track record.

Careful preparationChina recognises that counterfeiting and poor quality products threaten the reputation, goodwill and profitability of the country and the local business environment and is taking steps to strengthen the existing legal framework in order to develop a modern, innovative and law-abiding economy.

With an increasingly skilled and motivated workforce, good infrastructure and growing appreciation for good IP protection and quality control measures China continues to offer foreign manufacturers improving technical know-how, government-supported R&D, a growing middle class and significant economies of scale.

The companies that will benefit most successfully from manufacturing in China are those that rethink their attitudes to China and to IP and come with a carefully prepared and well thought-out strategy.

37

Take steps to document the use and promotion of your brands and/or products in China from the moment they are introduced or manufactured in China, so that you have the evidence, if infringement occurs, to show that your goods are ‘well-known’

“

“

Let’s be clear on this – there’s a difference between

‘doing’ lean and ‘embracing’ lean. The former suggests piecemeal actions that are taken to fire fight problems or issues within the company which, if implemented with the appropriate gusto, is fine in the short-term, but difficult to sustain in the longer term due to the lack of a co-ordinated strategy. The trouble with only concentrating on ‘islands of improvement’ is that a company’s culture will never really change and, subsequently, the same issues inherent in one area are likely to remain in another. Truly ‘embracing’ lean injects best practice manufacturing tools and techniques into the whole company and in making small but frequent improvements – continuous improvement or kaizen – reforms and regenerates the business, bringing tangible benefits to the bottom line.

I continue to come across companies who are desperate to implement lean techniques into their manufacturing operations which, at first glance, is great. They know what lean is and they know that it will benefit them. Fine, but many struggle to get to grips with what is

38

changeCulturalToby Arnold of Lean Business Solutions, MAS Y&H Practitioner, reveals how companies are diversifying from lean to continuous improvement

Worldclass manufacturing

actually needed, while others introduce elements of lean quite successfully, with short-term improvements in productivity levels and waste elimination, but then struggle to sustain the good work completed and soon slip back into bad habits, and others often find it hard to replicate their small successes in other areas of the company and so allow overall performance to be pulled down by the organisation’s weaknesses.

One company that MAS has helped along the continuous improvement journey is Pegler, a leading manufacturer of advanced plumbing, heating and engineering products. With an annual turnover of £60 million, Pegler is one of the largest employers in south Yorkshire, with approximately 530 people at its 21-acre site in Doncaster. When it comes to driving improvement within its business, Pegler would be the first to admit that over the years it had encountered more than a few false starts when it comes to lean. As so many manufacturers have done, it tried to implement lean through blanket training employees in a number of tools and techniques, and adopting the latest improvement fad, but this simply resulted in a number of ‘islands of improvement’ and never brought the sustainable bottom line benefits hoped for. As Pegler found out, adopting one or two lean tools and techniques as breakthrough activities is fine, but by not getting to the root cause of manufacturing problems and simply smoothing them over superficially, sustainability is not achieved. To maintain a lasting change, any and all improvements need to be positioned as part of a continuous improvement strategy.

Working with Pegler in reviewing the reasons why this approach had not worked, we identified the need to begin laying the foundations for a culture of continuous improvement across the whole business and to use this as a base from which to build. The key to ensuring ongoing success has been to embed lean as a requirement within everyone’s role and to ensure line management responsibility and accountability for gradually implementing the appropriate tools and techniques that support it. This approach has not been easy, nor has it been quick, changing the culture in what has been a very traditional industry.

Over the past two years, a five per cent year-on-year improvement on budgeted efficiency has been achieved and overall equipment effectiveness of the extrusion plant (equipment that is in excess of 30 years old) has improved from 62 per cent to 75 per cent. This has not been through large step change improvements – as business unit manager Barry Ward comments: “If there were any large improvements to be had we would have had them well before now.” But improvements have been achieved through many small, localised, often shopfloor-generated improvement ideas.

At the core of any continuous improvement compliant company, three activities will be prevalent. These are: innovation, continuous improvement and standardisation. Innovation is necessary to grow the business, concentrating on tomorrow’s products. Continuous improvement refines processes and improves products, and standardisation allows for best practice approaches to be maintained (that is, until a better process is found through further continuous improvement activities). The division of labour and levels

of commitment to these approaches will predicate the success of any continuous improvement strategy. For example, top managers would be expected to drive the majority of innovation, with some input into continuous improvement and less time on standardisation. Middle managers will concentrate on continuous improvement and delivering standardisation, while operators spend their time on standardisation and continuous improvement, with some small input into innovation. What is important is that time and resources are distributed and monitored so that the programme is delivered effectively.

And this is where role definition is important – everyone must know what they should be doing. Naturally, there should be space to be flexible as over-rigid structures do not foster the right working atmosphere – flexibility is necessary to facilitate market fluctuations. But a company-wide support structure is absolutely vital and should be developed through high performance HR practices. The UK Aerospace People Management Audit has indicated that adoption of such practices increase value added per employee by between 20 and 34 per cent. These high performance practices are centred largely around team working, appraisal systems, personal development plans, structured training and individual responsibility for work and quality. Pegler has restructured its manufacturing team to facilitate better communication and to foster a more joined-up approach to improvement within each of the business units, where there is now a planner, a quality engineer, a production leader, a maintenance leader and a production engineer working together as a focused team. Each role has been clearly defined and now includes detailed responsibilities for driving and supporting improvement activity. A more robust appraisal process has been developed that identifies the skills of all employees, deploys objectives through the business right down to individual level and identifies, through an action plan, the training and support that is needed to ensure achievement. If a company is to be successful, it is important that it continuously develops and improves the skills of its employees to meet ever-changing customer demands.

At shopfloor level skills matrices have been developed to help monitor the teams’ skills and to highlight both strengths and weaknesses. Each individual is rated against job skills, support skills and CI skills, from the level of untrained to fully-trained. Skills required within the business unit are also identified and areas of skills shortage are then used to inform training decisions. Considering all of this, Graham Fawcett, production director says: “We believe that we now have a structure within the business that can not only deliver what our customers demand today but will develop and improve our business for the future.”

39

“We believe that we now have a structure within the business that can not only deliver what our customers demand today but will develop and improve our business for the future

“

Our Knowledge, Your PotentialWith businesses across the

globe suffering in the

economic decline, a strong long

term survival strategy is a

must to avoid unnecessary

headcount reduction and

quick fixes.

Businesses are experiencing falling

sales, increased overheads and

the loss of clients as they seek out

cheaper suppliers or lose the battle

for survival in the credit crunch.

KM&T can not only help your

business survive, but also encourage

it to thrive, providing business

improvement solutions that focus

on reducing costs whilst maintaining

capacity… a winning strategy to

crush the crunch!

The key to keeping your head above

water is to reduce overheads and

implement efficient, effective and

profitable processes that benefit

your business while ensuring client

needs are met.

Talk to KM&T’s experienced team,

who can help you to maximise

business potential, efficiency and

value, ensuring sustainable success

in a volatile environment.

Now is the time to embrace Lean.

THERE ARE BETTER WAYS TO

CUT COSTS

KM&T UK The Techno Centre, Puma Way,

Coventry CV1 2TT

Tel: +44 (0)24 7623 6275

[email protected]

KM&T EuropeTwin Squares, Culliganlaan 1b

B-1831 Diegem (Brussels), Belgium

Tel: +32 (0)2 403 1270

[email protected]

KM&T AustraliaSuite 7.04, 6A Glen Street, Milsons Point

(Sydney) NSW 2061

Tel: +61 1300 552 453

[email protected]

www.kmandt.com

Our Knowledge,Your Potential


World class manufacturing

So far, I’ve neglected to mention measurement – not because it isn’t important, but because it is so important and merits due attention. Measurement is the first step that leads to control and eventually improvement: if you cannot measure something, you cannot understand it, if you cannot understand it, you cannot control it, and if you cannot control it, you cannot improve it. Effective measurement not only identifies where improvements can be made but also shows the results of these improvements. By understanding that knowledge is power and the need for a balanced scorecard of measures, Pegler has reviewed how it uses its metrics and has identified KPIs that are displayed within the business units on their communication and information boards. These measures include the financials, quality, cost, efficiency, people and improvement activity. BU teams use these measures to understand their processes, process issues and opportunities to continuously improve. Regular meetings around the board not only identify improvement opportunities, but also allow the team to celebrate and be recognised for the successes they have achieved.

Having the right measures can also focus the team on using the appropriate tools and techniques on their continuous improvement journey, health and safety and efficiency measures can for example be tackled through applying 5S workplace organisation techniques. By following the systematic order prescribed by 5S (sort, set in order, shine, standardise, sustain), realistic and sustainable improvements can be achieved. 5S audits provide a simple way to measure performance against targets, results being displayed on the communication and information board, which in turn leads to further continuous improvement activity.

As Pegler has became more passionate about its continuous improvement journey it has been keen to share its experience and so has become involved in MAS Yorkshire and Humber’s Inside Industry programme that gives manufacturers the opportunity to visit other successful businesses, benchmarking their performance and gaining insight into what it takes to succeed in a wide range of disciplines including continuous improvement, lean manufacturing, resource efficiency, workforce empowerment and manufacturing strategy. Pegler not only hosts events but also takes the opportunity to visit other companies. Shane Jefferson, business improvement co-ordinator, explains: “It is good to be able to visit other manufacturers to see what progress they are making, and to see if we can pick up any tips – there are always new ways to improve.” It is heartening to be able to say that we’re seeing more and more manufacturers visiting each other’s shopfloors, discussing what’s working for them and, importantly, what isn’t, so helping each other to make continuous improvement a way of life. This is the best way for manufacturing to stay strong – sharing best practice.

It’s a sad fact that most change initiatives are abandoned outright or fail to deliver the expected or needed results, if you really want to succeed in your improvement efforts, try not to simply think of tools and techniques – these at best will result in islands of improvement – instead, like Pegler, put your efforts into developing a continuous improvement culture, and take every opportunity to identify new ways to improve.

41

Our Knowledge, Your PotentialWith businesses across the

globe suffering in the

economic decline, a strong long

term survival strategy is a

must to avoid unnecessary

headcount reduction and

quick fixes.

Businesses are experiencing falling

sales, increased overheads and

the loss of clients as they seek out

cheaper suppliers or lose the battle

for survival in the credit crunch.

KM&T can not only help your

business survive, but also encourage

it to thrive, providing business

improvement solutions that focus

on reducing costs whilst maintaining

capacity… a winning strategy to

crush the crunch!

The key to keeping your head above

water is to reduce overheads and

implement efficient, effective and

profitable processes that benefit

your business while ensuring client

needs are met.

Talk to KM&T’s experienced team,

who can help you to maximise

business potential, efficiency and

value, ensuring sustainable success

in a volatile environment.

Now is the time to embrace Lean.

THERE ARE BETTER WAYS TO

CUT COSTS

KM&T UK The Techno Centre, Puma Way,

Coventry CV1 2TT

Tel: +44 (0)24 7623 6275

[email protected]

KM&T EuropeTwin Squares, Culliganlaan 1b

B-1831 Diegem (Brussels), Belgium

Tel: +32 (0)2 403 1270

[email protected]

KM&T AustraliaSuite 7.04, 6A Glen Street, Milsons Point

(Sydney) NSW 2061

Tel: +61 1300 552 453

[email protected]

www.kmandt.com

Our Knowledge,Your Potential

It is good to be able to visit other manufacturers to see what progress they are making, and to see if we can pick up any tips – there are always new ways to improve

“

“

MSc in Lean OperationsExclusive 2 year part time executive Masters Degree

Short Courses10 day Principles of Lean Thinking3 day Lean Leadership2 day Repetitive Flow Scheduling2 day Lean Supply Chain1 day Layout & Ergonomics1 day Introduction1 day Lean Design1 day Lean in Aerospace

Events & Annual ConferenceNetworks - TPM, Lean AccountingMentoring & CoachingLean Competency Accreditation

COURSES

‘Excellent delivery and style. Extremely useful and thought provoking’ LERC student

‘I saw lean applied from exhausts to nuclear fuel rods, to the ordnance survey. The quality of teaching is very high with subject experts attending the sessions to provide a di�erent perspective’ MSc Lean Operations student

‘Everyone genuinely wants to share knowledge. The spirit that exists between the class and the various lecturers has been �rst class’ LERC student

The Lean Enterprise Research Centre (LERC) LERC is the leading centre for lean thinking in Europe. Founded by Prof Peter Hines and Dan Jones in 1994, it set up the first ever Masters programme in lean operations in 1999. LERC specialises in applied research, teaching, knowledge transfer and mentoring. For more information, visit www.leanenterprise.org.uk or call 029 2064 7028.

Lean Enterprise Research Centre

Lean Thinking CoursesEvents, Training & Networking 2009

LERC - Postgraduate Courses Advert - Dec 2008 - con 1-3.indd 6 15/12/2008 17:03:17

The Manufacturer and the Lean Enterprise Research Centre to team up in 2009

For more information on our comprehensive range of Research Reports, please go to: www.themanufacturer.com

Cardiff Business School is one of the leading business schools in the UK (currently ranked 4th in the Dec 2008 UK Research Assessment Exercise). It has a global reputation for research, teaching and learning. A faculty of international repute, it delivers high-quality educational programmes to 2,500 students a year, 700 of which are postgraduate students. The School makes a useful contribution to both policy and practice on a local, national and international level, with research informing organisations such as the Foreign and Commonwealth Office, the United Nations, the Treasury, the Department for Trade and Industry and the Department for Communities and local government, as well as working on consultation projects for blue-chip, global firms.

LERC (www.leanenterprise.org.uk) is one of the Business School’s major research centres, founded by Professor Peter Hines and Daniel T Jones in 1994. It has around 20 staff and a track record of innovative applied research, executive education and innovation & engagement activities sauch as events, conferences and mentoring. LERC has been instrumental in the lean development of many of the UK’s and Europe’s leading manufacturing companies.

By gaining the advantage of teaming up with an academic partner such as the LERC, our Reports are set to benefit from extra depth, insight and experience.

With manufacturers today facing a wall of ever-increasing challenges, the Reports are specifically designed to provide a benchmark and official referencing facility for businesses across a broad range of topical subjects. The findings of each Report are sourced through a mixture of quantitative and qualitative and primary and secondary research, supplemented and enhanced by expert analysis, case studies, interviews and existing literature on each individual subject.

We are excited to have established a partnership with such a prestigious centre of study as the LERC, and look forward to utilising its expertise in a way that will enhance and expand the repertoire of the Research Reports and other publications for the future.

Cardiff Business School

43

MSc in Lean OperationsExclusive 2 year part time executive Masters Degree

Short Courses10 day Principles of Lean Thinking3 day Lean Leadership2 day Repetitive Flow Scheduling2 day Lean Supply Chain1 day Layout & Ergonomics1 day Introduction1 day Lean Design1 day Lean in Aerospace

Events & Annual ConferenceNetworks - TPM, Lean AccountingMentoring & CoachingLean Competency Accreditation

COURSES

‘Excellent delivery and style. Extremely useful and thought provoking’ LERC student

‘I saw lean applied from exhausts to nuclear fuel rods, to the ordnance survey. The quality of teaching is very high with subject experts attending the sessions to provide a di�erent perspective’ MSc Lean Operations student

‘Everyone genuinely wants to share knowledge. The spirit that exists between the class and the various lecturers has been �rst class’ LERC student

The Lean Enterprise Research Centre (LERC) LERC is the leading centre for lean thinking in Europe. Founded by Prof Peter Hines and Dan Jones in 1994, it set up the first ever Masters programme in lean operations in 1999. LERC specialises in applied research, teaching, knowledge transfer and mentoring. For more information, visit www.leanenterprise.org.uk or call 029 2064 7028.

Lean Enterprise Research Centre

Lean Thinking CoursesEvents, Training & Networking 2009

LERC - Postgraduate Courses Advert - Dec 2008 - con 1-3.indd 6 15/12/2008 17:03:17

From January 2009, The Manufacturer will be entering into a unique partnership with the Lean Enterprise Research Centre (LERC), part of Cardiff University’s Business School. LERC will be our academic partner on a selected number of our Research Reports

While for many investing in training during a recession

is counter-intuitive, those that see the bigger picture and are committed enough to make a difference can reap big rewards when recovery inevitably looms on the horizon.

Deep in the recession of the early 90s, a mixture of visionary leadership, workforce commitment and the support of a challenging customer spurred Power Panels Electrical Systems to embark on a journey that was to transform the business beyond recognition. Perhaps a surprise to the company, but less so for the judging panel, this year Power Panels was voted Best Factory of the Year. While being extremely proud of this accolade it is testament to the company’s commitment to training that, on an evening where it won this crown and a number of other trophies, chairman David Fox acknowledged that the trophy they were most proud to win was the one for Best Skills Development.

Bob Gibbon, managing director at the National Skills Academy for

Manufacturing, explains why an economic downturn is the right

time for employers to undertake an organisational skills audit, identify where the gaps are and invest in the training of its existing staff to ensure that those gaps

are plugged

44

Blueprintingexcellence:how to avoid a skills gap


Unfortunately Power Panels is currently an exception. It is estimated that the skills gap in UK engineering and manufacturing costs the economy approximately £823 million a year. In times of boom, that can be accommodated as there is growth elsewhere, but when recession looms and businesses need to look to shore up their financial defences it is dangerous for employers to ignore this.

Research from the Sector Skills Council for science, engineering and manufacturing technologies (Semta) shows that 17 per cent of engineering companies have hard-to-fill vacancies, 21 per cent have skills gaps in their existing workforce of which 70 per cent is made up of technical skills. On top of this, 42 per cent of the workforce is over the age of 45 so there is a need to ensure that the bespoke skills of the older workforce are not lost when employees retire.

So how should we address this deficit? Skills gaps will always be part of an evolving economy. They are a product of the nature of work shifting and stronger global competition. This is especially true in manufacturing where the pace of technological change is intense and the range of skills needed is vast – from the shopfloor to the boardroom.

Unfortunately the general approach to work-based learning is too often one-dimensional. This usually makes results difficult to evaluate, offering little evidence that training has delivered a tangible business impact. This, in turn, fuels the misconception that training is a cost that most employers can do without, and initiates a spiral of decline whereby the employer reduces the investment in learning because they see little tangible benefit.

On the contrary, training is at the very heart of every business’ potential. But until employers are encouraged to take a more systematic, considered and targeted approach to learning, they are unlikely to realise that potential. At present, less than three per cent of all training fulfils its true potential and up to 80 per cent does not deliver a return on investment. Such a poor performance is reflected in the UK’s position in the international skills leagues where we sit at number 20 for intermediate skills.

And yet by using a systems approach the Skills Academy is helping businesses achieve six-fold returns on their training investment.

This is called the Learning Engine and is designed to help employers, learners and training providers work together to get the most out of training. The Learning Engine identifies five steps in the training process designed to ensure that any investment in skills training provides the optimum return. They are:

1. Analysing the need – understanding the skills needed to meet business objectives is critical to business success.Not all skills are equal and so being able to determine precisely which skills will make the biggest impact on a specific business outcome is extremely beneficial. Additionally it is also critical to determine precisely which specific performance measures will underpin the business objective and to ensure that the chosen skills will indeed cause sufficient improvement in the critical measures.

Finally, during the analysis process employers can begin to identify what kind of training will best support their needs and by creating a rough map of the learning process incorporating all the factors they can estimate the financial benefit of the learning before the programme even begins.

2. Prepare together – ensuring both the business and the individual understand the training programme and related expectations will deliver superior results for all. Employers should be cautioned not to launch into learning without due consideration. Training has the greatest impact on employees and employers when everyone is properly prepared. Once the business objectives have been set and the skills gap identified all those involved need to understand what they need to achieve through their training and what the resulting personal and business benefits will be.

3. Powerfully delivered training – research shows that training taught in an engaging informative manner will result in more enjoyment, retention and a better overall result. Different people require different approaches. Learning needs to be designed around learners, not training providers, and must take account of the full range of tools on offer. Too much learning is a ‘knowledge dump’ and this is not conducive to understanding, long-term recall or application of knowledge in the workplace.

4. Follow through – ensuring you use any new skill is the vital step in achieving results and striving for excellence. This is where learning moves from ‘knowledge gained’ to ‘benefit delivered’. Mentoring and coaching learners to apply their new knowledge to a real working environment means the business can see an immediate benefit from its investment.

5. Evaluate – asking ‘how did we do?’ and ‘what can we build on?’ will create the virtuous learning spiral required to move your business and employees to the next level and achieve excellence.

After experiencing the Skills Academy Lean Foundation programme last month, Gary Schultz, business improvement manager at Relyon, said: “At Relyon we believe that a period of economic uncertainty is the perfect time to invest in the skills of our employees – that this will help us to progress as a business and ensure that our competitors cannot steal a march on us.”

So now is the time for employers to look to this model, use it to find the skills gaps, power up their learning, propel performance improvement and drive their businesses safely through to the sunnier side of the recessionary storm.

Skills & productivity

45

“Not all skills are equal and so being able to determine precisely which skills will make the biggest impact on a specific business outcome is extremely beneficial

“

IT in

When it comes to the world of production

planning and scheduling, manufacturers have traditionally been left with three routes of assistance from the world of manufacturing IT. The most wide ranging and most problematic was the humble spreadsheet, or as was often the case, multiple linked spreadsheets that could take over an hour simply to open due to their bewildering levels of cumbersome complexity. More serious offerings split into the two well-defined camps of fully integrated/in-built and best-of-breed. The former were enterprise resource planning (ERP) systems with embedded planning and scheduling modules of varying capabilities, while the latter were highly specialist solutions that could either run on a stand alone basis or integrate with existing MRP/ERP systems. Advocates of the former would point to the integration difficulties and speed issues associated with the best-of-breed, while the latter would highlight the simplistic functionality of integrated planning and schedule modules, often little more than built-in spreadsheets.

Move forward to the present day, and the lines of distinction are much more blurred, reflecting an increasing requirement by modern manufacturers to have extremely accurate, powerful and flexible production planning and scheduling control. For Colin Hearne, EMEA consultant on advanced planning and scheduling (APS) for Epicor – which will soon deliver the Epicor 9 solution that includes a powerful, fully-integrated APS solution – this is because progressive manufacturers have fundamentally revised their attitude to planning and scheduling. “Manufacturers increasingly have to look at every aspect of their business from a holistic perspective which means moving away from a compartmentalised or departmentalised approach. The needs of such a business are therefore best served by a fully integrated, enterprise-wide ERP solution where every area of functionality is designed to work towards the greater goal of the entire business.”

He continues: “Historically, planning used to be the preserve of the planner with any planning and scheduling system essentially being owned by the planner or planning department. Planning solutions tended to be complex, bolt-on systems because the system requirements were being driven, unsurprisingly, by the planning department to meet their own often esoteric scheduling considerations.” According to Hearne, the consequences cemented the compartmentalised

nature of many businesses. “Sales would have to go to the planner to check for availability, the planner would have no real-time visibility of new quotes, order book amendments, current stock levels or wider material requirements and would rarely have the means to take into consideration other key factors such as assigning the right human resource to the right machine resource at the right time. And because the system was linked, albeit externally, it was only using data as reliable as the last time an import/export routine was run, which due to the length of time this could take, might have been hours previously.”

Each delay adds up to wasted time, potentially wasted resources, and presents a considerable haemorrhaging of efficiency, especially in a rapidly moving manufacturing environment dealing with high order levels from multiple customers requiring raw materials from a wide range of suppliers. With a modern fully-integrated business system, the focus moves from the concerns of individuals focusing on individual transactions to those of the overall business and achieving business level aims and objectives. Hearne illustrates by looking at ‘what if’ scenarios. “Traditionally, ‘what if’ scenarios were looked at by the planner to determine the impact of any changes at a planning level. The reality is that ‘what if’ scenarios happen throughout different areas of the business and consequently have a business-wide impact. With a fully-integrated ERP system, information is now owned by the business as a whole with everyone able to evaluate their decisions in the light of company-wide information. Once those decisions have been made, every relevant item of information within the system is updated automatically, which in turn ensures that the next decision made by whoever and wherever in the company, can be made with the confidence of using totally up-to-date information.”

The lines between in-built and best-of-breed advanced planning and scheduling (APS) systems are becoming increasingly blurred. So how do they fare against one another?

46

Best-of-breed applications can complement the legacy system without changing its internal data structures, which can take weeks to implement and test

“

“

outSeconds

IT in


According to Hearne, the difference between a holistic and compartmentalised approach is embedded in the very nature of the respective implementation approaches. “A best-of-breed implementation typically concentrates on the minutiae of the planner’s requirements, whereas an Epicor implementation focuses on the capacity modelling and factory management in the context of the entire business and models the entire planning and scheduling needs of the business as a whole, right through to its interaction with the supply chain.” He cites subcontracting as a classic example of where best-of-breed APS that focuses on the needs of planning department falls short of the overall business requirements. Purchasing and production have to deal with the reality of dealing with subcontractors and there may be times where it’s more beneficial to the company as a whole to outsource and use subcontractors as opposed to simply maximising planning capacity. “These are decisions that can only be made at a business level, so are easier to achieve and more likely to be achieved, only with an APS system that is designed to be an integral part of a business-wide solution.”

When it comes to best-of-breed APS solutions, perhaps the most well known example is Preactor which now has over 2,300 implementations in 64 countries. Mike Novels is CEO of Preactor International and he believes that manufacturers are increasingly becoming successful through a strategic use of complementary manufacturing IT systems. He cites recent research by Aberdeen Group which found that manufacturers attaining ‘best in class’ measured by lowest work in progress/inventory and ‘on-time and in full’ delivery levels did so by using APS to control the shopfloor in conjunction with ERP and manufacturing execution systems (MES).

For Novels, ‘best in class’ is not just an objective to be aimed for. “For many companies it will be the life raft they can cling to during the current storm in the global economy. Demand driven manufacturing will be the watchword and APS the mechanism to achieve it.” Central to Novels’ argument is the need for manufacturers to empower the planner, by which he means ensuring the planner has visibility of the entire business and can make scheduling decisions, such as changes in priorities for customers, based on company-wide key performance indicators (KPIs). With this level of business visibility the planner can make the trade offs that are bound to be required, for example utilisation (large batches) versus delivery performance (small batches). Ultimately the shopfloor has only to cope with a single KPI – schedule adherence, safe in the knowledge that the company KPIs have been taken care of by the planner.

Far from being compartmentalised, Novels sees this being best achieved by tightly integrating the APS system with any existing production control system as well as any incumbent ERP system. He understandably sees a number of intrinsic benefits from this approach. “Modern technology has made integrating external APS systems such as Preactor simpler, quicker and able to deliver usability as seamless as many so-called fully integrated systems. Being the APS partner of choice to more than 15 ERP

companies, all with demonstrable links, shows that even they recognise this. For many manufacturers looking to improve their production planning and control but unable to afford to invest in an entire ERP suite, best-of-breed solutions can often breathe new life into existing ERP systems, adding value to their existing ERP investment.”

He also critiques the twin arguments put forward by ERP vendors that built-in integration offers speedier operation as well as implementation. “While data can certainly be shared easily within an integrated system, modules are still run independently. It would be unacceptable for your scheduling system to ‘run like a dog’ just because the payroll system was being used.” Modern APS systems have their own inherent planning and scheduling engines which can operate extremely fast, even allowing for bi-directional data transfer with an ERP system.

When it comes to speed of implementation Novels asserts that this is dependent less on integration but more on companies having accurate and detailed data that the APS system needs in order to work properly. “Best-of-breed applications can complement the legacy system without changing its internal data structures, which can take weeks to implement and test. Moreover, data not available in the legacy application can be made available in the APS system then as orders are received in APS the extra local data is added.”

Last but not least there is the issue of flexibility. While Novels is quick to acknowledge that straight forward manufacturing planning and scheduling can be adequately handled by fixed models with fixed scheduling rules, he maintains that this isn’t the case for fast moving, agile manufacturers working on demand driven and make to order models. “Anything where a degree of flexibility is required, even if it’s as a result of a change in business model, can result in planners wasting time essentially having to ‘fool the system’ in order to get it to function in a way that matches the real world business practices within a company.”

The lines between in-built and best-of-breed APS may indeed have blurred with each offering considerably better planning and scheduling functionality than their predecessors. No doubt this will continue to be the case, as will the arguments over which is the better approach. Only time will tell which, if either, proves to be the case.

manufacturing

47

Traditionally, ‘what if’ scenarios were looked at by the planner to determine the impact of any changes at a planning level. The reality is that ‘what if’ scenarios happen throughout different areas of the business and consequently have a business-wide impact

“

“

Epicor 9 is not just another new software instalment – it is released for fresh presence in the market, with new logos and one or two token niche functionality additions. Encompassing the robust functionality, global footprint and industry expertise of Epicor’s existing ERP suites, Epicor 9 takes business management and control to the next level by extending reach, synergy, and visibility to the organisation and its trading partners. Specifically, it features numerous essential embedded capabilities that manage the flow of processes right across the enterprise. This approach to core functionality, typically provided in other systems through after-the-fact integration or third party add-ons, includes customer relationship management (CRM); supplier relationship management (SRM); advanced planning and scheduling (APS); business process management (BPM); governance, risk and compliance (GRC); product configuration; field service and more. Additionally, integral support for master data management (MDM) and what Epicor terms ‘global business management’ lets businesses virtualise their enterprise across plants, warehouses, sites, trading partners, companies, countries, and hardware, keeping everything synchronised in real time.

At the heart of this lies the innovative long-term partnership Epicor has with Microsoft technology. Not only does this enable Epicor 9 to leverage the underlying technological benefits of Web 2.0, SOA and Microsoft’s Cloud Services Initiative, it also offers users tremendous choice for interacting with their enterprise information – through the 2007 Microsoft Office system (Office Outlook 2007, Office Word 2007, and Office Excel 2007), Microsoft Office SharePoint Server 2007, Microsoft Office PerformancePoint Server 2007, Windows Mobile and more. It is expected that the combination of Epicor and Microsoft software will enable companies to drive greater efficiencies and create new business value as users are empowered to work smarter and faster.

Epicor has become recognised as a leading provider of enterprise

business software for the midmarket and divisions of Global 1000 companies despite competition in recent years from typically top-end suppliers like SAP and Oracle attempting to diverge downward the small- to medium-sized enterprise (SME) space. Epicor 9 is the latest evolution of more than 20 years’ experience designing and implementing ERP solutions and represents what the company describes as a new approach to the way ERP systems are designed, built and used.

Rod Winger is the senior director of product marketing, manufacturing and supply chain management at Epicor and his personal background experience in manufacturing firms spans many years. His CV contains roles in distribution, supply chain management, warehouse management and logistics and he has extensive experience as a manufacturing practitioner as well as in IT support. Because of this, Winger is uniquely placed to understand the needs of businesses, not just in the here and now, but to anticipate how those needs might change in the future. He says of himself: “I am the funnel – I am responsible for what goes into the products.” His job is to concentrate on what he calls ‘the four Cs’: customers, convergence, competitiveness and compliance.

What is Epicor 9?Epicor 9 is a global ERP solution that will make ERP available virtually everywhere, utilising Web 2.0 concepts to provide users with a truly collaborative and dynamic enterprise business application experience. Epicor 9 raises technology to a level that delivers unprecedented business management and supports continuous performance improvement through real-time, in-context business insight. At the core of Epicor 9 is an adaptable and collaborative business architecture that satisfies the needs of any enterprise regardless of country, industry or access device, enabling businesses anywhere to function without barriers. The initial release will serve upwards of 40 countries and there will eventually be even more languages and localisation features to increase that figure.

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Next leveltechnology

Last month saw the release of the much anticipated Epicor 9 – the latest enterprise resource planning (ERP) software from Epicor Software Corporation.

For more information contact: Rachel Barber-Kebby, marketing managerTel: 0800 3161155Email: [email protected]

devices and includes full search capabilities to rapidly find and drill down to applicable data.

Over time the company is aiming to migrate all of its customers onto the new product although it will put no pressure on them to do so. “Epicor 9 is a carrot on a stick and we don’t carry the stick,” says Winger. “We still develop and release against every one of our products, so the message for our existing customer base is ‘move when the time is right for you.’ As long as there is a requirement for a product we will never retire that product. We haven’t retired a product in our 20 year history and that speaks of our commitment to old and newer customers.” He adds that over time the business benefits and the increasing attractiveness of the technology will provide the impetus for people to make the move.

Thomas Kelly, president and CEO of Epicor, describes Epicor 9 as unparalleled because it is, “designed for the way people work today, is built for business and is ready for change. Our strategy is to provide both new and existing customers with unprecedented flexibility and choice. It’s about delivering business without barriers.” This flexibility and choice comes from empowering companies to select the fundamental options that are right for their business – choosing whether to deploy on-premise; single-tenant hosted, or multi-tenant software as a service (SaaS); Windows-based or web-based; centralised or decentralised; end-to-end or individual suites. Companies can also choose how to configure the application suites to best fit and improve business processes. End users can choose several options for interacting with their ERP system: using the standard application forms, through Microsoft Office applications, through internet and intranet portal pages or composite applications, using a search engine, taking RSS feeds, and from mobile devices.

Winger sums it up by referring to the response of manufacturers themselves to Epicor 9. “We just had our user’s conference and the response from manufacturers was ‘Finally! Now we can do what we need to do.’ That’s what Epicor is about; we enable firms to thrive.”

SpecialfeatureEpicor

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So what can Epicor 9 do for manufacturers?“Manufacturing is one of the strongest components to 9 because of the background and heritage we have in this sector,” says Winger. Epicor knows that manufacturers worldwide have to identify, consider and respond to a new set of challenges and variables each day and Winger sees Epicor 9 as the definitive tool to allow them to achieve that. To this end Epicor 9 is designed to support various manufacturing processes including discrete, make-to-order (MTO), engineer-to-order (ETO), configure-to-order (CTO), mixed-mode and make-to-stock environments.

Winger says the expectation from the mid-market is to have one product from one vendor to supply all of its ERP needs. It was therefore essential to include all of these applications in Epicor 9 and eliminate any necessity for disparate systems. “With this release we have accomplished what others have tried to do and failed in, namely collapsing product sets and having them all on a single IT edifice, with a common tool, a common user interface and a common data structure, all built in a web service SOA from the ground up.” He continues: “That’s been the intention of our competitors but all they have are tools for hooking it all together, not a single application. Epicor on the other hand is putting capability in the hands of the user – not the vendor, not a consultant and not some other third party. So customers can come to us and get everything they need.”

Epicor 9 is available as two editions – Standard and Enterprise. The Standard edition is aimed at the small to emerging market with a typical five to 20 user-range; small or start-up manufacturing sites, for example. “You can take it out of the box, turn it on and it will really deliver results,” says Winger. “It’s up to the user how far they go with it by changing the complexities and changing the rules. For a small emerging manufacturer, however, out-of-the-box capability is tremendous.” This is a step Epicor has taken towards limiting total cost of ownership (TCO) for such companies which is increasingly important in the current business climate.

Where the Standard edition appeals to the lower end of the mid-market, the Enterprise edition can handle the needs of the largest, vertically-integrated companies over multiple geographic locations. “Everything is rules-based and we built that into the framework because it allows us to localise the product for every geographical area simply by changing the rules,” explains Winger. “So any country’s governmental financial reporting requirements, for instance, can be applied – every currency, every language, every legislative obligation. Even to optimise supply chain logistics – things like countries of origin and product identification codes can be tailored to suit. Localisation isn’t just financial; you need compliance across the board.”

Equally important across the board (and not just for the board) is access to real-time data throughout the company and from anywhere in the world. Enabled by the Epicor Everywhere Framework and targeted use of modern consumer web concepts, Epicor 9 can be accessed via a range of mobile devices, such as Windows Mobile, Symbian, BlackBerry, and the Apple iPhone for wireless business. Additionally, Epicor enterprise performance management (EPM) can also be deployed direct to mobile

Epicor 9 was built with a concentration on the following practices:

Centralised customer relationship management

Efficient sales and service management

Rules-based product configuration Real-time production management Quality and compliance

management Extensive product data

management including product lifecycle management (PLM)

Embedded advanced planning and scheduling (APS)

Extensive materials management including cradle-to-grave serial and lot control

Support for lean initiatives Comprehensive supply chain

management Improved financial transparency

and accountability Portals, dashboards, business

process management and enterprise search to support business performance management initiatives

Global deployment

Much is rightly made of the importance for

manufacturers to see themselves accurately within the context of an extended supply chain, yet many manufacturers also have to deal with another equally important supply chain – the one that exists within the company. This internal supply chain relates not just to the flow or supply of work from one area of a company to another, but also the flow of information across the entire enterprise.

One such company is Bankside Patterson, a market leading manufacturer and supplier of chassis and modular steel frames to the holiday home, leisure and modular building industries. The 120 worker strong company has experienced dramatic growth in recent years and now operates from a 12 acre factory complex in East Yorkshire where it makes 100 modular building

frames and 300 chassis per week, ranging from four to 17 metres in length. While the actual manufacturing process appears relatively straight forward involving three clearly defined stages of engineering, sub-assembly and final assembly, the sheer scale of manufacturing means successful completion of the end product is dependent on managing the company’s internal supply chain.

This is explained by sales director Neil Taylor. “We manufacture over 80 per cent of all our own components onsite and operate on a make-to-order (MTO) basis. Depending on the type of component produced and its intended use, a multitude of sequence dependent manufacturing processes can be involved, including sub-contracting to an external galvanising company – all of which need to be factored into the production timeline.”

Managing the internal supply chain

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While supply chains are not a new concept, they have become ever more complex in the emerging world of global competition and distributed manufacturing

Logistics

Given the physical size of the site, it was easy for materials and components to be misplaced or incorrectly supplied to the wrong place at the wrong time. Consequently production workers could potentially use materials not allocated to the current project which led to distrust in the overall stock levels and planning process with production managers increasingly competing to get their own orders completed.

It was not just the flow of work but also the flow of information that caused problems, with critical areas of expert knowledge being distributed in disconnected islands throughout the company. Moreover, when the company was smaller, everyone had an overview of what everyone else was doing and so a lot of implicit assumptions were in operation in order to get the job done correctly. As the business grew, it

became impossible for people to keep track of all this information and these assumptions began to fail. What was needed was the ability to collect all this invaluable expertise and somehow systematise it so that it could be managed and distributed throughout the company.

Bankside Patterson had been using an ageing business management system called Pegasus Opera combined with a growing assortment of spreadsheets and manual processes to try and achieve this. However, the withdrawal of support for its current version of Opera in early 2005 combined with an imminent site move that would allow much more on-site manufacturing led to the beginning of a very thorough selection process for a complete replacement system, one which was fully integrated and built on the latest technology platform. To facilitate this the company approached Nick Hardisty, now information systems manager, to come and oversee the process.

Hardisty undertook a team approach with input from key stakeholders within the company from the managing director down, which led to a unanimous decision in February 2007 to invest in EFACS from Exel Computer Systems. Six months later the system successfully went live on schedule. At an internal supply chain level the benefits were felt from the outset. The previously disconnected islands of data were now fully interconnected with visibility extending across the entire enterprise, which meant that the manufacturing process was more cohesive with orders having a much greater sense of flow as they moved through the system and physically across the site. Increased visibility led to increased control with real-time stock levels resulting in re-order levels which could now be accurately set and were at times significantly different to levels the company had historically been working with. This in turn impacted on the company’s external supply chain by helping the company to more effectively manage its supplier relationships.

Contour Premium Aircraft Seating, one of the leading premium aircraft seating manufacturers in the world supplying many leading international airlines, achieved the same control over its internal supply chain but by an alternative route. The £100 million turnover company employing 800 people across its two main sites manufactures 200 seats per month. With approximately 4,000 components involved per finished product from a range of almost 100,000, all of which have to be managed within the internal supply chain, the scale of Contour’s challenges become clear.

However, as planning manager Leyton Hancock explains, this barely describes the true complexity involved. “When

& supply chain

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“It’s simply unacceptable to not have the required part available as it can completely jeopardise every subsequent link in the chain

“

we say we manufacture the vast majority of each seat, we are talking everything from every metal fixture and fitting, through to the majority of each moulded part, most composite elements, the soft furnishings including leather, even the wiring harnesses that control the electrics.” Furthermore, there are various stages of sub assembly involved at different points in the manufacturing process before the final collection of parts and sub assemblies are dispatched to the main assembly site for completion. With a turnaround per unit of approximately two weeks it is no wonder Hancock says that success depends on achieving smoothness of flow throughout the internal supply chain, with batch optimisation and sequence dependency each having a dramatic impact.

Contour’s internal supply chain is dependent on its interaction with its external supply chain, as Hancock explains: “We inevitably deal with a great many suppliers, some of which are more reliable than others. Depending on the product being supplied, we can be dealing with lead times ranging from hours through to weeks if not months. All of this has to be not just managed effectively but also with the required levels of visibility across the entire manufacturing process. It’s simply unacceptable to not have the required part available as it can completely jeopardise every subsequent link in the chain.”

52 Have your say at www.themanufacturer.com

The internal supply chain is driven by orders generated by the company’s ERP system located at its final assembly site. These were supplied to the manufacturing site from which a meaningful schedule had to be generated, typically by spreadsheets. But with these numbering in their hundreds and with some taking 30 minutes to open, it’s no wonder that generating a schedule could take days not hours, and even then it would be out of date before it could be distributed effectively across the production floor. From an internal supply chain management perspective, this meant that the company couldn’t compare actual progress on the production floor with the projected schedule which in turn resulted in capable to promise (CTP)/make to promise (MTP) dates being very poor.

Rather than replace its existing ERP system, Contour decided to invest in a specialist planning and scheduling solution to work in partnership with its ERP. An earlier failed pilot project did not deter Hancock when he arrived at the company where he was also tasked with implementing a lean manufacturing strategy. This was because Hancock had previous experience with the Preactor APS system and recognised that the inherent flexibility, scalability and power of the system were all key ingredients that Contour needed.

The decision was therefore made in June 2007 to invest in a Preactor Enterprise system that provides five local area schedules and one master schedule. What followed was an in-depth implementation period lasting six months after which the information flow, including that of the internal supply chain, was very different. Not only have bottlenecks now been correctly and incontrovertibly identified, they have also been addressed as part of the overall increase in visibility that Preactor has brought. And while only in the early stages of developing the system, Hancock estimates that Preactor has directly contributed to a general increase in output of 10 per cent with a corresponding WIP reduction of approximately 40 per cent, with the most immediate saving being an £8,000 per week reduction in costs in the vacuum forming section alone due to more efficient workflow and better resource utilisation.

And what of those important CTP/MTP promises? “We’ve still some work to do but we’re heading in the right direction as we fine tune our system and continue to make progress with our lean programme. The main thing is we’re now making the right thing at the right time and this comes down to the fact we see lean and planning as symbiotic in managing our internal supply chain.”

Can you afford to ignore your supply chain? Don’t miss our Logistics and Supply Chain Report due Feb/Mar 2009 sponsored by KPMG

“In today’s commercial environment with excess capacity globally and margins under pressure, organisations need to have a very efficient and effective logistics and supply chain, and even this may not be enough to generate sufficient shareholder returns. They will therefore need to think about more than physical movement of goods and services, they must innovate, utilise best practice including low cost country sourcing, offshoring and ensuring that they operate in the most tax effective way.”

- Graham Smith, global head of engineering & industrial products, KPMG in the UK

“The cash that is available to a business now finds itself in demand on two fronts – to service the debts racked up in happier times and to keep the business itself running – and it finds itself being stretched pretty thinly. With further bank lending not exactly on the agenda, the search for cash is being cranked up. In any business, its supply chain is often the single biggest source of cost and the biggest drain on cash resources. It is here where we need to look to free up those emergency funds – and I don’t mean simply by pruning supply chains or cutting back on production. With some rather more prudent housekeeping, the requisite cash could be freed up with a minimum of fuss.”

- Julian Thomas, global head of supply chain management, KPMG in the UK

Retailers demand that their del iver ies

arrive exactly on schedule and this is reflected throughout the Heinz operation, which is housed in a 350,000 square foot facility run by third-party logistics provider Wincanton. Products come in ready to be scanned and in many cases are not handled by a human being again until they are ready to be loaded onto a delivery truck.

Chris Whitby, Wincanton’s supply chain manager for the contract, says that the aim is to meet demand while maintaining the flow of products. “It’s about being able to run at very high volumes in a consistent way,” he comments.

As well as the baked beans and ketchup, Heinz’s products include sauces, baby food, salad cream, canned pasta and soups. The challenge for the company’s supply chain is to make sure that it can provide good levels of customer service so that retailers have the products available on shelf but without inflating its costs.

High-tech engineering is not something you would normally associate with a can of baked

beans or a bottle of tomato ketchup. Yet at HJ Heinz’s

national distribution centre (NDC) near Wigan, sophisticated

automation is used to move these and other products

smoothly around the building

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An appetite forautomation

There is also a need to maintain sufficient flexibility for when the business changes.For example, in the last few years, Heinz has transformed its entire soups range and sold its John West business.

One of the main advantages of automation, according to Richard Burnett, Wincanton’s business unit director, is greatly reduced labour costs. “As well as being less reliant on labour you achieve much better accuracy as well. However, the calibre of people you need working in the warehouse is higher than in a manual equivalent,” he says.

Whitby adds: “You are talking about management of a very complex facility and you need people who understand how the different elements come together and affect each other.”

Products come into the warehouse from a number of sources. The NDC (national distribution centre) is located on a 38 acre site with direct connection to the Kitt Green factory which makes beans and soups. A smaller warehouse nearby dispatches large, full-load quantities direct to major retailers’ distribution centres.

The rest of the product is sent over to the NDC. Because there is no need to go outside the site, the goods can be transported on specially designed off-road vehicles that can move 30 pallets in one block onto the conveyors that take in the product. Others lines are brought in from factories around Europe, including Holland and Italy, as well as from Kendal in the UK.

No matter where they come from, the pallets are assessed to check they are the correct dimensions through three-dimensional profiling, and are scanned to ensure they contain the right product and weighed to check they are not too heavy. Those that fail any of the criteria are sent down a special spur on the conveyor to be dealt with separately.

Such an approach is necessary because there is less margin for error within an automated warehouse than in a manual one – if anything does go wrong it is far more disruptive because products have to stop flowing through while the problem is addressed.

If they pass this process the products are delivered on conveyors to a high-bay storage area where they are placed – and in due course retrieved – by unmanned cranes. There are 17 of these in use in the warehouse, each capable of storing and retrieving pallets from heights of up to 30 metres.

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We’re now making the right thing at the right time and this comes down to the fact we see lean and planning as symbiotic in managing our internal supply chain

“

“

ends up within the UK and Ireland but a proportion – 10 to 15 loads a day – is exported to countries as far away as Australia.

Planning for peaks is a vital part of managing the warehouse successfully, as some products are very seasonal. The ‘soup season’ in the run-up to winter can see Heinz’s production rise by up to 40 per cent, for example. There is spare capacity built into the operation to cope with such fluctuations and, of the four layer picking machines, only two are used during periods of average throughput. One is usually being serviced while the remaining one is kept on standby for when volumes increase.

This year has seen a ‘resilience’ project to upgrade the automated equipment so that it is even more reliable. That way, throughput can be increased without risk of the operation breaking down and creating a bottleneck. “It is a very robust solution which allows an increase in terms of volume capacity,” Burnett comments.

As well as the main warehouse operation the NDC is also responsible for reworking product. This can include creating promotional packs on behalf of different retailers such as multi-packs or amalgamating different products or marketing materials into one pack.

Such work is carried out under a contract first awarded to Wincanton in 2005 and renewed in 2007 but Heinz’s use of the logistics firm dates back to 1996. Initially it was used for transport only. It was then awarded the warehousing contract and eight distribution centres were consolidated into the Wigan site, which opened in 2002.

Transport is carried out on a dedicated fleet of 23 tractor units and 112 trailers and by selected sub-contractors. There is currently a project to increase the use of back-hauling loads for other companies which gains revenue for the fleet – thereby reducing overall costs – when it is not being fully utilised.

The operation relies on both manufacturer and logistics provider having similar attitudes, as Whitby explains: “It is a fairly informal culture. We don’t stand on ceremony and if we need to talk to each other we will. Heinz’s logistics team is based on site and the factory is only a quarter of a mile away. It is not a static relationship but one where we are constantly looking at the future,” he comments.

It seems that even in an operation which relies so heavily on automated equipment and IT systems, it is still the human beings that really make it tick.


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You are talking about management of a very complex facility and you need people who understand how the different elements come together and affect each other

“

“

The pallets used in this area contain cases several layers thick, but for retailers who want smaller quantities there is also a dedicated area for pallets with a single layer of product. This is also automated and served by four specialist picking machines. For retailers whose requirements are even smaller, there is an area for picking individual cases and, unlike most of the warehouse, this is operated manually.

The different approaches allow all parts of the market to be served efficiently, Whitby says. “The major multiples make up around 60 per cent of the volume and predominantly, they want their orders in full pallet loads, although sometimes they may want layer picks. In the main, however, single layers and cases are for smaller customers,” he explains.

Although most orders are picked with automated equipment, planning the workload of the warehouse requires a high level of skill. When orders come in from the retailers they are scheduled in for the next day – some deliveries may involve a single drop whereas for others there may be multiple destinations. The process needs to take into account how the facility operates, the geography of the route and which vehicles are being used.

Burnett says: “Our staff have to have knowledge both of transport scheduling and how loads are built up within the warehouse. Sometimes you might get full pallets, single layers and cases on the same delivery vehicle. All the different elements must be considered when the order is being pulled together.”

Once orders have been picked, they are taken to one of 20 dispatch lanes where they are loaded onto the vehicles. On average, around 100 vehicle loads are dispatched from the warehouse each day but this can rise to 130 during peak periods. Along with the product being sent directly from the Kitt Green warehouse it is not unknown for 180 trucks to be sent out in a single day. The majority of the volume

As well as being less reliant on labour you achieve much better

accuracy as well. However, the calibre of people you need

working in the warehouse is higher than in a manual equivalent

“

“

Following an HSE visit, manufacturer CA Group decided to fulfil its own health and safety needs through robotic innovation

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automationSafety in

CA Group, the north east based manufacturing company,

has been producing metal building products since 1983. The company specialises in commercial and industrial buildings, which are being built on an increasingly large scale. One detail of these buildings is high-capacity guttering, which is often formed from sections of sheet metal of up to 200 kilogrammes – significantly over the 25 kilogramme per person recommended maximum lift allowed for manual handling.

Since its inception, the methods and processes used by the company have changed and developed as more advanced processes have made their way into the industry. Originally many of the lifting, measuring and cutting jobs would have been done by hand. Some of the changes in CA’s practices have come about as technology has progressed and it has become easier and more cost efficient to use mechanical methods. Other changes have been as a result of changes in legislation and laws.

Regulations, including Manual Handling and the Health and Safety at Work Act, have resulted in the need for technologically advanced processes to eliminate risk to workers. According to the Health and Safety Statistics 2007/8, process, plant and machine operatives incur the second highest level of workplace injuries, second only to elementary occupations, with the total figure standing at 33,270 for the year as reported to all enforcing authorities.

The Health and Safety Executive (HSE) paid CA a routine visit at its manufacturing headquarters in Evenwood, County Durham and observed its work processes. They identified the need for fully automated lifting equipment in order for the company to keep in line with current health and safety regulations.

This visit took place approximately two years ago, during which time, it was noted that in the process of manufacturing single skin and insulated gutter sections – one of CA’s key product offerings – a considerable amount of manual lifting was occurring but needed to be avoided.

To manipulate sheet metal through the shaping and bonding process, two operatives were previously required to lift and move it, but in order to comply with regulations and to minimise risk, the HSE demanded that this practice be abolished. At the time, the two people would be lifting between 60 and 200 kilogrammes per sheet at approximately 20 sheets per hour.

At the time of the visit no automated means of solving the problem was available to purchase. There were automated lifting and pressing technologies already on the market but none of them had the necessary software to allow the specific nature of the work to be carried out by allowing the two machines to work in conjunction with one another.

Due to the lack of available solutions, CA made a commitment to the HSE to invest in devising and implementing its own means of solving the problem at the earliest opportunity and two years and a substantial investment later, CA has unveiled its answer.

The technical team at CA, working in conjunction with a robotics manufacturer, devised a new system that completely eliminates manual handling from the entire process. When an order or specification is received, it is then programmed into a specially-created software package. The operator first has to ensure that the correct size sheet of metal is delivered to the loading station, that the sheets are positioned correctly, and finally that the specifications have been verified as correct. From this point onwards, the process is fully automated.

The next stage involves a six-axis anthropomorphic robot which carries out all sheet handling, up to a maximum weight of 107 kilogrammes, inside a sectioned-off cell during the entire machining process. The weight of the sheet metal is supported by a 2.8 metre by 400 millimetre gripping device fitted with 20 suction cups.

The robot picks up a flat sheet, moves it to the centering station, and then a computerised press commences the process of bending it into shape. Once shaped, the gutter sections are then stacked together within the cell, and when the stack reaches a set height, it is manoeuvred to the bonding area.

Two articulated manipulators, also using suction cups, then lift and rotate the gutter sections into position for the bonding process. Sections of gutter of up to 7.2 metres are lifted into position via internal cranes for welding and bonding, then stacked ready to be transported to customer sites.

Once on site, these sections of gutter need to be craned into position at roof level – owing to their size and weight they cannot be moved around site by hand. Peter Donohue, CA Group’s safety, health and environment manager, explains: “Not only have we eliminated manual handling and associated risk from our end-to-end manufacturing process, but we have also minimised our clients’ exposure to risk by ensuring that contractors on site can work more easily with the product. Furthermore, we reduce specifiers’ CDM risk exposure.”

The CDM 2007 (Construction Design and Management) Regulations were introduced in Great Britain on 6 April 2007. It had been identified that construction was a disproportionately dangerous industry, calling for urgent improvements in health and safety. In 1994 the first set of CDM Regulations were introduced, but concerns were raised that their complexity and the bureaucratic approach of many duty holders frustrated the regulations’ underlying health and safety objectives – a view which was supported by an industry-wide consultation in 2002 which resulted in the revised regulations.

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“According to the Health and Safety Statistics 2007/8, process, plant and machine operatives incur the second highest level of workplace injuries, second only to elementary occupations

“


It goes without saying that at every stage of the lifespan of a gutter such as those made by CA, there are those to whom the regulations apply. From designer and specifier to contractors on site, all are bound to consider heavy lifting issues when working with building products such as large metal guttering, and as the manufacturer of such products, CA bears a responsibility to its clients and end users to create products that do not expose them to risk.

The robots at CA have eliminated the risks associated with manual handling in relation to the size and weight of the gutters they produce, which means that architects and specifiers can now design ever larger guttering systems without being limited by workability on site.

Previously, a roofing contractor might have been tempted to cut corners by manually lifting and positioning gutter sections (contrary to CDM Regulations), but now CA has made this impossible by producing much larger sections which would be physically impossible to manually lift or manoeuvre. Its new 7.2 metre guttering sections mean less on-site assembly, so crane hire for the lifting process is more cost effective as half as many lifts are required as with a traditional three metre section.

Brian Watson, CA Group commercial director, is delighted with the new robotics systems. “We have

always supported the delivery of the highest standards where health and safety are concerned, and our new system is testament to our commitment to the HSE,” he says. “We are now determined to spread the word that a solution exists, so no metal roofing manufacturer should ever be exposed to manual handling risks from now on.”

As a consequence of this new technology being available, any manufacturers with similar processes should expect to receive visits by the HSE to assess how this technology can be implemented into their process systems to ensure the elimination of manual handling associated risks. It is likely, now that there exists a solution, that any manufacturers who choose to ignore the risks will face further action by the HSE.

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We are now determined to spread the word that a solution exists, so no metal roofing manufacturer should ever be exposed to manual handling risks from now on

“

“

In May 2007, the Government announced its decision

to implement a new emissions trading scheme designed to reduce carbon emissions, this time concentrating on the non-energy intensive sectors. The scheme – the Carbon Reduction Commitment (CRC) – is expected to apply to approximately 5,000 organisations in the UK.

Emissions reduction schemesEmissions reduction schemes have been designed to reduce the risk of climate change which, as we already know, may bring increasing global temperatures, rising sea levels, changes in weather patterns and a higher probability of extreme weather. The large-scale, irreversible effects that global warming is predicted to cause can already be seen across the globe.

Governments across the world are acting now to try to reduce greenhouse gas emissions which contribute to climate change. This includes the setting of legally-binding greenhouse gas emission reduction targets. To reach these targets, a number of new policies and measures have been introduced.

European Union Emission Trading Scheme (EU ETS)In 2005, the EU ETS was launched. This mandatory scheme works on a ‘cap and trade’ basis, with affected installations being allocated allowances. In the case of EU ETS, each of these allowances represents one tonne of carbon dioxide which that facility is allowed to emit. The number of allowances allocated to each installation for any given period is set down in a document on a country by country basis within the overall ‘National Allocation Plan’. The number of allowances each installation is given relates to their historical emissions. Each phase of the EU ETS scheme aims to reduce the allowances available to each installation to encourage sites to reduce emissions and become more energy efficient.

Emissions trading allows companies to emit in excess of their allocation by buying additional allowances from the EU carbon market. Similarly, a company which emits less than its allocation can sell its surplus.

With two emission reduction schemes already in place – the European-wide EU Emissions Trading Scheme (EU ETS) and the UK’s Climate Change Agreement Scheme – the introduction of the CRC brings yet another carbon trading programme into an already crowded mix. Liz Morgan, carbon solutions manager at EIC energy consultancy, explains the how these schemes operate and takes a look at how manufacturers can make them work together effectively

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Carbonreductionschemes

SustainableThe scheme applies to large energy-intensive organisations within the EU, including energy generation activities over specified capacities, production and processing of ferrous metals, mineral industries and pulp and paper industries. More than 1,500 sites in the UK are covered by the scheme in the current phase II of the scheme, which runs from 2008 to 2012.

Climate Change Agreements (CCAs)CCAs are voluntary schemes which provide participants with up to an 80 per cent discount from the Climate Change Levy (CCL), a tax on non-domestic energy use introduced in 2001. In return for this discount, sites must agree to challenging targets for improving their energy efficiency or reducing carbon emissions. CCL discounts represent a huge potential financial saving for many companies. With the additional economic benefit of energy reductions – and therefore cost – this scheme is something that should be seized upon by all eligible businesses.

CCAs are only available for energy-intensive industries which undertake eligible activities. The Government recognised the need for special consideration to be given to such industries because of their high energy usage. The eligibility requirements to take part in the scheme were originally taken from the existing Integrated Pollution Prevention and Control (IPPC) regime. More recently, it has been possible to demonstrate eligibility by providing data to show that the site is above a certain energy intensity threshold. CCAs are mainly open to manufacturers of primary processes, such as food and drink, chemicals, paper and printing.

The CCA targets are based on either an absolute reduction or a relative reduction determined by production levels at the site. Those who take part report their performance through their Trade Federations which then provide sector results to DEFRA. If the site over-achieves or has a shortfall, they are able to sell or buy carbon allowances through the UK carbon trading scheme (a separate market to the EU carbon market). It’s interesting to note that many of the UK installations in the EU ETS are also in a CCA.

Carbon Reduction Commitment (CRC)Both the CCA and EU ETS have incentivised greenhouse gas emission reductions within energy-intensive industries. Now the Government has announced it is to bring in a new emissions trading scheme with the aim of reducing carbon emissions in non-energy-intensive sectors.

The criteria for mandatory entry into the scheme will be UK-based organisations using an annual total of 6GWh of electricity or more from half-hourly supplies across the whole of the organisation. All emissions will be reportable under the scheme – both from direct and indirect supplies.

So, how will it work? The scheme will follow a similar model to the EU ETS, based on a ‘cap and trade’

scheme. The CRC will be set up to be revenue neutral for the Treasury – with all the monies generated by those taking part recycled back to them, depending on their performance.

Those taking part in the CRC scheme will be ranked on their performance within a published league table. That in turn will be based on absolute emissions along with additional metrics, including an early action metric and one which will take into consideration growth within the organisation.

The CRC league table will dictate how much revenue from the sale of carbon allowances is recycled back to CRC participants – the higher a participant’s ranking, the higher the recycle rate. So, an improved league table performance – reflecting a reduced energy usage – translates into a direct financial return. The league table, being a published document, will not only present a financial risk associated with the scheme itself, but also a reputational risk if a participant’s performance is disappointing.

Parent companies will be the primary CRC participants. They will be responsible for all energy use emissions within their organisation, including those of their subsidiaries. In the case of the private sector, the highest UK parent organisations will be identified with reference to the definitions set out under the Companies Act 2006.

Multiple emission trading schemes – benefit or hindrance?With the addition of another major climate change programme coming into operation in just over a year’s time, there is a risk of emission scheme overlap, an additional administrative burden and general confusion among participants.

Some organisations will be involved in all three schemes, with sites reporting into more than one of these carbon trading schemes. The Government – through its Climate Change Simplification Project – has aimed to reduce or even eliminate any avoidable overlap. The paper recognises that some overlap between emission reduction schemes is unavoidable. However, they acknowledge the need to identify the overlaps and manage them to remove any unnecessary burden to UK businesses.

So, how can ‘double counting’ be avoided? Well, there is a mechanism in place between the CCA

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The only way of winning is to reduce energy usage on site – as apart from the obvious financial benefits of reducing actual energy costs – you can benefit from trading surplus carbon allowances and, in the CRC, from improved league table performance

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and EU ETS, although some believe it does not work fairly. This would normally operate by adjusting CCA milestone results to account for over or under achievement already reported in the previous year’s EU ETS performance, or – as an alternative – either cancelling or retiring surplus EU allowances.

The Government aims to minimise the number of organisations covered by both CCAs and CRC. Subsidiaries (or entire CRC organisations, if no subsidiaries exist) with more than 25 per cent of their energy use emissions in a CCA will be excluded from the scheme (figure 1). However, if the subsidiary or organisation stops participating in a CCA, they would then be included in CRC.

Furthermore, direct emissions covered by the EU ETS will be exempt from the CRC (just as CRC will not target any CCA emissions). However, the Government will not specifically exempt any EU ETS organisations or installations from the CRC. Emissions at EU ETS installations which are not covered by EU ETS (mainly electricity usage) will be included in the CRC – assuming the organisation as a whole meets the CRC qualification threshold.

So, as an organisation trying to understand this mix of schemes, what should you be doing and how can you win? Most importantly, you need to ensure that you are fully complying with the monitoring and

reporting requirements of these mandatory schemes. This currently involves the EU ETS and shortly, the introduction of the CRC. The only way of winning is to reduce energy usage on site – as apart from the obvious financial benefits of reducing actual energy costs – you can benefit from trading surplus carbon allowances and, in the CRC, from improved league table performance.

If you are eligible for the CCA, but have missed the initial sign-up, it’s not too late. You can still join and gain the valuable CCL discount. However, time is short, as entrants to the scheme must apply before September 2009.

Sustainablemanufacturing

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“Emissions reduction schemes have been designed to reduce the risk of climate change which, as we already know, may bring increasing global temperatures, rising sea levels, changes in weather patterns and a higher probability of extreme weather

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Figure 1. Establishing if an organisation will be included in the CRC

Is the installation part of the EUETS?

Are part of theinstallation’s emissions in a CCA?

Does the organisation’s electricity usetotal more than 6GWh p.a. from half hourly supplies?

Is the installations in a CCA?

Are more than 25% of the installation’s emissions covered by a CCA?

Your organisationis exempt from CRC

Your emissions not covered by the EU ETS will be included in the CRC

Does the organisation’s electricity use total more than 6GWh p.a. from half hourly supplies?

The organisation is not included in any of the UK Emission ReductionSchemes

Yes

Yes

YesNo

No

No

No

YesNo

Yes

Double counting will need to be taken into consideration

No

In the current economic climate, the world of energy has

changed as we know it, with wholesale prices becoming increasingly volatile and financial pressures on both domestic and commercial energy customers growing. Clearly the manufacturing industry, though resilient and robust, is no exception to the challenges of conducting business under the growing threat of global recession.

“We’re seeing something that is quite unprecedented in terms of the credit crunch and what that really means to business,” explained Jeff Whittingham of British Gas Business, who has been monitoring the situation closely. “In fact, the world is completely different. In addition, the UK energy market is now much more heavily influenced by world energy prices than it has ever been before.”

Whittingham was keen to hear what specific pressures manufacturers are coming under in order to understand how best British Gas Business can assist firms in their drive to manage their energy costs.

At a dinner hosted by British Gas Business and The Manufacturer magazine, several representatives of manufacturing firms across the UK met with Jeff Whittingham and Tim Hooper of British Gas Business to discuss the most pressing issues affecting manufacturers today – and how a new way of managing energy usage could deliver significant cost savings. Becky Done reports

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British Gasroundtable report

Specialfeature


British Gas

David Mansfield, operations director at Martek, explained that in the current climate, manufacturers are finding it increasingly difficult to predict what the next big commercial concern will be: “Three months ago we were worried about the price of diesel, with our fuel bill for 16 vans going through the roof. Now, we’re worried about how much it’s going to cost to re-finance them.”

Martek, for its part, has been proactive in its approach to the problem. This year, with a waste disposal bill rising by around 40 per cent and a gas bill by 30 per cent, Mansfield has taken the initiative, investing £85,000 in a wood burner that will burn site waste down to harmless potash. As well as minimising the company’s waste disposal bill, it is hoped that the heat from the wood burner will go some way towards mitigating energy bills. Payback for the project was estimated at around 18 months, but in reality Mansfield expects it to be much sooner, due to having received a grant from the Carbon Trust to fund the project.

This last point is crucial. With uncertainty in the financial markets having such a profound impact on manufacturers’ businesses, can anybody currently afford to invest in a project with a payback period of 18 months – let alone several years? Bryan Toye, chairman of Toye, Kenning and Spencer commented: “The issue is around affordability and prioritising. I can only afford to do so much, depending on achieving budget. There are many priorities and some projects just cannot be achieved within one’s disposable income, since cashflow is paramount.”

Being eligible to receive a grant for the wood burner means that Martek should realise almost immediate financial benefits from the project. However, for larger manufacturers, funds are far less accessible, as Alan Jones, managing director of Beatson Clark discovered: “We had the Carbon Trust in two years ago. They did a wonderful – and free – survey; however, we’re not an SME. When it comes to implementing a £400k investment here, and a £600k investment there, with a three- to four-year payback, then it doesn’t work. Major manufacturing doesn’t have the same funding available; we need support. Why stop with a SME? If it’s energy efficient, carbon neutral and sustainable, why not support us all?”

Gareth Stace, head of environmental affairs at EEF, outlined the predicament that many manufacturers face: “You’re pulled very different ways because Pollution, Prevention and Control asks you to do one thing; the Climate Change Agreement asks you to do another; and EU ETS another. And then you have to make a profit as well, so it can be a real overlap and conflict of policies.”

With such diverse issues to tackle, it is vital that manufacturers can find a comprehensive solution to assist them in managing their energy costs. British Gas Business is able to offer a complete package – from conducting on-site energy audits and installing smart metering, to implementing other technologies such as remote assistance for manufacturers to further aid reduction of energy consumption. “We believe that all SME customers and all large customers should have smart metering, which is the ability to get reads from your supply on a half-hourly or daily basis,” explained Whittingham. “So when you get your bill, it will be very accurate.”

Advances in metering technology can also deliver significant benefits to the customer through facilitating greater clarity of information and energy awareness. Stace agreed: “I recently went to see a company – a fairly large energy user – and they were really excited because they had access to the internet link showing their usage peaks. But it was showing usage peaks on weekends – despite them not operating on weekends! And it was only then that they noticed it.”

“Ultimately,” continued Whittingham, “what we want to do is to really help manufacturers to manage their energy assets on-site. We want to create a situation where we can guarantee to take 10 per cent off firms’ energy consumption by getting actively involved – moving from just providing advice to actively helping manufacturers to reduce their energy usage.”

Martin Bragg, business development manager for the manufacturing sector at law firm Pinsent Masons, agreed with the proposed model, pointing out that clarity of cost is key in any business relationship: “The greatest opportunity we have to persuade our clients that we’re working for their benefit is to help them manage their costs beforehand. We work hard with clients to accurately scope work up front and let them know how much an invoice will be before billing.”

Tim Hooper of British Gas Business agreed. “We’d certainly be very clear about what the project is, what it’s going to deliver and how much,” he emphasised.

“The basic principle of what we’re looking to do is to get more actively involved,” Whittingham reiterated. “We have the Carbon Trust’s reports; but there isn’t anybody out there that can deliver the requirement end-to-end. We have looked for that silver bullet company; what we found instead was a series of very small companies who need bonding together and scale bringing to them.” British Gas Business intends to do just that, seeking funding from potential investors to support the implementation of providing an end-to-end service.

“Customers are starting to bring energy consultants in on these issues; so as a business, we can either stand back and watch, or we can get involved,” explained Whittingham. “The benefit to British Gas Business will be to switch from being an energy supplier to providing energy services. We’re moving towards a world where customers can incentivise their energy supplier not only to supply the commodity, but also reduce consumption of it.

“At the moment, people see us as an energy supplier. We want them to see us as an energy service company,” he concluded.

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At the moment, people see us as an energy supplier. We want them to see us as an energy service company

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“

Last month we started building the VP phase cars to be used for final development and type approval. This month we have been continuing the VP phase and have also been preparing to build the first EP Federal cars

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Development

journeyEvoraThe

A of product developmentdiary

At the time of writing, the first VP car has progressed successfully through our production system. It has proved that the vehicle design is robust for manufacture. The learning from this car is being applied to each following car, which enables the team to identify further continuous improvement opportunities.

For the earlier EP builds (engineering prototype), all of Evora’s body panels were produced and laminated in-house. VP is our first opportunity to validate ‘supplier’ produced body panels. The quality and finish of these panels is already impressive. The tools that currently produce these parts are made of steel and they allow for any fine adjustment or changes to the panel surfaces. Once they have been totally proven out these steel tools will be chromed and become the ‘bought off’ body panel tooling to make production ready parts.

The start of production’ (SOP) for saleable cars is Q1 2009. Before then we will carry out a pre-production EP phase for the American market. These so-called Federal EP cars will be built in the next few weeks. There will be additional requirements for these cars so that they meet the different Federal legislation such as for emissions and crash testing.

Building EP cars and VP cars together will add complexity to the jobs of material control and internal logistics that must make sure we have the relevant parts to cater for the different global markets. Fortunately, by having a dedicated assembly line for Evora, we have been able to facilitate the best layout for parts line-side to ensure right part/right place/right time delivery.

Next month we will cover how we have gone about building the Federal EP cars and how we have gone about our ‘station readiness’ preparations for the first 20 production cars (to be built in the New Year).

After Evora’s superlatively painted body panels leave the

paint shop, the assembly production system for Evora is divided into three main functions. The first builds the running chassis and bonds the car’s side panels, roof and screen-surround, and assembles the car’s doors. The second factory is responsible for fitting the main front and rear end panels and progresses Evora’s trim interior eg seats, carpets, dash etc. It will also have had its wheels fitted, fuel, air-con, oil, power steering and brake fluids all processed – and then it is all ready to be fired up. VRRROOOOOOM!!!

Finally the car will be tested on our rolling-road facility followed by its suspension and steering being very finely calibrated. All the VP cars will be presented for a final ‘pass-off’ by our quality department.

Evora presents us with a new way of building cars. The Elise, for example, has its rear sub-frame and front structure built up on the chassis to form a single unit. The Evora, however, is different. It consists of three main modules, which are pre-assembled separately, and then brought together and ‘married’ to form the structure of the car. This allows greater flexibility and efficiency within the production system and offers advantages in terms of low cost of repair.

Already, there are 32 possible combinations for the rear engine and 24 combinations for the front crash structure! Customer options such as suspension type, left hand/right hand drive, painted/non-painted callipers, brake discs, oil cooler options etc are more easily made available. This means each module can be specific to meet the customer’s exact requirements. It also allows us to plan and organise our production schedules and minimise our material inventory stocks through just in time (JIT) delivery.

We believe that customer feedback is critical in helping us to

establish our strategy, so as to deliver what they want.

Sometimes, thankfully, customers are very direct in giving it! Just after our acquisition of the business from administration, we had a robust assessment from one key customer’s buyer on his first visit. He told us simply: “I have six sheet metal companies; and I have six sh*t sheet metal companies.” But he also told us that he had significant levels of work to place.

So the starting point for our initial turnaround strategy was clear from the outset: our job was to become the best sheet metal company he could wish to deal with, providing him with a flexible manufacturing resource, short lead times, and OTIF deliveries at zero PPM. Not too much to ask for from a supplier, after all.

Deliver that, we decided – through the introduction of lean manufacturing techniques – and we would get more business from our existing customers. And this is indeed, what is now happening.

Applying lean techniques to our operations gave us more capacity, which we needed to fill so as to really benefit from the improvement work. So we also knew we needed to attract new customers, which could be a particular challenge in today’s marketplace.

To do so, firstly potential customers needed to know who and where we are, so we invested in our sales and marketing effort with a new website – www.kanbans.co.uk – a new brochure and additional sales staff, together with extra design and estimating staff to back them up. This strategy seems to be working, as new customer enquiries are up, with the prospective annual value of new work currently being

quoted now topping £3 million. Quotes are all very well, but we needed potential customers to decide to use us.

The problem of how we persuade customers to actually switch to us was brought home by one prospect who complained that their existing supplier “always quotes us three weeks and is always three weeks late.” Yet when we quoted a one week lead time at a competitive price, we still did not get the order, as: “at least we know where we stand.” Clearly we needed a way to differentiate ourselves and to signal our absolute commitment to service levels so that prospective customers would be prepared to take the risk of placing that crucial first trial order.

Last month, we issued a simple promise to all our prospective customers, one that gives a definitive statement of our principles, so all our prospective clients know where we stand. So (aside from some basic terms and conditions) if our delivery is late, our work is free. We will report back on how prospective customers react to this proposal...

Paul Bell is a Cambridge and Cranfield graduate and manufacturing improvement consultant. He founded Manufacturing Excellence, the north’s leading specialist in lean and agile manufacturing consultancy and training. Email: [email protected] Tel: 01748 831908

Mark Blayney is a chartered accountant, MBA, member of the Institute For Turnaround and MD of Turnaroundhelp, a consultancy specialising in crisis financial management and the mentoring of owner-managed businesses in recovery, as well finance raising. Email: [email protected] Tel: 01434 345528

Takeoverdiary

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takeoverA diary of a Kanban Sheet Metal… ...Delivered on time, or customers get the work for nothing

This month Mark Blayney and Paul Bell, owners of re-launched Wigan manufacturer Kanban Sheet Metal, take a look at how marketing has been married up with vastly improved production capabilities to produce an offer almost unheard-of in their sector

Manufacturing inactionPutting UK manufacturers under the spotlight

“Now more than ever, our customers are looking to reduce overall operational costs

and enable their logistics to deliver what their businesses require to compete”

DematicFactory of the month

“It was such a fantastic achievement for us to be recognised by The Manufacturer

for our commitment and dedication to sustainable development”

Boss DesignFurniture

“In our way of thinking, it’s people who make things happen and you should never do anything in this period to compromise or

jeopardise their safety. You can never take anything for granted”

Regal PetroleumOil & gas

“A great idea can come from anywhere. Of course we want to encourage people to come

forward with those ideas because we might just find the next little gem in Gripple’s future”

GrippleSuspension equipment

“We’re watching our backs but I think it’s safe to say we’ve found some relatively

comfortable shoes in which to outrun this recession”

Drallim IndustriesElectrical equipment

“Every day [Westbridge] is looking at new methods of working, new ways to save

costs or operate differently; embracing all different aspects of process

and manufacturing”

Westbridge Furniture DesignsFurniture

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We speak with Philip Makowski of Dematic – one of the world’s leading logistics systems providers with operations in five key regions: northern Europe; central Europe; southern Europe; Asia-Pacific and North America

wayLeadingthe

Factory of the monthDematic

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Dematic describes itself as “an enabler of logistics and businesses strategies” through system planning and application. It provides logistics solutions to retail, wholesale, manufacturing and food and beverage firms, with systems for small, medium and large operations. Over the last year Dematic has had significant orders and completed systems for a large range of companies including Amazon, Black & Decker, Bosch Rexroth, Cadbury, Coca Cola, Dansk Supermarked Group, Games Workshop, NewEgg.com, Next, PepsiCo, Roche, Siemens, TK Maxx and Zara.

Dematic turns over around 800 million euros per year and has over 3,000 employees spread across the regions in which it operates. The history of the company can be traced back half a century. Furthermore, “in the markets we concentrate on, we are the global leader in logistics systems,” asserts the company’s marketing manager, Philip Makowski.

The company supplies customer-specific logistics solutions based on modular, standardised subsystems and technologies. Examples of these are automatic storage systems, automated and ergonomic palletising equipment, conveyors and monorails, voice-picking applications and high-speed picking technology. It integrates these technologies, including the software, controls and mechanical components based on the specific logistical requirements of clients.

The solutions are developed to address the specific business and logistics challenges faced by a client, and deliver increased productivity, cost savings and improved accuracy.

“Whatever the challenges are, we will design a client-tailored system using standardised components to address clients’ specific logistics and operational challenges,” said Makowski.

Dematic’s focus is dependent on the regions and individual markets it operates in. For example in the UK, with the retail and food and beverage manufacturing industries being major drivers of the economy, the majority of systems delivered by Dematic are in these sectors. In places like Germany and China where manufacturing industries are more prominent, the company has delivered more systems for manufacturers.

The drivers for logistics systems can also be very different from country to country as well as from sector to sector, ie the logistical requirements for a manufacturing firm in China will differ considerably from one here in the UK. In Europe, labour and land costs and ergonomics are among the most important factors to be taken into account when designing a logistical system. In the Far East however, it is factors like accuracy and speed of delivery. “Labour costs are cheaper in the Far East so systems tend to be more labour intensive over there. In Europe, systems tend to be more highly automated to reduce labour costs, reduce building footprint and improve operator ergonomic,” said Makowski.

Whatever the challenges are, we will design a client-tailored system using standardised components to address clients’ specific logistics and operational challenges

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Storage designed for youEsmena Storage Systems manufacture a wide range of innovative storage systems on a global basis. Manufacturing plants are currently based in Spain and Brazil

in continuous development is supported by a highly trained workforce (many are engineering graduates) placing a strong emphasis on complete project management control.

If you would like to know more, please contact us using the details below.

pharmaceutical automated crane swept pallet storage structures exceeding 100,000 pallet locations for major retailers in the UK.

Esmena’s growth around the world and current strength in multiple marketplaces has been achieved through its commitment to major project development and management: by offering a complete service to the customer, whether end user, agent, or major integrator. Esmena believe that always being willing to consider new ways to solve old problems, often by investing in new tooling to create new cost effective products, is the only way to stay ahead of the market. This belief

The extensive product range has been designed to meet varied requirements

from small parts storage, through multi-level pedestrian accessed archive storage systems, to automated crane swept high bay warehouses, and completely self contained rack clad storage buildings.

Working with Dematic throughout Europe, Esmena has become a ‘partner of choice’ by developing innovative beam and shelf products to meet end user requirements for cost effective storage. These include multi-level clothes storage structures, picking and retrieval rack clad buildings in Spain, and food and

Published in association with: ESMENA SLU

Tel: 0034 9851 78000 Email: [email protected]

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Factory of the month

The Captive version is key to Dematic’s Full Case Order Assembly solutions – semi or fully-automated order fulfilment solutions that build multi-SKU dispatch units, either pallets or roll cages, specific to customer requirements and with a productivity of up to five times greater than manual systems.

According to Makowski, “the Multishuttle has been very successful. Dematic has now implemented the Multishuttle for a diverse range of companies including Siemens, Bosch Rexroth, and meat producer HK Ruokatalo, with over 1,000 shuttles sold to date. And there is strong interest from many companies in the UK and Europe for solutions integrating the Multishuttle.”

“Setting up logistical systems is not simply about making operations as efficient as possible with no expenses spared; you have to deliver a strong return on investment. It’s not enough to have the best technologies, it’s also about understanding the client’s business and being able to integrate the technologies – including the software and controls – into an intelligent optimised solution that addresses all the client’s challenges in the most cost effective way.”

This customer-driven philosophy flows through to solution and technology development within Dematic. Research and development is based on a thorough understanding of key market trends and drivers and experience of the challenges faced by customers in the different industries. This drives the development of new concepts, solutions and technologies that enable these solutions. The success of recent developments such as the Dematic Multishuttle and Dematic’s Full Case Order Assembly solutions is testament to this market-driven development.

The Dematic Multishuttle is a major evolution for automated storage and retrieval systems, increasing throughput, flexibility and in-built redundancy at a reduced cost relative to conventional automated storage systems. Handling cases, totes and trays, a system consists of multiple shuttles servicing multiple storage levels.

The Roaming version, with one to three shuttles servicing multiple storage levels, is ideal for low throughput, cost effective storage solutions, such as manufacturers’ kitting and spare parts operations. The Captive version, with a shuttle per each level, delivers the highest throughput currently available in an automated storage system, with up to 500 double cycles per hour per aisle.

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It’s not enough to have the best technologies, it’s also about understanding the client’s business and being able to integrate the technologies – including the software and controls – into an intelligent optimised solution that addresses all the client’s challenges in the most cost effective way

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Productivity is priorityFletcher Moorland are the experts to call when a crane failure or a sorter breakdown threatens to delay your supply chain

emergency service is available 24 hours a day, including weekends for critical breakdowns. For all normal service repairs in the UK, we offer a free collection, inspection and delivery. Call our friendly customer services team and find out how we can improve your repair process.

such as electronic drives and controls, motors and gearboxes from high bay cranes, through to linear motors, CDUs, controllers, servo motors and drives and PCBs used on automatic sorters.

Investment in high tech test equipment means we are able to repair and test equipment from many different manufacturers, such as Dematic, Revcon, KEB, Indramat, Rexroth, Siemens, Phoenix Contact, Stober, SEW & Flender. Most important of all, we guarantee that each of our repairs will work for at least 12 months.

Distribution sites operate 24 hours a day, and so do our repair workshops. Our

Fletcher Moorland have been working with Dematic to provide a seamless

repair and service solution across the entire range of automation equipment found in distribution centres.

Our repair service has meant reduced costs and downtime for some of the biggest supermarket, retail, postal and mail order distribution companies in the UK, Europe and the USA.

Fast turnarounds, fully tested and guaranteed repairs are key factors to support distribution companies. Our workshops have the expert knowledge and capability to repair and fully test equipment

Published in association with:FLETCHER MOORLAND LTD

Tel: 01782 411021 Fax: [email protected]

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Factory of the monthDematic’s relationship with its clients doesn’t stop at the handover of a system. “Any mechanised solution needs regular maintenance and servicing to ensure it runs at its maximum performance. Dematic have a comprehensive after-sales support infrastructure to support that,” said Makowski.

Each region has a dedicated local service support team for fast responsiveness to customer service requests. For customers who want to reduce the risk of maintenance and service, Dematic can take on the complete service and maintenance of the system with a resident engineering team. This is particularly effective for companies that want to maximise system performance and make sure that staff are compliant with the knowledge and experience required to service and use particular equipment. The firm has onsite resident teams with many customers including BMW, Sainsbury’s, Carlsberg, Coca Cola, Screwfix and Dairy Crest.

Secondly, as companies grow and their logistics operations evolve, Dematic works with them to upgrade their existing systems or implement a new one. “That’s

Dematic

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Structural supportMezzanine International have worked with Dematic for over 12 years. Dematic are one of the world’s leading systems integrators and demand total professionalism from their partner suppliers

Staircases, ladders and balustrades complete our successful projects, with our installations carried out using our highly experienced teams who travel the globe for us and our partners.

The most recent projects Mezzanine are working on with Dematic include a large distribution centre in the north-east of England, incorporating spans of over 18 metres, with more than 2,000 tonnes of steelwork involved in the design.

Another is a very complicated automated warehouse installation in northern Denmark, with monorails, elevated pallet transfer cars and ergonomic order picking positions with suspended scissor lifts supported by our steelwork.

Mezzanine International have gained unequalled experience in the field of

structural support for plant and machinery in the UK and other European countries, working with conveyor and machinery manufacturers, consultants, architects and engineers.

Projects range from a few thousand pounds up to some in excess of four million. Mezzanines with floor areas of over 48,000 square metres have been completed within recent years.

Published in association with:MEZZANINE INTERNATIONALTel: 01622 872871Fax: 01622 873253 Email: [email protected]

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Factory of the monththe strength of Dematic; we regularly get repeat business from our customers through the success of the systems we deliver and the strong customer service we provide,” said Makowski.

As Dematic delivers improved productivity and efficiency gains for customers’ logistics operations, more companies are turning to them in these economically challenging times. Companies are looking to become more efficient and reduce costs in order to survive. “Now more than ever, our customers are looking to reduce overall operational costs and enable their logistics to deliver what their businesses require to compete,” said Makowski.

Makowski reinforces the main company culture within Dematic as customer-driven. “Our culture is all about working closely in partnership with clients. We ensure we have a very clear and thorough understanding our clients’ specific requirements so that our solutions deliver what they need. We work closely with customers during the implementation phase of a project and on completion of a system to ensure that their system delivers their logistics and business requirements, now and into the future.”

Dematic

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Now more than ever, our customers are looking to reduce overall operational costs and enable their logistics to deliver what their businesses require to compete

“ “

It was the end of 2007 when The Manufacturer last spoke with Virginia Seaward, head of operations at office seating manufacturer Boss Design. At that time, the company was embarking on kanban and waste minimisation technique implementation as part of a wider lean programme. So, how had things progressed, I wondered?

“The introduction of lean techniques improved production,” said Seaward, “and so we have decided to do a second phase. But, as usual, we don’t want to go in all guns blazing and try to change everything at once – as a business we like to put something in place and actually see that it works and everyone is comfortable with it first. We’ve got to the point now where we feel we can begin looking at 5S.”

Significant streamlining has also been key to efficiency improvements at Boss over the last 12 months. A new 8,000 square foot mezzanine has increased production floor space, and localised picking areas have dramatically reduced the amount of worker downtime.

Still glowing from her company’s success at The Manufacturer Awards 2008, Virginia Seaward updates Louise Hoffman on the changes that have occurred at Boss Design over the last year

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developmentS u s t a i n a b l e

FurnitureBoss Design

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“We have also moved our warehousing out of the main facility,” added Seaward. “So now we send ‘shopping lists’, for want of a better word, down to the warehouse where they pick all of the pieces we need for the products that are to be manufactured the week after.”

This steady and prudent approach to continuous improvement has rewarded the firm with a valuable increase in throughput, and has enabled it to add value to its service offering. And with added value comes added business.

“We’ve just won the government OGC contract – a fantastic achievement for Boss!” Seaward enthused. “OGC is the government procurement department which purchases all the office furniture on behalf of most other government departments, and it’s always been one of the most sought after contracts in the industry. We really made a lot of effort with our add-ins and extras to make sure we secured it.

“We are newcomers to the contract and for us to beat all of that competition, well, it speaks volumes about what we’re like as a business.”

Not only this, but Boss Design has also been responsible for fitting out the Birmingham Post and Mail offices on the top floor of the Dunlop Building and has completed a large project for Lloyds TSB – delivered on time and 100 per cent snag free.

“We’re doing really well,” Seaward began, “and a lot of this comes from the fact that, as a manufacturer, we have recognised with foresight that we need to be meeting the demands of the client. We haven’t rested on our laurels and waited for business to come to us before reacting, but rather we’ve reacted in order to attract business.”

Indeed, one of the main aims of Boss’ designs is to answer the needs of clients before they themselves even know what they want. Take the new Layla Landscape collection, which is made up of module pieces that can be laid out in any way desired, taking into account the shape and size of the reception or recreation room the seating inhabits. And the Lily chair – just one example of Boss’ ongoing commitment

We haven’t rested on our laurels and waited for business to come to us before reacting, but rather we’ve reacted in order to attract business

“ “

Operational excellencePendle Engineering ltd are specialists in CNC tube bending, manufacturing

bespoke frames and parts for leading names in the office furniture, health,

horticultural, leisure and construction industries

machines, 6 axis robot welders, a 6 axis laser cutting machine and an in-house powder coating plant complete with auto recycling colour change booth. All of the above investment ensures that we can offer a complete manufacturing service.

as building trusses, exercise and leisure equipment, street furniture, automotive parts, retail fittings and many more. As well as tube bending we specialise in welding and fabrication to offer a complete tube manipulation and fittings fabrication service.

We have a constant investment programme to keep up with our ever changing world, investing in new equipment and machinery to house in our 63,000 square foot factory. This includes CNC saws, CNC bending machines capable of left, right and multi radii bending within the same cycle, CNC vertical milling

Operating a highly skilled workforce delivering engineering excellence, we

are dedicated to providing customers with products known for their superior quality and reliability from our easily accessible, modern factory in Lancashire, which is ideally situated next to the motorway network. We are proud of the high standards we operate to and are approved to ISO 9001:2000.

We have extensive experience in the manufacture of office furniture components and parts, such as seating and desking, including height adjustable. We also manufacture other products such

Published in association with:PENDLE ENGINEERING LTD

Tel: 01282 699 555 Email: [email protected]

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Furniture

“Brian started the business back in 1983, and it was his expertise that made us the business we are now – 25 years old and turning over £26 million per year. And we’re looking forward to growing that as well,” said Seaward.

As for anniversary celebrations – “We’re opening a new showroom in Clerkenwell, London in January, and we’re actually going to hold a 25th anniversary event at the same time. The launch of the showroom is a perfect way to mark the occasion – it’s going to be the flagship of our business and we intend to make the most of it!”

to add both recyclability and recycled content to its products.

“Environmental issues for seating are phenomenal these days,” Seaward pointed out. “It’s not just a case of selling the product, it’s a case of selling the business. It’s about being confident enough to sit down in front of clients and say, yes, we manufacture very high quality furniture, but we are also a very good environmental and community supporter. And it can’t just be said, it has got to have substance to it – it’s got to be backed up by proof and data.”

And the business certainly sold itself at the recent Manufacturer Awards 2008 – winning the Sustainable Manufacturing accolade with impressive enthusiasm! “I was so excited!” Seaward grinned. “It was such a fantastic achievement for us to be recognised by The Manufacturer for our commitment and dedication to sustainable development, and I was very proud of everyone at Boss when we won that award, because it was not just down to one person or one thing, it was down to everybody. Sustainability is not just about ticking boxes either, it is done to make a difference.”

Sustainability is also not only about the environment, and Seaward recognises the importance of skills to the continuation of not only Boss’ success, but also the success of the wider UK manufacturing sector.

The company has this year taken on its first apprentice in the field of IT, with the intention of extending this scheme to offer apprenticeship opportunities in many other of its departments, starting with the upholstery area.

“This is one of the reasons we won the award – because we are sustaining our employment route. It is a major thing, especially in manufacturing. You’ve got to be aware of your levels of staff, the health and welfare of your staff and the age of your staff, and if you’re not switched on enough, then before you know it your workforce has depleted and you’ve got nobody to replace those you have lost. If manufacturers aren’t worried about that, then I’m worried for them!”

It is this considered approach and focus on design and quality that have allowed Boss Design to reach this, its 25th year of successful operations. And what better way to mark such a milestone than for its founder, MD Brian Murray, to be presented with a Lifetime Achievement award at the Mixology Awards.

Boss Design

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It was such a fantastic achievement for us to be recognised by The Manufacturer for our commitment and dedication to sustainable development

“ “

Delivering excellenceEstablished in 1998, PESECo have supplied many different operators with equipment and engineering consultancy services for drilling/production operations on a worldwide basis. We have become well known for our ability to deliver within relatively short time frames and, in more general terms, to “get the job done”

wellhead equipment and Christmas trees rated for 10,000psi working pressure. Delivery time was critical as two drilling rigs were contracted and due on site during the summer of 2008.

The target delivery dates for delivery of all materials were achieved and Regal are about to commence drilling operations.

We wish Regal every success with their operations in Ukraine and will continue to support them to the best of our ability throughout the campaign.

We are aware of their plans to drill numerous production wells over an

The equipment we’ve supplied has been used in the UK, Norway, west

Africa, north Africa, Iraq, Turkmenistan, Azerbaijan, Pakistan, Bangladesh, Australia and Vietnam. Our customer list includes Shell, Woodside and Statoil, however the bulk of our business has been with smaller operators such as Regal Petroleum who contacted us in the autumn of 2007 and told us of their plans to drill some reasonably deep and potentially difficult wells in Ukraine.

The drilling programme called for some high grade casing and tubing together with

Published in association with:PESECo

Tel: +44 (0)1569 765555Fax: +44 (0)1569 764779 Email: [email protected]

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extended period once these first few appraisal wells have been completed and assure Regal of our continued support over the coming years.

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Oil & GasRegal Petroleum

When David Greer OBE became CEO of Regal Petroleum in 2007, he took on a challenge. Over the few years prior to his joining, this company had seen serious financial losses, angry shareholders, court proceedings and some reputation-denting bad press, earning it the label ‘pariah of the stock market’. In reaction to this, the firm had set out to find a partner to support its activities in Ukraine and thus hopefully boost its financial resources. But Greer had other ideas.

“At that time I had a look at the company from the outside – I had just left Shell after 28 years – and myself and two other colleagues decided to join the company, with a view not to find a partner, but rather to try and turn the company around ourselves,” he explained.

And there begins the success story.

The first stages of the turnaround were primarily strategic – internal reorganisation, rebranding, refinancing, and the choosing of new advisors such as brokers, nomads and PR agencies.

“We also rationalised our portfolio,” said Greer. “We sold Greece and Liberia and kept Ukraine, Romania and Egypt. And we rationalised the focus we had; our attention is now on appraisal and development, no real green field exploration – just appraising and developing the resources we already have on our books.”

Finance was vitally important as the company was down to its last $6 million. “We seized a window of opportunity and used that limited amount of money to shoot 3D seismic in Ukraine and to appoint sub-surface consultants to help us quantify the upside in the property we had. This then meant we had to go out and raise new money, which we did in January 2008.”

The fund raising proved a vast success, with Greer sourcing $165 million that month, and a further $40 million the following July.

“Having sorted the money out, we then turned to the board,” began Greer. “I had been appointed executive chairman and CEO, but I decided to shed the role of chairman to a non-executive. We were absolutely delighted that Mr Keith Henry, the former chairman of Burren Energy and a renowned City figure, agreed to assume the role of chairman. The other two changes we made were the finance director – Rob Wilde, formerly of Baltic Oil Terminals – and a new non-executive director – Adrian Coates, formerly head of the oil and mine group at HSBC.

“Of the board, three of us are ex-Shell, and between the three of us we have about 90 years of international experience. So it’s a much stronger board – it’s got much stronger governance.”

The production operations of the firm have quite sensibly been the beneficiaries of much of the new funding. Regal has contracted two top drive drilling rigs from the United States to replace the somewhat outdated ones that it had been running in Ukraine previously. “The drilling rigs they have there are, shall we say, of a rather distant vintage,” said Greer wittily. “They just don’t have the horse power or the capacity to quickly reach the sort of depths we want to get to in Ukraine. So we’re very pleased to have these two brand new rigs contracted to us for five years.”

Getting a flailing company back on track is no mean feat, especially in the current economic climate. David Greer OBE, CEO of Regal Petroleum, gives Louise Hoffman a lesson in leadership

oil on troubledPouring

waters

Oil & GasIndeed, Greer’s description of this honour reveals another aspect of his leadership style. “The OBE is very nice to have,” he said, “but of course it was the result of an awful lot of effort by an awful lot of people and so I gladly received this award on behalf of everyone who helped towards the achievement of that great project. While it’s my name on the gong, it’s really for them.”

This clear thinking and true appreciation has undoubtedly been instrumental in Greer’s business success, including the impressively rapid turnaround of Regal Petroleum, as he confirms in his vision of the future: “Our goal is to carry on with the transformation and to continue to grow the company so we can realise its full potential. The priority right now is to secure its financial footing, and in doing so we must always maintain the focus on the safety of our people and our assets, because often in these times where money is tight it’s too easy to cut back on certain issues.

“In our way of thinking, it’s people who make things happen and you should never do anything in this period to compromise or jeopardise their safety. You can never take anything for granted,” he concluded.

By the end of January 2009 both of these rigs will be fully operational, with the aim of drilling down to 6,000 metres to prove up the gas in place as quantified by the 3D seismic process.

“That processing interpretation has led to a new definition of gas in place,” said Greer. “We reckon we’ve got 5.2 trillion cubic feet of gas in place both in the upper B sands and the deeper T sands in Ukraine. And that equates to about 860 million barrels of oil equivalent. Now, we would hope to get a recovery factor of somewhere between 30 and 40 per cent of that, which will hopefully give us a significantly higher reserves base beyond the current reserves that we have booked, and we currently have booked 170 million barrels of P1 [proven] and P2 [probable] reserves.

“We also have increased the P3 [possible] volume – what we’d like to do now is to drill those reserves and convert what is currently a P3 figure into a P1 or P2. These two drilling rigs should enable us to answer that question by the second quarter of 2009, and that will lead to increased reserves and, of course, increased production capacity for the company.”

Another aspect which Greer rates highly in the turnaround process is the ability to adapt to change. The oil and gas industry is, after all, constantly at the mercy of the economy, politics and the natural world. I wondered how these factors were currently impacting Regal’s business?

“Well, firstly, Ukraine is highly dependent on importation of gas from Russia, and our focus in Ukraine is very much in trying to use technology to maximise production of domestic gas there, and therefore to make a small contribution to reduce that dependency on Russian gas.

“Where economy is concerned, in the past year we have seen oil price at $140 per barrel, and today it is down at $45 per barrel, which highlights the cyclical nature of the oil and gas business. This is why companies like ourselves always have to be flexible in our planning to cope with the ups and downs. However, it is also true to say that Ukraine gas prices are on a strongly upward trend as they reflect regional gas politics and limited domestic production.

“And of course in Ukraine it’s not just oil price shifts that have occurred – we’ve seen the IMF bailout Ukraine for $16 billion, and we’ve seen the country’s government coalition fall apart.

“There have been changes in the course of the year that have forced our company and companies like us to change their strategy and plans. But I mean, people like myself have worked in this industry when oil prices were as low as $10 per barrel – we managed our way through that challenge and survived. It’s just always necessary for oil and gas companies to change to accommodate such forces that impact upon our economies. The doors of conventional equity are closed for now. Everyone is looking to see what the New Year will bring, and that means keeping options alive in your planning.”

And let’s face it, David Greer has a solid track record of successful planning. In 2002 he was awarded his OBE for the promotion of British industry in the Philippines and for his work towards sustainable development following the delivery of a deep water project called Malampaya. “We built a company from scratch and, together with a great team of people, we achieved the extraordinary thing of delivering this project on time, on budget, and with an extraordinary safety record. It’s not often that occurs these days sadly, so it’s still a project that stands out in that rare category,” he explained.

Regal Petroleum

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services utilised by Gripple since the turn of the millennium. Also based in Sheffield, the company is able to afford Gripple the bespoke care and attention required to bring the right staff in when needed.

Management Bank assigned Gripple a personal account manager, Deborah King, who has been working with them since the start of the two firms’ relationship. She works from Gripple’s site at least once a month in order to keep in touch with what’s happening at the company.

“She understands our culture,” said Edmonds, “and that means she knows exactly what we need and she gets it for us.”

It’s this kind of personalised service along with consistently successful appointments that has led to Management Bank becoming one of only two external shareholders in Gripple – a mark of respect that speaks for itself.

“We wouldn’t allow a company who didn’t have the best interests of this company at heart to share in our success,”

Gripple makes wire joiners, tensioners, suspension systems and earthquake bracing systems – tools used to stabilise things and secure them down. The effectiveness of its products is a close analogy of the HR inside the firm.

“The starting point of any success is first-rate people,” says Gripple managing director Mark Edmonds, “first-rate people and a first-rate culture to support them. Without those you might as well forget about it.”

So how do you ensure you’ve got the best people in the right frame of mind?

Gripple use a company called Management Bank for their recruitment needs. The firm is nearly 20 years old and, as a specialist in manufacturing recruitment, has had its

With a turnover that has rocketed 20 per cent to £25 million in little over two years, the success of Sheffield-based former Manufacturer of the Year Gripple cannot be put down to any one thing. But without its 200-plus employees, none of it wuld be possible at all

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“Peoplebusiness”are the

bedrock of

Suspension equipmentGripple

87

continues Edmonds. “Management Bank make sure they get us the best people available who will fit in with what we’re about and get the job done. It’s in the best interests of our future prospects which means it’s also in theirs.”

A good indicator of the type of person Gripple wants is the range of questions asked at an interview. If candidates are more concerned about how much pay is on offer than their career prospects, then Edmonds tends to doubt they have the dedication he’s looking for. It’s Management Bank’s job to find this type of person, making Edmonds’ job easier when it comes to questioning candidates in front of his desk.

And by all accounts they do it well.

“I can say without equivocation that Management Bank Recruitment see each assignment as finding the right person for us and not just earning a fee,” Gripple founder and chairman Hugh Facey MBE is on record as saying.

To give a flavour of the company culture embedded in Gripple, unlike in many companies these days, the employees aren’t given free shares in the firm. But, as previously mentioned, there are only two external shareholders in the company. Employees buy the shares instead.

Free share schemes are offered by firms as part of a package that offers potential income in excess of a basic salary that often starts below what that worker might usually expect to earn. The free shares bring the basic pay up to acceptable level.

In some cases they are also used as a tool for staff retention. The shares are awarded annually but cannot be sold until a set number of years later. Employees therefore always have the incentive of cashing in shares a year down the line as an incentive to remain on the books.

That’s not the case at Gripple. “Our people invest in themselves and each other. The success of the company and therefore the dividends paid depends on the efforts of the shareholders themselves. And this way the staff see more of the fruits of their labour. It’s a massive incentive for them and it’s a way of ensuring we have the right type of people on board – those that have the confidence in themselves and their colleagues to continually over-achieve.”

Everyone gets their money straight up at Gripple; there are no bonuses for certain factions like sales teams or management. “We believe that if we agree a contract with a firm and then honour that contract – manufacturing and delivering products to the correct spec and on time – that success is down to everybody in the team, not just a salesman,” said Edmonds.

As for holiday, everybody from the directors to entry-level operatives on the shopfloor get the same annual entitlement.

“All of this helps to show our staff that this is very much a team operation and that everybody has an equally important part to play in our success.”

Employee retention rate is also very high, despite the lack of the tactics described above in its respect. “Occasionally people join and decide the job is not right for them or we decide they’re not right for the job, but if people settle in here they tend to stay for a very long time. We have a number of employees here who have been on the books since the company first formed,” said Edmonds, “and that’s 20 years!”

A measure of Gripple’s success, aside from phenomenal growth in profitability, various accolades and an innovative product design that is threatening to define its industry, is its short-term plans regarding its staff numbers. With budgets now mapped out and finalised for 2009, Edmonds has calculated that he can take on a further six staff next year. Modest it may be, but expansion of any kind is becoming increasingly scarce. Simply planning to keep the staff they have on the payroll might make positive press for a manufacturing company in the current economic climate so a steady growth in numbers certainly reads well.

And as far as this company is concerned, ‘steady’ must surely be the operative word. A Gripple that isn’t defeats its own purpose.

This year, Gripple is holding its inaugural annual innovation contest which Management Bank has sponsored. This is a competition open to any employee in which the workers submit their own design for a new product in the Gripple line, a new element to the production process, a more efficient operation procedure or pretty much any innovative idea from which the company might benefit. The prize for the winner is £500.

“A great idea can come from anywhere,” said Edmonds. “We’ve got a highly motivated and intelligent workforce whom, as we’ve said, are investing in their own futures. This means our environment is primed for those ideas to flow. Of course we want to encourage people to come forward with those ideas because we might just find the next little gem in Gripple’s future.”

Edmonds is adamant that Gripple would not be in the position it is now without the workforce it has had over the last 20 years. “Everybody is on board together. We like to think of Gripple as an extended family, one that’s expanding all the time but knows where it came from and what it’s all about.”

His advice to other manufacturers? “Respect your staff and they’ll respect you. Simple as that.”

business”Our people invest in themselves and each other. The success of the company and therefore the dividends paid depends on the efforts of the shareholders themselves

“ “

Complete solutionsChemigraphic limited is one of the leading providers of electronics manufacturing services (EMS) solutions in the south east

We are committed to continuous investment in technology to provide our customers with manufacturing solutions using the latest hardware and techniques. We have the skills and scope to offer an unparalleled service to the most demanding of clients.

based); hardware (embedded CPUs and programmable logic)

• PCBdesign(mentorgraphicsandP-CAD)• Globalsupplychain• SMTassembly(0201,BGA,

MicroBGA, Fine Pitch), inline AOI and X-Ray equipment

• Conventionalthrough-holeassembly• Electro-mechanicalassembliesincluding

chassis, cabinet wiring and systems • Weofferafullarrayoftestservices

designed to complement and meet the specific needs of each customer program

• WecanprovidebothRoHScompliantandnonRoHScompliantproducts

Operating from a 40,000 square foot purpose-built office and factory

complex in Crawley, West Sussex, Chemigraphic specialise in the design, development and assembly of printed circuit boards, chassis, boxes, cabinets and systems, with all products fully tested to customer requirements and including full system integration when required.

Chemigraphic are able to offer a broad manufacturing service from printed circuit board assembly through to complete system assembly which includes full turnkey capability.

Our services include: • Developmentsoftware(realtimeandPC

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Published in association with:CHEMIGRAPHIC LIMITED

Tel: +44 (0) 1293 543517 Email: [email protected] www.chemigraphic.co.uk

Electrical equipment

Drallim Industries is made up slightly differently to most manufacturing firms. It was started by a man called Angus Millard as a way to produce and market an innovative pneumatic valve that he had invented. Drallim then existed for a good many years as a varied engineering company. When Millard retired he created a trust – The Millard Trust – and donated his share of the firm to it. Drallim is still majority-owned by the Trust today. Dave Mooney, Drallim’s managing director, said: “Our attitude to business reflects our ownership in that we are essentially employee-centred; the Trust allows us to be a little bit more focused on our people than the average company.”

Drallim is financially self-sufficient – the trust is a beneficiary for the employees, providing bonuses and social events, as well as helping with any grievances that should arise.

Mooney has been with the company five-and-a-half years. He joined as technical director at a time of quite substantial change. Many of the aged board were retiring and one of Mooney’s first jobs was to iron out product development issues with the overall aim of reconfiguring Drallim’s portfolio and its focus. He took over as managing director 15 months later.

Teameffort

Drallim Industries

Drallim Industries is the east Sussex-based manufacturer of fluid controls, high voltage

test and monitoring equipment, cargo

aids and dry-air technology. Last

year, the company celebrated its half-centenary year by

taking home the Leadership and

Strategy prize at The Manufacturer Awards.

Mark Young spoke with MD Dave Mooney

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The premier supplier of quality pad printing machinery and consumables in UK and Ireland

Tampoprint UK LimitedOaklands Park, Wokingham, Berkshire RG41 2FDTel: +44 (0)1189123310 Fax: +44 (0) 870 770 5039email: [email protected] Web: www.tampoprint.co.uk

HYBRID 90-2integrated cliché production by laser

SIC 60 ENew Electro/Pneumaticmachine with a veryfavourable price

Laser Marking Systems

Electrical equipmentDrallim Industries

91

In 2004 the company moved to a purpose-built, 30,000 square foot premises and “that really heralded an era of new management,” said Mooney. “It was great opportunity for the company to re-birth itself. We broke down the old practices and manufacturing processes and gave everything a new lease of life.” The physical move was very much an analogy of the change in direction the company was taking.

“We had to do a complete a systematic review of our products,” said Mooney. “We were throwing a lot of our eggs into one particular basket that wasn’t really returning. It took a fresh look at our portfolio to realise that we needed to cut our losses in that respect.” After the review, the company identified four divisions that it could grow organically and decided to focus its efforts on those. Those four areas were telecommunications, remote monitoring and test, cargo aids and controls and automation.

Its product portfolio includes process and control valves; compressor desiccator units for telecom and industrial applications; partial stroke testing for process, oil and gas industries; pneumatic automation and remote equipment; condition monitoring; pneumatic interlock valves; compression and pipe fittings; panel systems; cargo hooks; fittings and load measurement for helicopters and lashings and restraints for military and special purposes.

Its box and panel building provisions include electro-mechanical assemblies; enclosures for all environmental conditions; hydraulic, electrical and pneumatic assemblies and mechatronic systems. In addition it provides further design and manufacture services including re-engineering projects; design for economical manufacture; prototype services and field and factory, service and repair.

Since 2007 Drallim has been fulfilling one of the biggest contracts in its history – the supply of pressure monitoring equipment for BT’s OpenReach copper cable network, which carries voice and broadband internet. The contract has involved the design and development of data collection equipment and transducers along with customised monitoring software, adapted to suit BT requirements. There has been a significant service element which includes data migration and helpdesk services. Mooney said: “This project really demonstrates our approach to partnership working. We were involved in over three years of discussions and development prior to contract award and have continued to react to new requirements as the project has proceeded. We try to listen closely to our customers’ requirements and deliver quality products and services in return.” From the refreshed energy afforded by the upgrade in HQ, Drallim’s Mission Statement was born. It includes three sections: ‘Values’; ‘Quality Policy’ and ‘Environmental Commitment’. Mooney describes the statement as “best business practice, in line with Drallim’s ethos, and general common sense” but extols the virtues of having it in writing as it provides documentation by which the company can hold itself to account and makes its policies official, as opposed to oft-repeated rhetoric. The

Our attitude to business reflects our ownership in that we are essentially employee-centred

“ “

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first section – ‘Values’ – outlines Drallim’s commitment to open communication, equality and the development of its people, while the second – ‘Quality Policy’ – lays out the company’s observation of ISO 9001:2000, its use of statistical quality checks, the maintenance of relationships with both customers and suppliers to ensure a smooth supply chain and the promotion of pride in performance to ensure first rate standards. In ‘Environmental Commitment’ the statement relates Drallim’s intentions to ‘where reasonably practicable, eliminate any adverse impact’, minimise its energy use, prevent pollution, comply with legislation and take steps to neutralise past activities that have had negative effects on the environment. It is summarised neatly as: “Innovative people; delivering quality niche products and services.”

Drallim has a turnover of around £4.6 million. The majority of its wares are sold domestically though around 30 per cent is exported. The cargo aids go mostly to satisfy military needs though the company is building upon supply to commercial ends too. The electrical test products go predominantly

We protect our customer base by continuing to supply them with what they want, to the quality they expect

“ “

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Electrical equipment

“I wouldn’t be the director of the company if I didn’t have a cracking set of people behind me,” continues Mooney. “We’ve moved away from that kind of ‘heads down, don’t shout’ mentality towards a more laid back environment where we allow people to take a few risks.” Calculated risk is necessary in business and while Drallim obviously doesn’t take all ideas on board, it has a culture which allows its people to get involved, express what they think and help shape strategy. “We find our staff are a lot more productive, mentally focused and generally happier this way,” said Mooney. “We like to treat people decently and charge customers reasonably and I genuinely believe this outlook wins us more business.”

to the National Grid, but have been sold as far afield as utility firms in Hong Kong. The control products are sold to oil and gas firms. At the time of writing, Drallim employs 56 staff. By the time of publication, this figure will be over 60. The company recently held a recruitment open evening which over 70 people attended.

Mooney modestly concedes that his company has been “fortunate” in its delivery to industries like utilities which haven’t been hit too hard by the credit crunch. But when you find yourself in opportune positions you have to capitalise on them. “We’ve had the infrastructure in place to allow us to take advantage of that,” he adds.

A lot of success hinges on identifying aims, ambitions and limitations. Drallim is a modern British engineering firm in terms of its capability with traditional British values in the way it conducts business. “We think we offer good honest value for money. We know we can’t compete with China and the Far East in terms of all sorts of high value things. So we don’t try. We protect our customer base by continuing to supply them with what they want, to the quality they expect, and we are concentrating our growth by acquiring businesses that can improve our product portfolio and not necessarily simply extending it. We look for organic growth first, then horizontal integration.”

Overall, it is Drallim’s agility that has been the secret to its success and its people that have been the enabler of its growth, says Mooney. “We are very contract driven and we chase opportunities. But we do our job well because we have built up a team of people that want to succeed.”

The company grew by 30 per cent in 2007 and 10 per cent the year before. “We’ll have grown at least 10 per cent in 2008,” assures Mooney. “And we’re taking on people,” he adds. “We’re watching our backs but I think it’s safe to say we’ve found some relatively comfortable shoes in which to outrun this recession.

Drallim Industries

We like to treat people decently and charge

customers reasonably and I genuinely believe this outlook

wins us more business

“ “

When Drallim scooped the Leadership and Strategy Award at the Manufacturer Awards back in October, Mooney said:

“The accolade was a great reward for the company’s

hard work and we were delighted to win. Everyone has

contributed to this and now, [with the country] going

into recession, we actually see ourselves growing,”

he said. “We really believe in British engineering and

manufacturing and want to see it back to full strength

here in the UK. It’s down to everyone being part of the

same successful culture and this award proves we’ve

done that already. This is a just reward for all the hard

work by everyone in the company.”

Westbridge Furniture Designs was started by the directors of Deeside Furniture who left the firm to set up a new upholstered furniture company as a subsidiary of the Belfield Group. The company now consists of three sites across Wales: one in the south of the country and two in the north. Offering over 13,000 different stock keeping units (SKUs), Westbridge produces both leather furniture and soft fabric products. “We design our own products for leading UK retailers,” said Bratt. The company rests “in a high price positioning bracket”, as high-end retailers flock to benefit from its expertise.

When Bratt started at Westbridge in August, he soon realised that even though the company was attracting some of the biggest names in the home furnishings market, workers were not becoming complacent. “From my experience of being in different companies, in a variety of industries, one thing about this business is that literally the only thing that is consistent is the change. Every day [Westbridge] is looking at new methods of working, new ways to save costs or operate differently; embracing all different aspects of process and manufacturing, and always trying to make things in a better way to satisfy the customer’s needs.”

Westbridge Furniture Designs was established in 2004. Since then it has thrived on its own terms, boasting a high-end portfolio which includes Next, John Lewis, House of Fraser and Marks & Spencer. Operations manager Mike Bratt explained to Fiona Dempsey how Westbridge owes its success to its constant innovation and evolution, as well as the strong values held by the team

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future the Furnishing

FurnitureWestbridge Furniture Designs

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Bratt welcomed this culture of change and brought his varied experience to the day-to-day running of the two north Wales factories. Working closely with the factory managers, he developed a new mission statement for the business. The mission was not only for employees to strive for the business itself, but also to aim to help sustain UK manufacturing as a whole. The definitive strategy was based on 10 core values that every worker could cultivate, whatever their skill or background.

“I wrote the business mission statement. We then created the values and the vision,” explained Bratt. “The values we are looking at, for example, Passionate Purpose, have a little saying under each, in order to aid the employees’ understanding of what is meant. We’ve also incorporated leadership, accountability, honesty,

teamwork, innovation, quality, customer focus, environment and communication. We believe in the business that if we get these 10 correct it will help us and ensure that we will succeed.”

Lean methodology is fundamental to Westbridge’s manufacturing processes. The factory operates on a just-in-time basis, so there is no completed stock taking up valuable warehouse space and collecting dust. Products are dispatched to warehouses within two days of an order being commenced in the manufacturing area. Bratt commented on the impressive stock turnaround: “We use an external haulier to [move stock] to storage warehouses which are supported by the customer. Within two weeks they’re actually delivered so it’s really quite lean. It’s like when you order a car, it goes through with the customer’s name on. So does our product.

“There is full traceability through our process for the person who orders the product. All of our products are made to order so once it’s transferred from the raw material it comes through the factory and is out the door in the quickest process possible.”

The company’s efficiency is one of the features which has made it so successful, and Westbridge cannot sustain this without a reliable supply chain. Bratt praised the 80 suppliers that enable Westbridge to run such a tight ship: “We operate an effective and efficient just-in-time system with them as well. We’re a site that is under extreme pressure – especially with the current economic climate – to hold as little stock as possible, and make sure that stock turnaround is as quick as possible.

Bratt’s 10 core values lie at the heart of Westbridge’s CI strategy. “Our continuous improvement at the moment is based around people and leadership development and trying to change how people think. We’ve done some out-of-the-box thinking workshops, brainstorming exercises, group work and team building and development. I’m very much trying to focus on leadership and also to lean down, remove the waste, weekly stock counting and similar projects that improve our visibility and knowledge.

“We’re starting to look at the key performance indicators (KPIs) more, in order to work out which KPIs add value and which don’t. We’re looking at the key monitors: the safety, quality, cost, delivery, people and the environment.”

So it comes as no surprise that Westbridge is primarily investing in its workers. The company has refrained from spending substantial sums of money on new equipment, particularly in the current economic downturn. Bratt sees investment in people as the best way for the firm to progress in difficult times.

Every day [Westbridge] is looking at new methods of working, new ways to save costs or operate differently; embracing all different aspects of process and manufacturing, and always trying to make things in a better way to satisfy the customer’s needs

“

“

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“We’ve employed a substantial number of staff at the front end of the business. We’ve got a design and development team that consists of 35 skilled people who are really focusing on providing the customer their own unique product. The investment is more people-orientated rather than actual equipment, because it’s quite a labour-intensive process rather than an automated one.”

With little automation at the factory, Westbridge is already on the right track to being an environmentally friendly company. But the company is committed to pursuing more ecological manufacturing practices. “We have certain key targets like waste to landfill, solar panels in the roof, natural light funnels and special taps that add 80 per cent air into the water so you actually feel like you’re using more water for washing your hands. A lot of items onsite are on timers and sensors enabling them to go off when people are offsite, or when they are not being utilised.”

The firm even has its own recycling facility onsite which is operated by an external contractor called Storm. All the material that arrives at Storm is checked before the appropriate waste is taken to the relevant area for recycling or disposal.

In fact, Westbridge shares its concern for the environment with its biggest customer. Marks & Spencer (M&S) accounts for 80 per cent of its business.

FurnitureWestbridge Furniture Designs

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“We’re very very fortunate because we have such a good partnership with M&S. We’re actually one of only two M&S accredited Plan A sites of their manufacturing suppliers.” M&S has in fact labelled Westbridge’s Holywell site as an ‘eco-factory’, which has already reduced its CO2 emissions by 48 per cent, as well as cutting electrical energy use by 56 per cent. The Plan A mandate also states that Westbridge furniture will be carbon neutral by 2012. With M&S part-funding the company’s environmental improvements, Plan A will hopefully lead to it being sustainable for years to come.

Bratt’s main aim for the future is to keep expanding the business, while enforcing its mission statement by restoring “faith and reliability in the manufacturing markets in the UK.”

“We’re trying to invest heavily in the UK market and avoid the China gold rush. So rather than saying ‘what can we do, can we go and set up a head office in China or India?’ you

could probably say our mission is to primarily invest in UK-based manufacturing, to establish the business as supplier of choice to the customer through innovation, service and superior quality.

By continuing people-orientated development and constantly innovating and leaning processes, Bratt is sure that in the future the firm will be able to maintain “such a good partnership with our customers that anyone else finds it difficult to try and enter into our market and offer the complete service and package that we do.”

Our continuous improvement at the moment is based around people and leadership development and trying to change how people think

“ “

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AppointmentsBusiness Change AgentOur client is a leading global FMCG food manufacturer.

Midlands ◆ £35-40,000 + Benefits

For more information or to apply for this role please contact Jamie Stevenson on [email protected] or 0121 230 9380 quoting Job Ref: MPTU13016891

Specialists in Manufacturing Recruitment166 offices in 28 countries | www.michaelpage.co.uk

As Lean Agent you will drive for best practice through lean and time study processes. The main purpose of this role will be to analyse and develop manufacturing processes with the objective of maximising productivity through the effective use of the available resources, while maintaining a safe hygienic work environment.

Who we’re looking for:

You will be educated to degree level (or equivalent) in a related field

Six Sigma (ideally black belt), 5S, Kanban, J.I.T and OEE

Be experienced with a demonstrable track record in a blue-chip food/drink or pharmaceutical business

Have extensive experience of work measurement, method study, lean manufacturing and change management (Ideally gained in the FMCG sector)

Project management experience of working in cross-functional teams to implement improvement projects

Proven ability to achieve long-term objectives

Experience in Push/Pull production systems

Technical ManagerA Technical Manager is required to work for a leading manufacturer in the FMCG sector based in Worcestershire. The role will report into the General Manager and will manage a department of Technologists and Quality Technicians. Our client is a new and growing supplier of fresh produce committed to providing the best for their customers.

Worcestershire ◆ £38,000 + Benefits

If you are interested in this position please send your CV to [email protected] or call Daniel Rochfort on 0121 230 9382 quoting Job Ref: MPTU13027482

Specialists in Engineering Recruitment166 offices in 28 countries | www.michaelpage.co.uk

Manage the internal team in terms of KPI’s, compliance and provide technical leadership

Lead the customer support for the worldwide business

Be the lead technical contact for the supplier function including pesticide compliance and quality improvements both in the UK and overseas

To keep the company at the forefront of their market

High level customer and sales team contact with requirement for plant commission and new product introduction

Customer and team training

Establishing product quality standards for distribution

To fully understand, promote and maintain the company’s corporate culture, philosophies and policies

Specialist areas of experience preferred:

Food manufacturing background

Recipe/formulation and raw material knowledge

Foundation certificate in food hygiene

Good communicator

PC literate

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www.themanufacturer.com/uk/jobs

Mechanical/Electrical Availability Engineer

Tarmac is a leading supplier of materials, products and services used by the construction industry. We are looking for an Availability Engineer to supervise a team of multi-skilled tradesmen within one of our Aircrete manufacturing plants based in Linford, Essex.

Essex ◆ £40-45,000 + Excellent Benefits

For more information or to apply for this role please send an up-to-date CV to Paul Coles at [email protected] or call on 020 7269 2203 quoting Job Ref: MPTU13008352


Reporting to the Engineering Manager, the Availability Engineer’s primary responsibility is to ensure that the plant and all equipment is maintained using current best practise in order to ensure site manufacturing targets are met in a cost effective and safe manner.

You will be responsible for:

◆ Managing a team of ten shift tradesmen, ensuring all professional standards are maintained in line with both legal and corporate expectations

◆ Ensuring the CMMS is fully utilised and all maintenance tasks are undertaken in accordance with company safety policy and completed in a timely, cost effective and professional manner

◆ Being the primary point of contact for the site for any issue falling within the scope of maintenance and operation of the plant

◆ Attending the site to supervise engineering staff and contractors

as and when required during scheduled maintenance periods on an equal rota basis with your peers

Who we’re looking for:

Mechanical

◆ Working knowledge of boilers/autoclaves and steam systems

◆ In-depth knowledge of all aspects of pneumatic and hydraulic systems

◆ Bulk materials handling, storage and processing (Milling / Pumping)

Electrical

◆ Good working knowledge of PLC’s (Siemens S5/7)

◆ Working knowledge of robotics and associated controls

◆ An understanding of SCADA and HMI systems

Technical Design ManagerOur client is a market leading one stop shop for retail design, fit-out, fixtures, displays, installations, merchandising and supply chain services. With a substantial manufacturing operation for point of sale (POS) and retail fixtures and fittings they are now looking to add capability to their management team, specifically relating to design for manufacture.

Essex ◆ £50-60,000 + Benefits

For more information or to apply for this role please send an up-to-date CV to Paul Coles at [email protected] or call on 020 7269 2203 quoting Job Ref: MPTU12993395


Reporting to the General Manager and Group Design Director you will lead and manage technical and creative design, as well as the R&D workshop supervisor and European Design Office Manager. You will need:

◆ The ability to match resources to expansion plans

◆ Strong leadership skills. Be able to motivate and control a multi-disciplined team of designers, engineers and technicians

◆ To develop Eastern European Engineering to a high level and support

◆ To develop the Harlow technical team to take ownership of lead projects

◆ To set and manage design budget in line with sales budgets

◆ To ensure products are designed using value engineering principles and meet health & safety and customer requirements i.e. fit for purpose

◆ To develop the best technical excellence team in the industry

◆ To be responsive and have a proactive attitude to customer needs

◆ To have strategic vision for future developments

◆ A good approach to challenging industry requirements

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www.themanufacturer.com/uk/jobs

Training If you are interested in providing the manufacturing community with details of your training courses, workshops, seminars etc then please see contact details below. The training can be for any discipline from health & safety to six sigma or from sales masterclasses to lean workshops across the board.

…you could source all the corrugated packaging you need from just one supplier with a network of plants across the length and breadth of Britain?

A supplier with over 70 design awards to its credit in the last few years alone.

Dedicated to creating packaging which takes cost out of the supply chain whilst boosting sales and profi ts and reducing carbon footprints.

Using a unique set of tools called PackRight to analyse every single aspect of a packaging opportunity.

With a world-class Impact and Innovation Centre where you can explore options in

a simulated retail and supply chain environment. Well, you can.

Call us now on 0845 260 70 80 or send an email to [email protected]

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Imagine if…

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Source of Supply

www.themanufacturer.com December/January 2009 Vol 11 Issue 12

Leadership & strategyFalling exchange rates

Design and innovationIP in China


AppointmentsThe sector’s top jobs

InterviewIain GrayCEO, Technology Strategy Board

New era.New rules.When you discover Epicor 9 you’ll forget everything you thought you knew about business software. It changes the rules of the game, for the new era of business without barriers – so you can work when you want, where you want, as you want.

Designed from the ground up, Epicor 9 will help you break down the barriers inside and outsideyour business.

Copyright © 2008 Epicor. All rights reserved. Epicor and the Epicor Logo are registered trademarks of Epicor. All product information is subject to change without notice.

Visit: www.newera-newrules.comCall: 0800 3161155Email: [email protected]

See if you’re ready for business without barrierswith our free interactive survival guide.

Business without Barriers

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SaferobotsasCould automation answer your health and safety needs?

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