the manufacturer march issue 2012
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The March issue of The Manufacturer looks at the power of manufacturing entrepreneurs and the issue of National Insurance contributions.TRANSCRIPT
www.themanufacturer.com | March 2012 | Vol 15 Issue 3
In partnership with:
Unlocking the potential of manufacturing entrepreneurs
Manufacturing leadership Quid pro quota – Attrition of female talent in manufacturing
Workforce and skills Female of the species – Four female prodigies forging careers in industry
Business of manufacturing A taxing question – Are employer National Insurance contributions inhibiting growth?
Manufacturing technologies Perfectly formed – Investigating Superplastic Forming
Operations and maintenance Safety first, middle and last – British Gypsum’s millionaire’s club for zero lost time accidents
InterviewMike NorfieldCEO, Team Telecom Group
Factory of the monthTSC Foods
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anufacturer.com M
arch 2012 Vol 15 Issue 3
Editor’scomment
Boldness neededOne year on from Chancellor Osborne’s dramatic pronouncement that he was seeking a ‘March of the Makers’, one can’t help but feel a little disappointed with the persistently challenging environment for manufacturing in the UK.
Granted, this cannot be solely laid at government’s door. Global economic issues are at play – but the required boldness and clarity of purpose in supporting an industry-led economic recovery are still lacking, as EEF’s Terry Scuoler is not chary in pointing out (p09).
In this issue of TM, ahead of the 2012 Budget at the end of March, a number of areas where industry figures would like to see more forthright action are put in the spotlight. EEF is calling for the temporary introduction of 100% capital allowances across the UK. And the actions manufacturers will need to take to comply with the early introduction of a revised late payments directive are laid out on p31.
On p36 the potential benefits to be gained from reductions or exemptions for employer National Insurance contributions are discussed. With national unemployment now at 2.6 million, the suggestion that action on this issue might stimulate job creation should not be disregarded out of hand.
But although there will always be calls for government to do more and complaints that existing policies are floundering (like those criticisms levelled at the Enterprise Zones on p30 and p100) the last month has provided plenty of evidence to show that UK manufacturing still has plenty of fight.
Index of production figures released in December 2011 were robust, with manufacturing in particular displaying a 1% rise on performance in November. There was also a significant shrinkage of the UK’s staggering trade deficit which dropped from £2.8 billion in November 2011 to £1.1bn in December – the smallest monthly deficit to be recorded since April 2003.
The challenge now is to ensure these positive results are not shown up as a flash in the pan. While there is a role for government in ensuring consistency of policy and support for growth through bodies like the Manufacturing Advisory Service (p46), it behoves companies to exhibit confidence and proactively look for ways to expand. This may mean seeking new markets or non-organic growth strategies as discussed in our lead story on p16.
Jane Gray, Editor
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Contents
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04 News and regular columnsA whistle stop tour of manufacturing news and events in the last month along with commentary on industrial research, legal issues and economic challenges for manufacturers
11The Naked Engineer Our anonymous industry commentator fights back against the threat of quotas for female representation in boardrooms
14 Lead The power of many: investigates the unleveraged potential of entrepreneurial activity in the UKs manufacturing sector
22 InterviewImagine no boundaries: Jane Gray speaks to Mike Norfield, CEO of Team Telecom Group about his varied career path and the direction in which UK manufacturing is travelling
Pillar features
27 Manufacturing leadership Quid pro quota: Will the heavy hand of quotas become inevitable if UK corporates don’t start addressing high junior management attrition rates for female talent? Jane Gray considers gender imbalance in the UK’s manufacturing boardrooms
36 Business of manufacturingA taxing question: How heavy is the burden of employer National Insurance contributions and is this requirement from government impeding manufacturing growth and job creation in industry? finds out
48 Workforce and skillsThe female of the species: Showcasing four bright young women making their mark in manufacturing and setting themselves up for remarkable industry careers
51 Employee of the monthThe female of the species: Showcasing four bright young women making their mark in manufacturing and setting themselves up for remarkable industry careers
52 Operations and maintenanceSaftey first, middle and last: British Gypsum celebrates as its final two UK sites join its millionaire’s club for achieving one million hours of zero lost time accidents. Tom Moore finds out how they did it
54 Manufacturing technologiesPerfectly formed: Malcolm Wheatley investigates the process of Superplastic Forming and talks to Group Rhodes - one of just three companies in the world able to make the kit that does it
60 IT in manufacturingAn enterprising offering: Enterprise solutions provider, Oracle responds to ’s coverage of Product Lifecycle Management in its February issue
62 To one-stop-shop or not?: Malcolm Wheatley explores the pros and cons of integrated ERP systems versus niche, best of breed IT solutions
70 IT news
58 Special featureSavings from thin air: Chris Dee, executive director at the British Compressed Air Society, highlights an oft-overlooked opportunity for energy savings in manufacturing facilities
ManufacturinginactionEach month conducts interviews and case studies with companies from the whole gamut of UK manufacturing from large multinationals to niche SMEs across sectors. This month visits:
96 TSC Foods
100 The last wordEditorial director Will Stirling discovers how HM Treasury needs to accelerate the definition of state aid in Enterprise Zones for companies to gain benefit from Enhanced Capital Allowances
The Manufacturer in partnership with EEF, the manufacturers’ organisation. Working together to secure the future of manufacturing.
The Manufacturer is working collaboratively to drive innovation and manufacturing excellence in the UK. Our partnerships with leading industrial research centres, further education providers and trade bodies is an important part of this and TM is pleased distribute directly to the alumni and membership of the following organisations:Cranfield UniversityEEFInstitute for Manufacturing, Cambridge University
EEF is dedicated to the future of manufacturing. Everything we do is designed to help modern manufacturing businesses evolve, innovate and compete in a fast-changing world. www.eef.org.uk
Henry Anson, Sales DirectorHenry is a shareholder in SayOne Media and responsible for the company’s commercial activities developing new concepts and products for The Manufacturer’s readership. Henry is keen to build a bridge between the manufacturing community and sector which supports them.
Will Stirling, Editorial DirectorWill edited TM for two and a half years and now is working to expand the SayOne Media publishing portfolio. He is responsible for the launch of new reports and special supplements for The Manufacturer and for the maintenance of editorial standards across SayOne Media publications. Before joining SayOne Media Will worked for Euromoney and IPC Media.
The team
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Nick Hussey, Managing DirectorNick has 20 years of experience in the publishing industry spanning titles in the UK, US, Asia and Australia. In addition to his commercial enterprise experience Nick has also worked in government, spending a year as Managing Director of Manufacturing Insight, a programme aimed at changing the image of Manufacturing. He holds several non-executive directorships and is a founder member of the IET’s Manufacturing Policy Panel.
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EditorialIT EditorMalcolm [email protected]
Associate EditorRoberto Priolo [email protected]
Editorial Assistants George Archer [email protected] [email protected] DesignArt DirectorMartin [email protected]
DesignersAlex ColeVicky [email protected]
Sales and EventsHead of EventsJon [email protected]
Marketing ExecutiveGrace [email protected]
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ISSN 1477-3201BPA audit applied for June 2009.Copyright © SayOne Media 2011.
The Manufacturer is independently audited by:
Tim Brown, Web EditorTim joined SayOne Media in 2009 after working as a journalist for six years in Australia on a range of lifestyle and business magazine publications. His primary areas of interest include the automotive industry and business development.
Jane Gray, EditorJane joined SayOne Media in 2009 for the launch of the Lean Management Journal, sister publication to TM. Reporting concurrently for The Manufacturer, Jane focused on industry skills development features and lean enterprise until she became editor in June 2011.
Birmingham-based precision pressings and stamping specialist Brandauer announced £3.5m worth of new contracts in 2012 as the company also celebrates its 150th birthday. The family-owned company, employing 50 people, will begin production on a range of new complex components destined for the international automotive, security detection and renewables markets. Brandaur is investing nearly £1m in new plant and equipment to deliver for new and existing demand.
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D e F e N C e
BAE Systems Submarines in Barrow will create an additional 280 jobs this year, adding to its already 5,000-strong workforce. The workforce expansion will go ahead despite disappointing sales in 2011. Last year’s sales fell by 14% on 2010, a result which has been put down, in part to government spending cuts, but also to delays on major programmes.
A u T o M o T I v e
January production figures show car manufacturing in the UK hit a 16 month high at the start of 2012. Overall, the number of cars produced in the UK rose by 15.6% in January, to 127,382. Commercial vehicle output fell modestly by 1.2% for the month but engine production was up 5%. “UK car production continues to drive manufacturing growth and a rebalancing of the economy,” said Paul Everitt, chief executive of SMMT.
N u C L e A r
Prime Minister David Cameron and French President, Nicolas Sarkozy, have signed an agreement to cooperate on the advancement of civil nuclear new build. Anglo-French partners will work alongside the International Atomic Energy Agency to collaborate on education and training methods, R&D and security. This deal aims to promote commercial opportunities estimated to be worth £500m with the potential to create 1,500 jobs.
Electronic goods manufacturer, Elonex, has home-shored some of its operations from China to Coventry as the company prepares to take advantage of new build nuclear business in the UK. The relocation will create 400 jobs in the UK. Encouraging others to consider home-shoring for specialist manufacturing opportunities Nick Smith, Elonex CEO, said that his UK labour costs [compared to those in China] are negligible when freight, reverse logistics and import duty are factored in.
I N v e S T M e N T
Cereal manufacturer Weetabix, which is this year celebrating its 80th birthday, announced £20m worth of investment in upgrading its UK and US factories. Weetabix said the money will be used to upgrade the factory at Burton Latimer, its Northamptonshire headquarters, as well as sites in Corby and Ashton-under-Lyne. Its Toronto and Boston sites in North America will also benefit from investment.
D e F e N C e
Eight Scottish manufacturers have won Bronze accreditation for the defence industry supply chain standard SC21. The awards were given in recognition of outstanding quality and customer satisfaction levels and were announced in a ceremony at the Scottish of headquarters defence electronics firm SELEX Galileo, Edinburgh, in February. The eight newly accredited companies are: Martin Aerospace, Lanark; Axon Cable, Dunfermline; RD Taylor, Glasgow; Fasteq, Linlithgow; ZOT, Musselburgh; Plexus, Kelso; Ireland Alloys, Blantyre and Castle Precision Engineering, Glasgow
A N N I v e r S A r I e S A N D I N v e S T M e N T
Manufacturing News
Rowan Crozier, sales and marketing director at Brandauer
F o o D A N D D r I N k
Reigning champions of the Fresh Connection competition, Mars, have returned to the contest in 2012. The Fresh Connection, organised by consultancy and technology company, Scala, tests supply chain management skills. In 2011 Mars took the top prize in the competition from previous winner, Cadbury. The competition is partnered by the Chartered Institute of Logistics and Transport. The 2012 grand final will be held over two days from March 25-27.
S u S T A I N A B I L I T y
Narec has stated work on world’s largest turbine testing plant in Northumberland. Building facility will cost the renewable energy technology firm £35m but will provide a controlled environment to test the next generation of offshore turbines in accordance with international standards. When fully commissioned in summer 2013, the 15MW facility will be the most advanced of its type in the world.
Manufacturer’s organisation, EEF has called on government to bid to host the UN Climate Technology Centre. The oraganisation said the plea came from its industry members, concerned that the UK will miss out on a chance to lead the low carbon revolution. Other international industrial power’s including Brazil, Germany and the USA have already expressed intentions to bid for the centre to be located within their borders. The closing date for bids is March 13.
Manufacturing News
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e D u C A T I o N A N D T r A I N I N G
The sector skills council for manufacturing, Semta has launched a new advanced apprenticeship framework targeting the development of lean skills. The Operations and Quality Improvement Advanced Apprenticeship Framework will focus on methods for sustainable quality and delivery improvements for products, processes and services. The framework is designed with SME businesses in mind.
S u S T A I N A B I L I T y
A pioneering project to create a plastics polymer from renewable resources has been unveiled alongside plans announced to build the UK’s first bio-polymer demonstration facility. The facility will be located at Wilton International on Teesside and chemicals company Plaxica will be among the first to utilise it for exploring how platform chemicals from renewable resources, such as sugarcane, cereals and cellulose, can be used to produce second generation high performance polylactic acid (PLA) based materials. Existing polymers, such as PET - commonly used in beverage bottling, are derived from diminishing petrochemical resources.
D e F e N C e
Work has begun on ‘Block 2’ of the second new aircraft carrier, HMS Prince of Wales. Commander-in-Chief Fleet Admiral George Zambellas cut the first steel in a ceremony at BAE Systems’ Portsmouth production facility in February. The section under construction, weighing around 6,000 tonnes upon completion, will house the ship’s machinery spaces, stores and switchboards, as well as some of the accommodation. Other organisations working on the project include Babcock, Thales and the MoD.
A ceremony was held at BAE’s Postsmouth facility to mark the start of build operations for the new HMS Prince of Wales aircraft carrier
F o o D A N D D r I N k
Heineken, the third largest brewer in the UK, has been forced to make close to £500m in cuts to cope with rising input costs. The brewer already cut spending by around £510m over the past three years as the price of malted barley increased. A further 6% rise in materials costs is predicted in 2012. The recently announced cuts may endanger British jobs but the company has expressed a commitment to maintain European production.
Heineken has announced cost cutting measures to cope with rising materials costs
F o o D A N D D r I N k
Fresh Del Monte announced plans to close a facility in York following a decision by supermarket retail chain Morrisons to withdraw a contract worth around £16m. The Morrisons contract represented more than three-quarters of the work conducted at the site which employs 140 permanent staff. Sam Vickers of the Bakers, Food and Allied Workers Union commented, “This again shows the power the supermarkets. We’ve got a situation where people are being made redundant so Morrisons can make another couple of pence on the food that they sell.”
The London Bread & Cake Company is looking to increase headcount by 40% ahead of an anticipated surge in work for the London 2012 Olympic Games. The independent wholesale bakery in Edmonton, based just two miles from the Olympics venue, is looking for bakery professionals to join its current 94-employee workforce for a two-month period. The bakery firm expects to see a 20% increase in business as a result of the Olympic Games.
8
Manufacturing
but just 10% in manufacturing Apprenticeship starts rise to 450,000
I n February, in the middle of National Apprenticeship Week, Prime Minister David Cameron blogged in the Huffington Post
that more than 450,000 people started an apprenticeship in 2011 (as recorded by the National Apprenticeship Service). He said this was “roughly the same number as those who started in higher education. The increase on the previous year is a whopping 63%. These are record numbers to reflect a
real commitment.”Sector skills council Semta confirmed that about 5% of the national apprenticeship starts in 2010 were in the manufacturing and engineering sector. For 2011, Semta confirmed that this number of starts had increased to 48,870, the proportion rising to about 10% of the total. A laudable rise, and in line with the proportion of manufacturing in the economy, but is it enough? asked three stakeholders:
Marcus Tiefenbrun, chairman Castle Precision engineering, Glasgow
“T he UK’s ability to take or maintain its market share [in HVM and
engineering] depends on having a highly skilled workforce available to meet growth and drive innovation. Within our sectors, demand for engineers still outstrips supply.
Contract winning Tier One companies with immediate and significant growth requirements are forced either to denude their supply chain of their skilled people or poach from similar Tier Ones. Neither of these situations is ideal and hampers industries’ overall ability to deliver and grow in a sustainable manner. Given the severe shortage of engineers it is hard to put an exact number on the requirement but 100,000 engineering and manufacturing apprenticeships per year would appear to be the minimum that is required.”
Philip Whiteman, Ceo of Semta
“S emta sectors need to recruit and train 82,000 engineers, scientists and technologists by 2016 and to upskill 363,000 of the technical workforce to
achieve world class standards. Hiring apprentices is an excellent way to either train new staff or to improve technical skills especially as funding is available to support apprenticeship training. Unfortunately only 17 percent of
engineering and manufacturing companies have apprentices or offer apprenticeships. While the numbers are going in the right direction, not enough employers are hiring
and getting the benefits of apprentices. So Semta has secured UK Commission for Employment and Skills investment to increase the percentage of SMEs who recruit an apprentice from an 11% baseline, to 20 percent by 2016.
We have also launched the Semta Apprenticeship Service where - at no cost - we can manage the whole process; from advertising a role, assessing specific training needs, and filtering high calibre applicants to securing funding, working with a recognised training provider and ensuring the quality of the programme.”
Mike Norfield, Ceo of Team Telecom Group, a manufacturer of telecommunications products in Derby
“A pprenticeships are the lifeblood of future British industry, and the fact that there has been an increase in apprenticeships in engineering and manufacturing from last
year is very positive. But we feel that this percentage should be greater given the high percentage of UK exports derived from engineering and manufacturing.
We [TTG] launched our own programme after identifying a long-term skill issue in the engineering sector – engineers are getting older, and there wasn’t the new talent coming through to replace them. The UK may be at the forefront of technology, but how do we continue to develop this if we don’t have the next generation of engineers with the skills to innovate and deliver?
We would like to see a higher percentage of apprenticeships in key areas such as technology and manufacturing as we believe apprenticeships are vital to assisting with the UK’s economic growth and securing the UK’s position at the forefront of technology.”
Contract winning Tier 1 companies with immediate and
significant growth requirements are forced either to denude their supply
chain of their skilled people or poach from similar Tier Ones
Marcus Tiefenbrun, Castle Precision Engineering
For all of the latest news in the manufacturing world visit www.themanufacturer.com 9
News March
6 EEF hosts its annual National Manufacturing Conference in conjunction with The Manufacturer. To book contact Benn Walsh: [email protected] on 0207 202 7485
7 The Manufacturing Summit takes place at the offices of the Institution of Mechanical Engineers in London. Keynote speakers at the event include Dr Mike Short FREng BA, president
of the Institution of Engineering and Technology; Mark Prisk MP, Minister for Business and Enterprise; Simon Griffiths, area director North and West England for the Manufacturing Advisory Service and Richard Green, CEO of Ubisense. Visit www.ukmanufacturingsummit.co.uk/book-now.cfm to book.
8 Semta hosts an event in Westminster on March 8 to celebrate International Womens’ Day. The event will showcase female role models from industry and Baroness Margaret Prosser,
OBE, Labour Life Peer, and deputy chair of the Equality and Human Rights Commission will be a guest of honour. For further details call 0845 643 9001 or email [email protected]
15-17 The Big Bang Fair takes place at the Birmingham NEC. Now in its fourth year, this free to attend event is targeted at school children and promotes
manufacturing and engineering careers. See p50 for more details.
20 Develop3D Live takes place at Warwick University. This event for design engineers will showcase the latest CAD, CAM and PLM software for design engineers and other users of
product data across industries. Register at www.develop3dlive.com
21-22 Global Manufacturing Festival: Sheffield takes place. See p56 for more information.
29-30 The Lean Management Journal hosts a two-day Lean Safety Seminar and Benchmarking Visit at consumer packaging manufacturer Rexam’s plant in
Wakefield. The event will focus on how lean tools and techniques can drive safety improvement and provides a comprehensive insight into the skills and methodologies used by lean safety expert Robert Hafey. For more information and to book contact Benn Walsh: [email protected] on 0207 202 7485
April
16-20 The latest in manufacturing technologies will be on show at MACH 2012 at the NEC in Birmingham in April. To register your interest in exhibiting at
the exhibition, or to discuss sponsorship opportunities, please contact Graham Dewhurst at the Manufacturing Technologies Association via email, [email protected] or phone 020 7298 6400
17-19 Co-located with MACH, DFA Media hosts four engineering exhibitions with accompanying seminar programmes for targeted manufacturing and engineering
professionals. Drives & Controls 2012, IFPEX and Air-Tec 2012 will all return to the Birmingham NEC in April. A new show, Plant & Asset Management, will also make its debut. See p72 for more details.
June
12 Now in its fourth year, the SMMT International Automotive Summit will attract up to 250 delegates from the breadth of the automotive industry. Confirmed speakers for 2012
include director of purchasing at Jaguar Land Rover Ian Harnett and vice-president of vehicle design and development at Nissan Technical Centre Europe, Jerry Hardcastle. For information on tickets or sponsorship and exhibition opportunities contact SMMT on 0808 178 8818 or e-mail [email protected]
Datesforyourdiary
Government has made a
decision that from 2014 all qualifications taken by pre-16 students, regardless of size, will have a value of one from
the point of view of measuring performance, i.e. the school
league tables.
In addition, they have declassified 3,175 vocational
qualifications for pre-16 students from 2014. However,
the engineering diploma at level 2 (GCSE) is one of the
five non-GCSE qualifications which will count in the league tables from 2014 with a value of one – down from a current
value of five.
This is something of a technicality however.
The Engineering Diploma is worth the value employers place on it and the Royal Academy of Engineering,
and major employers consider it to be the qualification of choice for pre-16 students wishing to pursue a career
in engineering.
S k I L L S
Following the downgrading of engineering diploma qualifications in late January, Jim Wade, principal of the JCB Academy, a university technical college, sent the following comment to :
A u T o M o T I v e
Triumph Motorcycles, Britain’s largest motorcycle manufacturer, has invested in new technology to support the development of its iconic designs. The decision to invest in product lifecycle management software from PTC, Windchill, was taken to support the speed at which Triumph can develop a targeted four new models every year and shortly after the company increased production to a record level of 50,000 bikes a year.
ManufacturingAppointments
To notify The Manufacturer of your company’s appointments, please contact Roberto Priolo at [email protected] and 0207 401 6033
Mike Wallis has joined JJ Churchill as finance director. Wallis previously worked at PCC Group, and has many years’ experience as a finance director with a large aerospace manufacturing group. The company is confident he has the ideal skills set to help the board of directors deliver its aggressive long-term growth plan.
Ian Ritchie, managing director of MRO products and services distributor Brammer, now also leads lead the recently acquired industrial tools, maintenance and health and safety product distributor Buck & Hickman. Ritchie will build on the significant growth and development he has overseen at Brammer since his appointment as MD in December 2003.
The board of directors of Sealine International appointed William C. Griffiths as managing director. Sealine’s chairman Rex Schlaybaugh said: “Bill brings with him over 35 years of operations management experience in manufacturing on a global basis and we are very excited about him becoming part of our team.” Sealine International was acquired by the Oxford Investmest Group in September last year, and will work as the company’s platform to acquire other boat and marine manufacturing assets.
Social entrepreneur and jeweller, Jason Holt, will head-up an employer-led review of UK apprenticeship provision for SMEs. Holt will talk to stakeholders about barriers to raise apprenticeship provision rates, including improving the marketing of apprenticeships
to SMEs and how to cut red tape to around the process of taking on and training apprentices. As well as running a jewellery business in Hatton Garden, London, Holt also runs Holts Academy of Jewellery, a not-for-profit training academy.
Smurfit Kappa, one of Europe’s largest recyclers of paper and card, appointed Matthew Berrill as operations director of its recycling division in the UK. Berrill will oversee the company’s paper and board
recycling collection operations across UK recycling depots. He joined the company over 20 years ago, and was appointed operations director of Smurfit Corrugated, Smurfit Kappa Group’s manufacturing concern, in 1999.
Caterham Motorsport appointed 20-year-old karting ace, Laura Tillet, to assist with development of the new karting championship it will launch in 2013. Tillet was the first British female to compete in
the KF1 World Championship, the karting equivalent of Formula One. Her family business, Tillet Racing Seats, supplies race seats, rib protection and karting accessories.
ASCE 2 (Aerospace Supply Chain Excellence), a £11.4m programme developed by the North West Aerospace Alliance to deliver over £100m additional GVA from the North West economy and almost 400 new jobs, has appointed Carole Stewart as skills coordinator and Kristian Samways as innovation coordinator.
UK Appointments
International Appointments
Jason Holt
Matthew Berrill Smurfit Kappa
Laura TilletCaterham Motorsport
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CA Technologies appointed Jacqueline de Rojas as vice president and general manager, UK and Ireland. She is responsible for accelerating business growth and building on CA Technologies’
reputation in the IT management solutions market. CA technologies has worked with manufacturers across sectors including projects with AzkoNobel and BMW.
Jacqueline de RojasCA Technologies
Sony Corporation appointed Kazuo Hirai as its new chief executive. His appointment ends the reign of Howard Stringer, Sony’s first non-Japanese CEO, who held the position for seven years.
Jean-Dominique Senard will succeed Michelle Rollier as chairman of tyre manufacturer, Michelin. M Rollier plans to retire with effect from May 11 this year. Having presided over Michelin since 2007 the outgoing chairman says: “We have been doing a lot to prepare this company for the future [and although] a lot of new challenges are coming up, we are well positioned to take full benefit.”
After three and a half years as BMW Motorrad executive vice president of sales and marketing, Hans Blesse will take over as VP BMW Motorrad USA as of April 1. He take over from Pieter de Waal, who has held this position since 2008.
29&30 MAR 2012
LMJ’S LeAn SAfety SeMinAR + BenchMARking ViSit Lean Safety Seminar, Oulton Hall, Leeds Thursday 29 March 2012, 09:00 – 17:00
Benchmarking Visit, Rexam, Wakefield Friday 30 March 2012, 08:30 – 14:30
Who ShouLd Attend? Operational and lean professionals interested in learning how to move their lean efforts forward by focusing on safety
Health & Safety professionals who feel disconnected from a company’s lean efforts
Senior leaders who want to engage their workforce in meaningful cultural impacting activities
Safety team/committee members who want to learn how lean tools and techniques can drive safety improvement
The Lean Management Journal invites you to a unique and vital seminar and benchmarking visit that takes safety from compliance to continuous improvement, taught by lean safety expert and international author Bob Hafey.
Delegate Fees Early Bird List PriceLean Safety Seminar £345+VAT £395+VATLean Safety Seminar and Benchmarking Visit: £695+VAT £795+VAT
eARLy BiRd offeR*SAVe 100+VAt
Places are strictly limited on both the seminar and tour, early booking is advised. For more information or to register, telephone Benn Walsh on 0207 202 7485 or email [email protected].
During the seminar attendees will participate in group exercises that will help improve the safety programme in their facilities. Delivered at off-site training rooms, exercises could include:
Process mapping an incident/accident investigation process that gives focus to root cause analysis and corrective actions
Process mapping other safety processes such as forklift training, evacuation plan, lockout/tagout training, safety walk, emergency response plan, etc.
Creating safety improvement and safety observation forms that can engage all employees in a business
With an annual turnover of £5bn, Rexam is one of the world’s leading consumer packaging groups and beverage can makers. The visit will include presentations on its production methods that utilise lean tools, systems and principles. Bob Hafey will then lead a Gemba lean safety assessment visit using the teaching from the previous day. Delegates will be asked to assess then discuss the site’s current level of lean safety and compare findings with those of the other teams.
Lean Safety Seminar Lean Safety Benchmarking Visit – Rexam
These articles are abridged. For full versions go to
Terry Scuoler, chief executive of EEF, urges manufacturers to voice their Budget concerns at the National Manufacturing Conference
and describes what the manufacturer’s organisation has already called for.
12
I n just a few weeks, the Government will set out its latest thoughts on the economy and measures to encourage stronger growth. I strongly recommend that the Chancellor picks up the messages
from industry at the first EEF national conference and responds to them in his Budget announcements.
One of the most positive measures that the government could take would be to temporarily increase capital allowances to 100%. This would
provide an immediate boost to cash flow and send a clear signal to firms that they should invest now to maintain their competitive positions. Past experience shows that modest moves in allowances make very little difference.
Looking beyond immediate measures, the Government needs to do a lot more to spell out its ambitions for the UK economy. In doing so, it should look to its own Fiscal Mandate. This sets out clearly the government’s
aims for reducing its level of borrowing and debt. Our economy has benefited from this clarity and industry now needs to see a similarly strong and focused strategy for growth.
We believe that government should focus on four key ambitions for our economy: more companies bringing new products and services to market; more globally-focussed companies expanding in the UK; a lower cost of doing business in the UK, and a more productive, more flexible labour force.
The overriding importance of achieving these objectives should drive the government’s programme for reforming our economy, prioritising areas where our business environment needs most improvement, such as taxation, access to finance, regulation, skills and infrastructure.
Government needs to judge whether its existing or planned policies are consistent with these objectives. Will its approach to climate change help to deliver competitive energy prices and reduce the cost of doing business? Will its policy on migration help to provide industry with the skilled flexible labour force it needs?
None of this will be easy but only when it is done will the Chancellor’s reference in last year’s Budget to the ‘March of the Makers’ become a reality.
Thebigpicture
One of the most positive measures that
the government could take would be to temporarily increase capital allowances to
100%
Public funding for university research is being squeezed and many researchers are turning to the private sector instead. Dr Tim Minshall argues for the benefits this trend will bring.
Driving research out of its ivory tower
W ith public funds stretched to their limits
and beyond, university researchers are increasingly beating a path to industry’s door in search of funding. This will have a necessary impact on the type and relevance of research carried out in the UK.
While Government-funded research does generally require some demonstration of real-world impact, too often this is a last-minute addition to the funding application – a box-ticking exercise, rather than a real driver behind the choice of research topic.
With industry-funded projects companies are likely to work closely with researchers from an early stage, often as part of a consortium of academic and industrial partners. Industrial input provides academics with insights into the current problems facing companies and helps to steer research to address industry’s most pressing needs.
While more long-term ‘blue-sky’ research remains important and will need government support, encouraging industrial funding of more applicable or urgent topics will create direct benefits to all involved.
Cambridge University recently ran a workshop
for academics on how to build partnerships with firms. Participants used role plays and elevator pitches to practice the strategies they should adopt when investigating the needs of commercial partners and connecting this with academic research.
The Institute for Manufacturing has already been involved in many successful research collaborations with industry and is convinced that, overall, the trend for greater collaboration between industry and academia is win-win. Researchers get real problems to work on and real insights into where industry is going. Companies in turn have a direct influence on the direction of research and gain access to research findings which they may not have the expertise or resource to uncover alone.
Too often, in the past, researchers have been able to avoid thinking about the relevance and applicability of their work to the real world. Industrially funded research collaborations means this becomes a starting point rather than an afterthought.
Dr Tim Minshall is a Senior Lecturer in Technology Management at the Institute for Manufacturing. www.ifm.eng.cam.ac.uk/people
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Have your say at www.themanufacturer.com 13
agenda early on and clarify the skills that will be needed in addition to core professional competencies.
But the talent pool undoubtedly needs to be grown and this will not happen with any speed using present methods. Colleges and universities need to have policies
in place and careers advice should come from those in industry who
know the breadth of opportunities in manufacturing, as opposed to lifetime careers
advisors with limited knowledge of the real world of manufacturing.
Board recruitment methods also need to be more transparent and open. In my experience, the methods used for recruiting directors, whether
executive or non-executive, are, more often than not, the results of discussions between
company executives about whom they know that would be a good candidate.
This is generally limiting. But since director posts are not advertised, particularly in medium-sized firms, an
ongoing circle of exclusivity persists. This is very hard for women – a relatively
new and unknown quantity to the sector – to break through. Small and medium sized
company boardrooms are intimate places.With these challenges being particularly defined
in SME companies, it is unhelpful for the public debate to constantly focus on the FTSE companies.
How the recruitment method problem is to be solved I’m not sure, but it is not appropriate for government to dictate to private companies about the recruitment of directors.
I’m pretty sure that we could reach the goal of balance sooner than in 70 years, but this is not going to be achieved by legislation nor can it can be solved by a numbers-driven recruitment drive.
T he Lord Davies report Women on Boards warned that it will take 70 years to balance boards if we continue at the current rate of change (p27). While this might be
undesirable, forcing quotas onto companies will not solve the problem. The message about women on boards should be one about quality, not quantity - and quotas will not resolve this.
There is clearly a business case for gender balance on boards, but there is the assumption that this is due to prejudice or discrimination, when in fact it’s probably more a question of supply and demand, particularly in the case of manufacturing.
If you look at the pool of female talent in manufacturing generally and then look at the number of women with the ability and desire to be company directors, the figure is probably tiny. Any potential woman director needs not only that ability to become a board director, but also the desire, for without this she will not demonstrate the assertive drive anyone needs in order to reach the top.
Being a company director is very different to being an engineer or production manager and is not generally a goal that many have at the outset of their careers – whatever engineering discipline they specialise in. Perhaps laying out a clear career path with the possibility of directorship as a goal at the start of training would help. Public role models and case studies could encourage young women to have the confidence to put this on their career
13
Thenaked engineer:stripping industry issues bare
At the Stockholm Summit in mid-February David Cameron raised hackles as he indicated that introducing quotas for leading companies for the number of women on their boards would not be ruled out by UK government. Here our NE responds to the threat of enforced gender balancing.
I’m pretty sure that we could reach the goal of balance sooner than in 70 years, but this is not going to be achieved by legislation nor can it can be solved by a numbers-driven recruitment drive
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More and more attention is being given to the crucial
role that supply chains can play
in delivering innovation
innovative supply chain? There are a number of ways in which this can be achieved and success will depend on a management programme that looks to implement not just one, but key components of a number of models.
The first step is to source and secure suppliers who have a history and appetite for introducing innovation through the development of new technologies or the application of existing technologies in new and novel ways.
The second step involves implementing a contractual model that fosters and promotes value adding. This may mean moving away from (but not completely abandoning) traditional contract models which are heavily reliant on obligations for single product delivery and replacing them with contracts that promote the continual review of existing processes and the forging of collaborative relationships.
What should you be doing?The means of promoting supplier led innovation are numerous though not all will be applicable to every manufacturer. A good basis to start with any supply relationship is to demand that any organisation that is tendering for a position in your supply chain is required to demonstrate how they will promote and practise both collaborative and innovative behaviours.
Contracts which seek to promote and reward innovative thinking are becoming key to maintaining market position. It is therefore never too late to review your contracts to ensure that the innovative practices you demand of your own organisation are reflected throughout your supply chain.
Thelegallowdown
The UK manufacturing sector’s ability, or lack thereof, to compete with rapidly developing, low cost economies like India, Korea and China has been an increasingly sensitive topic for debate in recent years.
Can we compete
For more details contact: Matthew Bridger, Associate, Thomas eggar LLP [email protected] or 023 8083 1214
I nnovation, particularly around value-add service has been hailed as an answer to the competitive
challenge, not only for the UK but for all advanced economies. But for truly innovative products and services manufacturers must begin looking beyond the confines of their own organisations on a far wider scale and in a more formalised manner.
InnovationDespite it being bandied about as the latest buzz word and seen as the key to our future manufacturing success, ‘innovation’ in manufacturing is, of course, not a new concept.
There has always been a need to continually evaluate and re-assess products, operational processes and the application of existing technologies in new and novel ways in order to expand and create new market opportunities.
In times of economic challenge however, the role and relevance of innovation does become more acutely defined. It is tempting, and often essential for cost cutting measures to assume a degree of priority, but there are limits to this, and a practical realisation that for some products, no amount of cost cutting will enable UK firms to compete with those operating in low wage economies.
Instead, manufacturers need to balance cost reduction strategies with a focused and well planned
14
with emerging economies?
innovation programme to maintain market position and plan for future growth.
The difficulty is that innovation programmes require investment which many firms are finding a challenge to secure. Accordingly, large scale innovation programmes which focus on expanded R&D, new manufacturing equipment, revised management processes and new marketing programmes may be limited.
But investment need not always be inwardly sourced. Indeed, more and more attention is being given to the crucial role that supply chains can play in delivering innovation.
Innovation and the supply chainCreating a supply chain that successfully supports and delivers innovation has become essential to the survival and success of manufacturers. No longer are suppliers being seen as stand alone entities in a production process, where the focus is on obtaining the most cost effective bottom line supply price.
Rather the emphasis is moving onto how prepared they are to forge a more collaborative relationship with manufacturers. Doing this will help to build supply chain capabilities, improve existing products and processes and develop new market opportunities.
So how can manufacturers establish a successful,
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Expectations for growth in UK manufacturing are rarely expressed
without references to large companies like Jaguar Land Rover, Nissan and
Coca Cola Enterprises far in arrears. But should we really be looking to
these kinds of companies – many of them foreign owned – for our future
industrial and economic security? Jane Gray considers the importance
of fostering a dynamic entrepreneurial manufacturing base in the UK.
T here has been so much talk in recent years of the decline of manufacturing in the UK that you would be forgiven for believing that a trend for offshoring- or
simply succumbing to insolvency had marched forward unchecked.
But play the numbers game and the figures will soon make this idea impossible to support. The fact is, that in simple terms of the number of manufacturing companies in the UK, we have experienced steady growth. In 2010 alone 9605 VAT/PAYE companies designated as manufacturing-type organisations were registered as start-ups.
Place this number against recent research from PwC showing around 4000 insolvencies in UK manufacturing companies since 2010 and there is still an obvious swelling of entrepreneurial young firms rather than contraction.
But what is the value of such enterprises? Can they, and should they, be expected to
The Swifty Scooters final
assembply workshop
powerof many
THE
Leadstory The power of many
17
grow into the multinational manufacturers of tomorrow? And if not – do they retain any economic significance, or are they representative of a rather parochial approach to competition?
Can start ups, stand up?Robin Johnson, partner at Eversheds LLP and a leading M&A lawyer hints at huge potential, blocked by a multitude of cultural and practical barriers. “Entrepreneurial start ups are essential to the continuous growth of UK manufacturing,” comments Mr Johnson, “and there are a lot of very ambitious owner-run SMEs out there who are great at innovation.”
The rub, says Johnson, is growth. “Typically, when they start expanding problems occur. Particularly if they are seeking new markets. People think it is enough to get help from UKTI and attend a trade show or delegation, but this does not help with the day-to-day and the fundamental alterations to company infrastructure that will be needed as a company grows.”
There is a huge attrition rate for small firms that try to pursue ill researched opportunities or run before they can walk. Data published by the Federation of Small Businesses shows that around half of companies set up in the UK fail in their first four years. There are myriad reasons why this is so, but Johnson comments, “The attrition rate doesn’t mean that companies should ‘stick at what they are good at’ and not look to expand. An entrepreneur recently said to me ‘If you don’t keep trying to climb, then gravity will pull you back’. So standing still is not an option.”
Johnson concludes, “What entrepreneurs lack is proper mentoring. And furthermore, by their very nature entrepreneurs can be extremely reluctant to take advice. They yearn to carve their own road.”
But it is possible to strike a balance and provide disinterested
What entrepreneurs lack is proper
mentoring. And furthermore,
by their very nature
entrepreneurs can be
extremely reluctant to
take advice
Robin Johnson, Parner, Eversheds
Jacqueline Cullen
Growth. It is being targeted by government and industry alike and certainly the UK must grow its GDP to address its gaping deficits. But not every company can or should aim to grow beyond certain proportions. And in spite of size limitations such companies bring other attributes to the business mix of a nation.
Jaqueline Cullen is a jewellery designer and manufacturer based in Whitby, North Yorkshire, a location also famous for the jet that Jacqueline relies on for her work.
As an artisan manufacturer of a niche luxury product Jacqueline has no expectation of growing to scale production. Indeed to do so would be damaging to her offering. “I’ve been given details of people who could produce my basic jet units in Bulgaria for a fraction of the price, but this simply doesn’t fit my product story or the integrity of the brand. People buy my jewellery because it has provenance.”
Last year Jacqueline turned over £67,000 and there has been a trend for between 30-50% growth year on year for some time. But retaining the above made-in-the-studio credentials undeniably puts a limitation on growth and although Ms Cullen’s business makes her self-supporting, it will hardly provide an answer to national economic woes.
Does this matter? For Ms Cullen the value of British artisan manufacturing lies elsewhere. “We bring an immense cultural value to the nation,” says Ms Cullen. “Furthermore the skills and craft knowledge we retain are currently very much sought after as be brands like Gucci and Dolce & Gabbanna look to emphasize their artisan heritage and credentials. I think the cultural importance of businesses which are protecting artisan skills needs to be recognised more widely.”
18
mentoring without crushing entrepreneurial independence. A campaign for the advancement of British artisan manufacturing, Crafted, is doing just this.
On the board of Crafted mentors are some true heroes of British manufacturing whose products and companies are representative of the intrinsic value that a ‘made in Britain’ stamp can bring. Georgia Fendley, at luxury handbag manufacturer Mulberry, Mark Henderson of Gieves and Hawkes tailors and Lulu Lytle of bespoke furniture makers Soane Britain are just a few examples.
These experienced business people are match-made with a selection of 12 British artisan manufacturers every year and work alongside skilled entrepreneurs to advise on business and financial planning, approaches to marketing, brand management, supplier relationships and more.
Alone, none of the companies on the Crafted campaign are going to level our immense imbalance of trade or noticeably raise GDP, but says Jason
modern technology for the kind of business model that is needed for today and tomorrow.”
And Iftakhar is keen to emphasize the wider impact of entrepreneurial businesses like his own too. “It’s not just about success for Swifty itself,” he says. “Now that we’ve expanded I think we probably support around 100 jobs in our supply chain.” The ripple benefits of Swifty’s establishment, in other words, are safeguarding local prosperity.
Losing our gripThe level of success and rapid growth demonstrated by Swifty Scooters is not a one off. Examples of designers, engineers and artisans in a variety of sectors launching products, manufactured in the UK, that become keenly sought after are not hard to find. The Cambridge Satchel Company, for instance, was set up by Julie Deane from her kitchen table in 2008. After taking the fashion world by storm, the company now produces in the region of 1,500 satchels a week and is approaching a £10m turnover milestone.
Iftakhar, founder and creative director of Swifty Scooters, “we should not underestimate the power of the many.”
Since launching in September 2011 Swifty has sold over 400 of its cleverly engineered folding scooters including a bulk order from Singapore. Retailing at £450 a pop these sales mean that, at six months old, Swifty has turned over half a million pounds – and this has been done during recession and in winter. “I am eager to see what some summer weather will do for us,” comments Mr Iftakhar.
Continuing to extol the virtues of entrepreneurial business Mr Iftakhar continues, “A dynamic base of start ups and smaller firms can create a better hedged environment. It makes more market opportunities accessible overall and is more agile. It takes an awful lot of effort to effect a change in a large organisation. But we are not afraid to change and we don’t have a lot of outdated infrastructure tying us down. Most modern start ups are ahead of the curve and in a much better position to leverage
Metal forming for the Swifty One scooter
Leadstory The power of many
19
Of course demonstrating this kind of dramatic growth curve and owning a product which is a la mode or game changing in an sub-sector attracts attention. And this is another challenge for manufacturing entrepreneurialism in the UK says Evershed’s Johnson. “Successful companies will attract investors and acquisition enquiries,” he comments. And while some entrepreneurs are wed forever to their original product and business – for every one of these there are a magnitude more who are more than ready to sell up.
“I see an awful lot of serial-start up type entrepreneurs in the UK
who like to grow a seed but are uninterested in taking care of the tree or eating the fruit,” continues Johnson. This is not necessarily a problem – but the fate of these sapling businesses could be.
Whether through lack of savviness in M&A or lack of motivation, it seems that indigenous medium sized and large companies in the UK tend to lose out to foreign buyers more often than not when promising home grown start ups come onto the market.
Our lead interview subject for March, Mike Norfield, CEO of Team Telecom Group (p22) comments, “UK SMEs don’t generally have a lot of know-how
when it comes to M&A and this is a huge problem if the sector wants to grow. You can only get so far with organic growth and it makes sense, for the advance of technology and capability, that there should be consolidation at times. It is essential that innovative, ambitious UK leaders overcome their fear of acquisitions.”
Johnson adds to this with a perception of foreign confidence in acquisitive growth strategies. “Historically most acquisitions that I have seen are made by companies from North America and western continental Europe,” states Johnson. “In the future this may change but I have concerns about the cultural compatibility of M&As pursued from the Far East.”
Cultural issues aside, while foreign ownership often transforms into inward investment in UK firms, it ultimately means that the UK loses control of those companies. It also means that an opportunity for the indigenous middle ground to feed off UK entrepreneurialism and create a confident emulation of the German mittelstand is lost.
To return to the questions posed at the beginning of this article. It seems that yes: UK start ups can be expected to grow, and in some cases they will break through to become the household names of tomorrow. But for many, the economic, social and cultural contribution available for the UK is being left unacknowledged and under-leveraged. A combination of unwillingness to seek help, a lack of awareness around where help can be found and a more competitive approach to M&A from foreign parties are perpetuating this situation.
Campaigns like crafted, the BIS Get Mentoring Scheme (see box) and organisations like the Manufacturing Advisory Service (p46) are going some way to answer the support and guidance issue. But a tendency towards inward thinking and lack of acquisitive confidence in the UK’s medium sized business seems largely unaddressed.
A government response
Going for growth, government has recently upped engaged in renewed activity to support the growth of
SME businesses in the UK.
In late February the Department for Business Innovation and Skills (BIS) launched a new online tool to supports its Get Mentoring Scheme – an initiative announced in November 2011 which aims to connect experienced business people
with small firms and entrepreneurs to provide impartial advice and guidance on how to achieve sustainable growth.
The Get Mentoring scheme aims to sign up 15,000 business mentors across sectors. So far 3000 have joined and 2000 have completed the workshop training required.
Becoming a mentor is voluntary, and using the mentor service is free to small business owners and entrepreneurs.
But are the good intentions of this scheme sufficient? Speaking with Jason Iftakhar of Swifty Scooters, it is clear
that some entrepreneurs are disillusioned by a historical lack of support for small business enterprise.
“It infuriates me when I see the Business Minister on television and he talks of the support available,” says
Iftakhar. “After draining resource on looking for support options and filling out the endless paper work involved I
have always found that I am not applicable. But we have a British-made product which we are successfully exporting to foreign markets – all the attributes government say they
are looking for.”
Crafted mentor Georgia Fendley of Mulberry says this experience is not uncommon. “I have been shocked
on the behalf of those that I work with, at how little support is available to entrepreneurs and small business
owners,” comments Fendley. With such a backlog of disappointment government will have its work cut out to
gain trust such new initiatives.
Historically most
acquisitions that I have
seen are made by companies
from North America
and western continental Europe
Robin Johnson, Parner, Eversheds
22
choices including positions with service organisations like British Telecom and the Post Office, but he plumped for the manufacturing company – despite the fact it was lowest paid. “With Redifon I gained my radio engineering and electrical qualifications,” recalls Norfield. “And at that time I gained an insight which new engineers entering the telecoms industry in the UK today will never acquire. Redifon did all its own manufacturing under one roof, even down to component level. And so I got to understand the products they were turning out right from R&D through production and to installation and servicing.”
At first it was the starting point of this product journey which fascinated Norfield, and his first professional position with Redifon was in its R&D department. “But then I realised that there
Jane Gray talks to Mike Norfield, CEO of Team Telecom Group, a telecommunications specialist, to discover the drive behind his incredibly varied career path from manufacturing apprentice, through a gamut of industry sectors and finally to lead an MBO for a position at the head of his own British SME.
no boundariesImagine
A strong foundation And at the start of it all, a foundation in appreciation of quality, and the interaction between product and service delivery, gained through a manufacturing apprenticeship with Wandsworth-based electronics manufacturer, Redifon. “Making the choice to work for Redifon was undoubtedly a turning point for me,” says Mr Norfield. “At sixteen years old I left school and had no idea what I wanted to do – apart from to play football for Chelsea.
“On reflection, I realised that probably wasn’t going to happen, so I went and looked for a job. Although I didn’t know what I wanted to do, I did recognise my own aptitudes – most kids do – so I knew I found maths and science pretty easy.”
In the South London area this presented Mike with several engineering-type
“y ou are only limited by your own imagination,” comments Mike Norfield decisively as he describes the philosophy which has guided
his professional and personal choices in life. And it would seem that Mr Norfield must have an
extremely intrepid imaginative bent, for this principle has taken him on a route from a less than luxurious upbringing in South London to own a UK company which turns now turns over £50 million and is on a striking growth trajectory.
“Failure is not an option.” The mantra
of Mike Norfield, CEO of TTG
InterviewMike Norfield, CEO, Team Telecom Group
23
was a disconnect between what we were doing and the experience of the end customer,” Norfield explains. “As a whole manufacturers have tended to be very engineering led,” he goes on, “but I have come to see that you simply must be led by the market; by sales. It is no good having a beautifully engineered product if the customer doesn’t want it, or can’t use all the capability you have designed into it.”
With this thought in mind Norfield set out to investigate the art of ‘delivery’. Of identifying customer needs and translating them, not only into products, but also business models and service offerings which answer their needs with efficient ingenuity. “I set out into the ‘big wide world’ as I saw it, to find out what service delivery was all about,” sums up Norfield.
En route in this investigation, Norfield found himself working for both public and private sector with organisations as diverse as the Metropolitan Police, Scottish Telecoms, financial service company Fidelity Investments and consultancy Project Techniques, where he delivered major IT projects for Microsoft, Cisco and Sony among others.
Leaping from opportunity to opportunity in a bid to gain as broad an understanding of the way products and business models deliver value as possible; Mike also discovered that he had a talent for leadership. And that he thrived on responsibility for business risk.
“I was always first in and last out,” he says. “I am not driven by money, but by success in itself. It is a wonderful thing to be part of building a company, creating jobs and the opportunity for others to put food on their families’ tables, pay their mortgages and so on. You can’t learn business leadership in school. But when you are in a decision making seat you learn very quickly about the importance of cash flow and your relationship with investors.”
An awareness of how employees rely on the success of
the businesses they work for is a strong motivator for Norfield. “It is what has always made me put finance first,” he says. “I never had much money growing up and so I have been fascinated by making what I gain work.”
The boy dun goodAnd there can be little doubt that Norfield displays an aptitude for making money work, both personally and professionally. He bought his first house before his parents owned theirs and by the age of 30 had managed to wrangle an appointment as general manager of the Indirect Telephony Services unit of Scottish Telecom. While also building his family unit Mike managed to turn this business into the fastest growing unit at Scottish Telecom within two years.
“I had gained a wife, who was heavily pregnant by this time – and two cats,” Norfield comments, raising the question of how to achieve that work-life balance, so elusive to many driven businessmen.
It is not a challenge to be underestimated, says Norfield. “If you want success and a good lifestyle it will come at a price,” he comments, “but there are things you can do to make the most of the time you have with your family. Make sure you get supermarket deliveries in the week so that you are not shopping on Saturday’s and book great holidays.”
Mike recently rated his most extravagant but worthwhile spend as a month long exploration of Australia with his wife and two children in an interview with Real Business magazine.
rescuing an national assetNorfield’s strong work ethic and ability to engineer resilient business models put his services in high demand and it was not until the 2000s that he was given a prospect that allowed him to return to the roots of his professional life and back these attributes up with personal technical knowledge of the products he was helping to design, produce and implement.
On being approached by ex-colleague Peter Burridge, now chairman of TTG [Team Telecom Group], however, Mike found himself faced with the chance to turn around a struggling British SME with an aging product range, but which he none-the-less believed to have huge potential.
“TTG was losing money at the time and Spice [then owners of TTG and a fast growing FTSE 250 company] wanted to get rid of it, as it was quickly becoming non-core to their vision of providing a one-stop-shop for utilities services,” explains Norfield.
“What I saw in TTG was a chance to demonstrate everything that I had become good at; managing an acquisition, turning a business
I am not driven by
money, but by success in itself. It is a wonderful thing to be
part of building a company,
creating jobs and the opportunity for others to put food on
their families’ tables,
pay their mortgages and
so on
Mike Norfield, CEO, Team Telecom
Group
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Interview Mike Norfield, CEO, Team Telecom Group
25
around and internationalising a business,” he continues. “There was also an attractive opportunity to get back in touch with my roots in Simoco, the radio telecoms arm of TTG.”
A plan was swiftly hatched between Burridge, Norfield and the Spice board to transform TTG with a view to buyout. Simoco formed the focus of Mike’s business turnaround strategy and despite losing £300,000 in his first financial year at the helm he was able to flourish £800,000 profit in the next. By 2010 Burridge and Norfield had created a promising enough proposition to raise £32.8m, with private equity support from Gresham, and were able to go ahead with their management buyout.
Today TTG turns over £50m and Mike hopes to double that in the near future. “Our success then and ever since has been a mark of the way we started revisiting the products, the manufacturing processes and internationalising the business,” says Norfield. “When I took over, Simoco was eighty to ninety per cent a domestic business. Now we truly address and service a global marketplace.”
In addition, Norfield provided “a shot in the arm and some belief” into the company’s sound but aging technology range in analogue radio communications. “There was a great core there,” says Norfield. “But from the mid-nineties the products and the people had suffered from poor management - only in it for the money and with no consideration for what was best for the company, for its customers – or for UK manufacturing.”
A new eraFor TTG and Simoco in particular, Norfield took the view that ‘what was best’ would be to continue a trend for outsourcing most of the manufacturing process and concentrating on an integrated process of product R&D and service development.
Retaining a lot of analogue technology long after others shelved such products, Simoco redesigned to corner a huge market in the developing world. At the other end of the technology spectrum, Simoco’s development and test site in Derby is also a List X supplier site to the Ministry of Defence and its key new technology, the Xfin Blade is playing a critical role in the management of international telecoms networks from the South West of the UK to Afghanistan.
While some manufacturing has gone abroad, components with high IP are sourced locally, like TTGs specialist PCBs which are made by electronics manufacturer Tioga – also based in Derby. For quality assurance, final assembly and testing are still carried out in-house at sites in Huntingdon, Cambridgeshire and Derby.
“This is a natural progression,” comments Norfield. “Manufacturers like us need to move out and become the industry. We then feed back in with better design and our supply chain develops. Without this, technology, and manufacturing would never move forward.”
But there is a catch in the UK. “It’s farcical, the approach UK government has taken over the last few years to supporting SMEs and manufacturing in the UK,” states Norfield. “They flippantly change policy with every change of power. But this nearly always means a change to tax and the way in which businesses need to manage their costs.”
Support for R&D and education, unsurprisingly, are the two areas Norfield believes must be addressed most urgently. He explains, “If the manufacturing sector is to take on responsibility for economic growth, which government is now laying on its shoulders, we need then to understand the way we are signing contracts and the length of development cycles.”
“Moreover, there needs to be a broader responsibility for preparing our next generation of engineers. My daughter will be coming to do her work experience with Simoco – I want to inspire her and show her what we do – but government provision of apprenticeships needs to be truly employer led, which in my experience it is not yet.”
Manufacturers
like us need to move out and become the industry. We then feed back in with better design
and our supply chain develops.
Without this, technology,
and manufacturing would never
move forward
Mike Norfield, CEO, Team Telecom
Group
1979: Industrial Apprentice with Redifon (Rediffusion Radio Systems), Wandsworth. Qualified in Radio engineering and electronics
1984: Technical officer for the Metropolitan Police
1991: Consultant with Fidelity Investments
1997: General Manager at Scottish Telecom
1999: CEO of consultancy, Project Techniques
2002: CEO of technology integrator TFM Cyntergy
2003: COO of hotel distribution company, 4Oceans
2004: MD of Simoco
2010: Aquired TTG from Spice in an MBO with TTG chairman Peter Burridge. Became CEO of TTG
Biography Mike Norfield
60 second
26
Who is CIPS and what role does it play?Headquartered in the UK, CIPS is celebrating its 80th birthday this year. We are the world’s largest procurement and supply management professional organisation, involved with bespoke training up to and including degree level. We support businesses and organisations of all sizes and sectors and work with governments all over the world. We have a membership of 66,000 worldwide, additional offices in South Africa, Melbourne in Australia, the Middle East and are opening up in China and India this year.
What training do you provide?At the lowest level we provide skills training to help improve negotiation right up to master classes for senior practitioners and everything in between. The offering we provide to corporate companies tends to be tailored to their particular business needs. We deliver underpinning knowledge for procurement and supply chain work and offer training tailored to the specific industry the business operates within.
Where does the PMI sit within your offering?A big part of what we do as a professional body is to represent the interests of our members as the voice of procurement and
they may have before. Quite often the risk to supply is not in direct or tier one suppliers but a lot further down the chain where risk mitigation strategies are equally crucial.
Is China still the primary low cost manufacturing economy?We have seen a shift in the centre of gravity for a lot of manufacturers. While China was the place to be, we’re now starting to see countries like Brazil, Malaysia, The Philippines and Vietnam raising the profile of their capabilities. Companies now have to be much more agile in terms of deciding where to find the best place to source. What this means is that businesses need to have staff who are not only procurement and supply professionals but also understand the impact of moving supply chains around the world and managing very complex, long-reach supply chains. In addition, we are also starting to see a levelling off in the cost advantage of using Far-Eastern manufacturers. The big challenge that UK manufacturers still face is that places like China can deliver great flexibility thanks to the speed in which they can increase their headcount almost overnight. In fact countries like China are now becoming the creative, innovative force of the future.
For more information visit www.cips.org
supply. This is why we helped create the PMIs alongside Markit, the financial information services company. We started with manufacturing in 1991. Purchasing managers are at the heart of business and the PMIs represent a cross section of industry, with the ability to tell exactly what is happening with business activity on the ground. The PMIs have developed to become one of the first monthly indicators of what is happening in the private sector economy and have consistently proven themselves to be accurate and timely, appearing well ahead of comparable data produced by government bodies.
Have you noticed any particular supply chain trends emerging recently?Lately there has been a tendency for a greater level of dual sourcing. It used to be quite common to concentrate manufacturing capacity in the Far East but events like the Tsunami and the Ash Cloud have revealed how vulnerable companies are to geological events. There are increasing numbers of companies looking at local sourcing or nearer sourcing, sometimes as a way of topping up capacity but also as a deliberate way to dual source products to mitigate risk and ensure business continuity. Organisations are also considering due diligence issues and digging deeper into supply chains than
The PMIs have
developed to become one of the
first monthly indicators of what is
happening in the private
sector economy
60 second Interview
quizzes Andrew Coulcher, director of business solutions at the Chartered Institute of Purchasing & Supply (CIPS), about the member- led organisation and the supply chains trends currently impacting global manufacturing companies.
27
Leadershipin manufacturing
to women in entering males dominated spheres and increasing their participation in the labour market overall could release as much as 2% additional GDP. Not to be sneered at in a time when growth is voraciously sought after.
How to effect changeThe latest figures show that FTSE 100 boards in the UK now consist of 15% women and FTSE 250 companies of 9.4% women. This is up from 12.5% and 7.8% respectively from February 2011, though the percentages are far lower for industrial companies.
But the UK has one of the lowest levels of female boardroom representation in Europe and at the current rate of change Lord Davies’ report suggests it will take 70 years to achieve gender balance on the boards of the UKs top 100 companies. With other countries around the world moving much faster, the UK risks leaving itself at a competitive disadvantage given the benefits of gender balance identified above.
The recommendations made by Lord Davies did not suggest formal quotas should be introduced by government to enforce better balance but Prime Minister David Cameron recently caused a furore in the press when he said at the February Stockholm Summit that quotas will not be ruled out by government in order to accelerate change.
Overall, businesses are understandably keen to avoid another layer of bureaucracy, but not all are matching this by responding to recommendations for voluntary change proposed in Women on Boards.
According to a 2011 report from Board Mentoring only 56% of FTSE 100 companies could confirm that they had policies in place to promote boardroom diversity and only 33 of the UKs top 100 have set themselves
In March we celebrate
international Women’s day and at that means the opportunity
to highlight some stellar female careers and
contributions to the industry. But
deserving of praise as those examples are – why are there
still so few? Jane Gray considers
gender imbalance in manufacturing and the pros and
cons of engineering more opportunity for engineering
women.
I nternational women’s day is now celebrated annually on around the globe and this year, on March 8, the sector skills council for manufacturing, Semta, has organised a
reception at the House of Lords in order to throw the achievements of female manufacturing leaders in Britain into the spotlight.
Semta, among many others has been active in campaigning to attract more young female talent into manufacturing and on p48 you can see a few examples of the kind of high achievers they have encouraged into the industry’s apprenticeship pool. But the attrition rate at junior management level for such bright women is still markedly high and there remain very few senior women in the manufacturing industry – particularly in technical manufacturing and engineering roles.
Does this matter?This month we are due to see a one year progress report on Lord Davies’ Women on Boards study, commissioned by government in August 2010, and published in February last year. Women on Boards revealed the significance of female talent loss to economic performance. The report surveyed the UK FTSE 350 across sectors and found that companies with more women on their boards consistently outperformed companies with male dominated leadership. On average they achieved a 42% higher return in sales, a 66% higher return on invested capital and a 53% higher return on equity.
This reflects recent European data and research released by the not-for profit industrial support body, EngineeringUK, estimated that removing barriers
pro quotaQuid
It is not inevitable, but it is highly likely, that manufacturing will remain male dominated for some time to come
Carol Burke, Head, Unipart Manufacturing
28
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targets for improved diversity. Furthermore, only 10 of these have set themselves targets to increase the number of board level women by more than 10% - Lord Davies recommended that all FTSE 100s should be targeting 25% female representation by 2015 and that all FTSE 350 companies should have policies and targets in place.
In order to avoid quotas it is clear there needs to be far more widespread commitment to change. The 30% Group is fighting for this through gaining voluntary support from the nation’s leading chairmen to raise awareness about diversity issues. Members of the 30% Group span sectors, but notable industrial figures include: Allan Cook, Atkins; Dr Franz Humer, Diageo and Sir Simon Robertson, Rolls-Royce.
In addition to the work being done by the 30% Group, organisations like Semta are working with companies to demonstrate how mentoring practices can help to reduce attrition rates for female talent. For example, it has recently launched a careers progression programme with engineering support organisation, Babcock, to optimise the career development of 19 female employees.
Glass ceilings and perception issuesSchemes like these are to be praised for their intentions. But are they battling against endemic and inevitable attitudes towards women in what has undeniably always been very much ‘a man’s world’?
Carol Burke is head of Unipart Manufacturing in the UK. An overtly independent and successful engineer and business woman, she has some strong views on approaches to creating gender balance in industry.
“It is not inevitable, but it is highly likely, that manufacturing will remain male dominated for some time to come,” she says. “This not just an issue for manufacturing. Most ‘traditional’ sectors which require high
levels of technical qualification and where it has been difficult to create work flexibility are male dominated.”
Furthermore, Mrs Burke states, “There are still glass ceilings – but I do not think this is a peculiarity for female progression. The boardroom is a tough place to get to and a tough place to be. Politics is huge there and board members will look for weakness or difference. When the majority of board members are men this means that a woman will stand out and be positioned in a certain way.”
“This probably shouldn’t be the case,” she continues, “but it is, and if you are a realist you will find ways to overcome it. Quotas would not help.”
While stating this, Mrs Burke did continue to state that finding ways around these barriers in order to improve gender ratios is important. “But this is a bigger issue than gender difference,” she says. “The few women at board level do not necessarily act as mentors. There are a whole range of academic studies which show that women in senior positions treat others rising to the top very badly – and I have seen that kind of behaviour personally. Men are far more collegiate.”
For herself, Burke says she has taken help where she can get it and pushed herself
forward for every opportunity she has wanted. “You have to be confident in your abilities and, crucially, know how to deal with people,” she says.
And when it comes to recognition, Burke is again reluctant to let gender muddy the water. “I have realised that it is important for me to act as a role model now, but it is not something I am comfortable with. I want my achievements to be recognised for their own worth. Not simply because I am a woman.”
Broader issuesOf course the prospect of quotas for FTSE companies leaves bigger questions around how to achieve gender balance in the majority business population of SMEs out of scope. It also ignores a question mark over ethnic diversity at the top of UK manufacturing companies.
Isobel Pollock, president of the Institute of Mechanical Engineers says this is something of an elephant in the room. “As the manufacturing industry becomes understood as a clean, safe, creative environment with technology very much at its heart, we must ensure that it attracts all kinds of people and that the best stay with our industry to lead it. This is not just a gender challenge. But a broader diversity issue,” she says.
Leadershipin manufacturing
This is not
just a gender challenge.
But a broader diversity issue
Isobel Pollock, President of the Institute
of Mechanical Engineers
The talent gapSource: Your Loss: How to Win Back your Female Talent, 2010
30
Special feature out of the zone
I n the Autumn Statement 2011, HM Treasury said that Enterprise Zones in six assisted areas will qualify
for enhanced capital allowances (ECAs). In these areas (see below) 100% allowances will be available for plant and machinery investment incurred between April 2012 and March 2017.
But are the ECAs encouraging investment? Not all of the six qualifying Enterprise Zones (EZs) have had their ECAs confirmed by the Treasury. But some, like the North Eastern EZ, with two sites, have, and are now at a point where business investment is moving. “We’ve had many enquiries to both expand businesses and relocate within the EZ, from a spectrum that includes companies in advanced manufacturing,” says Paul Woolaston, who sits on the NELEP board. “We can give up to £100m per project on capital allowances.”
as receiving illegal state aid. However, there may be more flexibility on the definition of state aid within EU-assisted areas, where ECAs apply. “EU assisted areas are allowed to offer more state support as they are effectively deemed to be suffering from market failure,” says Mark Ridgway, managing director of Group Rhodes (p54) who sits on the Leeds City Region LEP board. “Additional support for companies in these areas levels the playing field and does not interfere with competition, so goes the theory.”
Some consider that the two types of relief in these assisted EZs – business rate relief and ECAs – are mutually exclusive. The former, for sums up to £225,000, are suitable for SMEs and the latter targets bigger companies and investments. ECAs therefore need a large, anchor investment, which is why allowances up to £100m are being offered per project in the NELEP.
But if the large scale investment – for example, the regeneration of Queen Elizabeth Docks in Hull – needs a further government financial incentive to get going, this may affect the status of ECAs as state aid. “Will ECAs be considered in that total calculation of state aid for these Zones, or be exempt?” asks Lowther. “Until these rules are explained, no-one will make any commitments.”
See The Last Word (p100) for more on HMT’s Enterprise Zone approach to capital allowances.
Out of the zone
But there is a sense of frustration among the administrators of other Enterprise Zones. Some are waiting for approval of both ECAs and other, basic benefits of EZs like business rate relief and simpler planning rules. “The benefits are well known on paper, but we don’t have approval on all benefits nor the mechanisms for delivering them,” says Richard Lowther at Hull City Council, which is operating the two EZs in the Humber region. The benefits, due to kick-in on April 1, will not be ratified by Parliament until June leaving risk averse companies unwilling to tie business plans to EZ benefits.
The holdup in Parliament is partly due to the definition of state aid in EZs.
Companies are not normally eligible for both business rate relief and ECAs. HM Treasury says it is unaffordable, but also Brussels might take a dim view of businesses that getting both
Enterprise Zone with ECA
100% ECA confirmed EZ benefits clarified
Black Country No comment No comment
Humber No – but confident it will receive full ECA due to wind energy
No – but decision to confirm benefits ‘imminent’ (Feb 17)
Liverpool No No – Mersey Waters EZ has two parts; Wirrall Waters has planning permission, Liverpool Waters does not
North Eastern Yes Yes – lack of detail on benefits not a hindrance
Sheffield Barnsley cluster – NoSheffield/Rotherham – YesMarkham Vale – Yes
No – waiting for more details on specific benefits following April 1st EZ ‘launch’
Tees Valley The LEP says its a formality Waiting for ratification of all benefits
EU assisted Enterprise Zones offer lots of benefits, but lack of clarity on the delivery mechanisms and whether or not 100% capital allowances will qualify for state aid means there are few signs of business investment yet. Will Stirling asks if Enterprise Zones can work for manufacturers.
Status of Enhanced Capital Allowances and other benefits in ECA-eligible
Enterprise Zones
D espite good intentions on the parts of many, a recent survey by the UK Federation of
Small Businesses (FSB) revealed that 73% of UK businesses were paid late in 2010/11 with the average SME being owed £27,000 at any one time.
A new EU directive (2011/7/EU) is due to be implemented in 2013 to address this challenge by ensuring private companies settle their invoices within 60 days. Article 7 of the directive states that a buyer cannot alter the date or period for payment, ask the supplier to waive the late payment penalty rate of interest or indemnify themselves against supplier payment recovery costs.
Ed Davey, in his previous role of UK Business Minister, stated that the UK Government will implement the new directive ahead of the 2013 deadline, by mid-2012. The UK Government’s interpretation may allow suppliers to charge interest
on time but additional pressures are mounting. A Treasury survey by GTNews stated that nearly 50% of large UK corporate financial leaders are more likely to extend supplier payment terms now than 12 months ago.
Over 50% of the respondents intend to reduce the number of debtor days on their own outstanding payments in 2012. This increasing tension between reducing day’s sales outstanding (DSO) while increasing day’s payables outstanding (DPO) indicates that more companies, irrespective of size, are concerned about cash-flow and liquidity.
The FSBs 2011 survey showed that 56% of its members had written-off invoices worth between £1 and £9,999 because of non-payment and the manufacturing industry was highlighted as the worst culprit for late-payment.
Electronic invoicing is a key initiative to ensure invoices are paid on time. Automating the process allows for transparency and simplification, and the financial rewards of e-invoicing help to reduce processing costs from around €17.60 to €6.70 (Billentis, 2010) - a 62% saving per invoice processed.
Processing invoices promptly and having payables information in ERP systems quickly allows treasurers to make informed decisions about payment timing. Early payment discounts which represent a high-yield net return compared to extending DPO can help prioritise these payments.
For now it seems many manufacturing companies have their work cut out in removing a reputation as poor payers, in the UK at least. However, there is significant interest in the opportunity of electronic invoicing within industry groups like Odette and EDIFICE, which demonstrates that manufacturers are beginning to embrace the benefits of e-invoicing both for their own company and for their suppliers too.
Cash flow is vital for any company, especially so for SMEs. Yet selling on credit and getting paid on time became such a widespread challenge in Europe that in 2000 the
European Union issued a directive giving suppliers legal rights to charge interest on outstanding payments. Nigel Taylor, head of e-invoicing at cloud transaction service provider GXS, reports on plans to update this directive.
on payments made after the 60 day period at 8% above LIBOR alongside a £35 late payment fee. If debt recovery services are required, the debtor will also have to reimburse the recovery costs incurred by the supplier.
The current UK Business Minister, Mark Prisk, has reiterated his predecessor’s intentions and as part of a “financial fitness” campaign has encouraged SMEs to:
Proactively agree payment terms before delivering orders
Sign-up to the Government’s Prompt Payment Code
Raise complaints over late payment to help companies pursue late payers
Use electronic invoicing where possible, to automate the process, with instant transfer of the invoice combined with instant verification from the customer that the invoice has been received.
Large companies may be under greater pressure to pay bills
31
regulation Update: Late Payments Directive
Late Payments Directive: Keep cash flowing The UK Government’s interpretation may
allow suppliers to charge interest on payments made after the 60 day period at 8% above LIBOR alongside a £35 late payment fee
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For SMEs in particular though, complex
employment regulation weakens
the ability of employers to
work with their employees in a flexible and efficient way
T he Department for Business Innovation and Skills, has confirmed that changes to the Parental
Leave Directive have now been deferred by a year and will come into force in March 2013. The deferral is due to a delay in the outcomes of a BIS consultation on Modern Workplaces but these are due in the next few months.
The status quoThe current Parental Leave Directive was introduced in 2010 as a Europe-wide initiative to allow both parents to take time away from work in a child’s early years. The directive currently gives parents the right to thirteen weeks of flexible, unpaid, parental leave per child, with the following conditions:
Leave is per parent and non-transferable, so each parent has a separate three month period which they cannot swap
The leave must be taken in blocks of a week, no more than four weeks per year
Workers must be employed for at least one year to qualify
There are special provisions for parents of disabled children and for adopting parents, and the directive only specifies minimum requirements, so it is left to individual employers to extend the leave periods or decide whether the leave is paid or unpaid.
explores ways of encouraging the sharing of childcare more equally between parents by allowing them to determine their own balance between employment and childcare.
For SMEs in particular though, complex employment regulation weakens the ability of employers to work with their employees in a flexible and efficient way. Administering the regulations is difficult, with many businesses being too small to have their own HR professionals. This tends to result in SMEs trying to ‘wing it’, risking employment claims, or in them having to buy in potentially expensive consultancy. So, on the one hand we have the Prime Minister saying that he wants to change the culture of regulation in Whitehall, on the other hand we see a regulatory roadmap which directly contradicts this aim.
In its response to the Modern Workplaces consultation, the Institute of Directors commented: “Further regulation of employers, imposing more costs and burdens, should be a last resort after non-legislative options have been explored, rather than the first tool reached for.”
This is a feeling commonly expressed by business leaders alongside a call for more joined up thinking from Government – a call which Carpenter Box actively supports, both on its own behalf and for those we work with.
LeaveThe futureThe revised Parental Leave Directive, which will now come into force in March 2013, is aimed at providing a better balance between work and family life by allowing parents to transfer the leave to each other, and will:
Extend the period of flexible leave to eighteen weeks per parent per child in all cases, stipulating that four weeks of the period is to be non-transferable
Give parents returning from parental leave the right to request, for a limited period, changes to their working hours or patterns
The directive is aimed to catch all, so the right to parental leave applies to all employees including part-time, contract and agency workers. Employees who request such parental leave will be protected from being disciplined or discriminated against for making any requests and must be given back their job, or an equivalent one, when they return.
The impactOn the positive side employers can breathe easier for the fact that they have an extra year to prepare for the administration of another layer of employment regulation. The negative is that the Modern Workplace consultation is likely to result in yet more regulation in 2015, as the Government
33
regulation Update: Parental Leave Directive
Parental
Directive
Delays to changes for parental leave are simply postponing the opening of the flood gates says Chris Coopey, ex-engineer and partner at Carpenter Box LLP.
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Specialfeature ANT Telecom
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An opaque system
Aside from arguments as to the potential of NI reform for job retention and creation in the UK there is a bigger issue of obfuscation in NI collection which several contributors and information sources for this article were keen to highlight.
“NI gets politically spun as ‘good for you’ because the public think, incorrectly, that it goes to save for their state pensions or pay for the NHS,” explains Jonathan Duck, MD of Amtico, while Andrew Churchill, MD of JJ Churchill, states, “with National Insurance no longer being hypothecated directly towards health and benefits, its continued existence alongside income tax and VAT merely makes the UK tax system more opaque than it needs to be.”
For greater transparency Mr Churchill says, “I would like to see a complete tax overhaul, with NI and income tax being rolled together so that the true costs are more evident.”
But while Mr Churchill considers it possible that government would address such a proposal in the mid-term future, Mr Duck is less optimistic. “There are none so deaf as those who don’t hear,” he comments.
36
at the potential benefits and feasibility of altering some aspects of National Insurance?
International positionSpeaking with David Jervis, partner at the law firm Eversheds, it seems that there is a significant will to do so on the part of industry. “I am aware of a groundswell of opinion that revisiting the level of employer contributions, or considering some exemptions for the contributions due for new employees, would be a means of removing an impediment to growth,” he comments.
Employer contributions for National Insurance now stand at 13.8%. Alongside other employer costs this is forming a significant deterrent to job retention and creation in many quarters claims Mr Jervis: “The
A taxingquestion
The Autumn Statement in 2011 primed industry for details on ‘above the line’ R&D tax relief and the introduction of the Patent Box, due in the Budget in late March 2012. These tax adjustments are designed to help industry grow in the UK, but do they side-step a much more direct route to economic recovery and the reduction of unemployment?
investigates the constraining effects of employer National Insurance contributions.
N ational Insurance is the second largest tax in the UK, exceeded in the
revenues it brings to government only by Income Tax. In the year to March 2011, National Insurance contributions from employees and employers totalled a stonking £99 billion.
Given how lucrative National Insurance is for government, and how heavily the UK now relies on government spending, it is unsurprising that past calls for reductions or exemptions to the tax have been batted aside without serious consideration – Government spending now accounts for around 50% of the UK economy.
But as British unemployment soars alongside expectations for a private sector-led recovery, is it time to take a closer look
I am aware of a groundswell of opinion that revisiting the level of employer contributions, or considering some exemptions for the contributions due for new employees, would be a means of removing an impediment to growth
David Jervis, Partner, Eversheds
Specialfeature
37
problem is particularly acute for SMEs, but even our corporate clients cite concerns. For corporate firms these concerns are often cited alongside the 50 per cent tax rate. I have seen the UK avoided by firms looking to place certain aspects of their operations which are flexible as to location.”
Jonathon Duck, CEO of flooring manufacturer, Amtico has been bitten by this perception of the UK as a high tax jurisdiction in the past and has some clear cut views on the actions which should be taken by government to keep top talent in the UK and encourage employment growth.
“The week the 50 per cent income tax rate came in half my board moved overseas. I’m not a hedge fund. I am a bog-standard plastics processor, but if you make it difficult to have top jobs in the UK then they will leave and invariably they will drag the next level of jobs with them.”
And difficulties posed by National insurance, in addition to high income tax rates, are considerable. It’s not just about salary. Employee benefits like company cars are also subject to employer National Insurance contributions, though at a lower rate and, according to Jervis, this can lead to cat and mouse negotiations around top jobs as employers seek to arrange salary sacrifices in exchange for a range of lower tax employee benefits.
Duck is frustrated. “Keeping employer National Insurance contributions high is an incredibly stupid thing to do if you are trying to build employment and economic health,” he states. “Once the top and middle jobs go abroad, the avalanche loss of ‘normal’ jobs is inevitable.
“This doesn’t impact parts of the service sector so heavily since your restaurant waiter must be in the UK in order to serve you and you can’t import a haircut,” continues Duck. “But high NI actively undermines manufacturing in the UK, both for companies exporting and for those wanting to provide locally manufactured substitutes to imports. Current policy is violently anti-manufacturing and internationally uncompetitive.”
Job creationThe above evidence and comments certainly suggest that current levels of NI are making it difficult to safeguard jobs and may be adding to unemployment figures. But what about the potential of incentivising job creation through adjustments to employer NI?
The Federation of Small Businesses (FSB) believes there is huge potential for stimulating job creation across the UKs important SME base through a system of reductions to employer NI contributions.
In 2011 FSB lobbied government to act. Surveying 2000 UK SMEs FSB found that 44.1% claimed they would take on more staff if employer NI contributions were cut and a further 19% of small businesses said that they would do so within the next 12 months in order to meet
growth objectives. For FSB this is a particularly critical issue for small firms – a segment of the British economy which it believes could be leveraged far more effectively for economic growth, and for an agile economy of entrepreneurial and flexible businesses (p16 for more on manufacturing entrepreneurs).
At present the average small business in the UK employs just 4.54 staff – just a quarter of the size of small firms in the USA where the average is 16.1 employees. FSB has created a target to push the UK average up to six full time employees and has assured government that, although creating exemptions for employer NI contributions in existing small businesses would reduce government income on the one hand, this reduction would be more than covered by a surge of job creation and therefore increased income tax and employee NI.
FSB calculates that, on an average weekly salary of £489, one employee would still contribute £5,958.48 to the Treasury, or £17,875.41 for three employees. In the same instance – if these roles were newly created and exempt from employer NI – a cost barrier of
£2,522.62 per employee would be removed.
Furthermore, although FSB is supportive of a ‘National Insurance Holiday’ given to start up businesses setting up between June 2010 and September 2013, it says that there would be greater security for tax revenues in extending the scheme to existing businesses. For while around half of start ups fail in their first four years, established small businesses with growth ambitions are in a far better position to offer sustainable jobs, and tax revenues.
But does FSBs argument for NI reform extend beyond the very small end of the business scale?
Andrew Churchill, MD of JJ Churchill is equivocal on the matter. Mr Churchill runs an SME supplying machined parts to the aerospace and defence, power generation and industrial sectors. With a workforce of 120 based in the Leicestershire town of Market Bosworth he says: “National Insurance is a tax on employment and I would welcome a reduction.”
“However,” he continues, “In and of itself a reduction in NI would not make me take on more staff. It would help cash flow. But I have the people I need.”
A taxing question
Keeping employer National Insurance contributions high is an incredibly stupid thing to do if you are trying to build employment and economic health
Jonathan Duck, MD, Amtico
National Insurance is a tax on employment and I would welcome a reduction
Andrew Churchill, MD, JJ Churchill
2011 British exports to China worth £8.8 billion There are 22 Chinese consumers for every one in British. This is why everyone is encouraging UK manufacturers to sell to China. And everyone knows China’s growth rate forecast for 2012 is 8.5%.
Quite natural then, for politicians and quangoes to exhort, push, and cheer exporters into China. But as, usual, saying is easier than doing and the road is not smooth for manufacturers who must swallow upfront market entry costs, and take risks on market entry, payment, and intellectual property exposure.
According to HMRC’s uktradeinfo.com the actual figure for British goods exports to China during 2011 totalled £8,772,567,740. This is a healthy increase on the £7.23bn
Following ’s focus on export opportunities in China last month Anthony Shepherd, founder of Shepherd International, responds in a bid to crunch the data on opportunities
in China and highlight the wealth of professional help available to companies with export intentions, outside government bodies.
Export focus: ChinaIn response
38
markets in China’s 23 provinces to be assured of their real proportions.
Choices of support and expertise in UK for researching and testing Chinese markets, and making deals don’t stop at UKTI and CBBC. The expertise of many more private commercial Chinese business organisations are open to manufacturers. Another choice is to trade via Hong Kong – lower risk for sourcing or exporting.
Online Chinese marketing and search advertising for UK manufacturers on Baidu is also now possible through baiduint.com which is online in English. China’s leading search engine, Baidu has 83% of the market and 1 billion hits daily. Mandarin-speaking YinTong Betser of ActiveUKChina in London observes: “We don’t see ourselves as competing with CBBC, as we are price competitive, more adaptable, and flexible without their overheads.” Other China specialists in the UK offering support to manufacturers include:
www.ChinaBusinessSolutions.com, 01223 421968 www.chinabusinessservices.com, 0207 253 4590 www.activeukchina.com, 0208 372 7269 www.grant-thornton.co.uk, Grant Thornton China Services Group, 0207 7282691 www.marcltd.com Manufacturing and Retail Corporation, 01227 459 999 www.pwc.co.uk, PwC Emerging Markets 0207 213 2232www.HKTDC.com Hong Kong Trade Development Council, 0207 616 9502
In response - export focus: China
China, IP, and Sir James Dyson
Manufacturers still risk technology copying and breaches of IP in China. Our Government is working with Chinese counterparts to reduce the problem. But meantime, global brands like Apple are compromised. The BBC reported in July 2011 that Chinese government officials investigated five fake retail outlets posing as licensed Apple Stores in Kunming. Staff understood they were working for the real US Apple brand.
According to the Guardian in December 2011, Dyson, producer of vacuum cleaners and bladeless fans, placed a private detective in one factory to obtain photographic evidence of counterfeiting. It is pursuing 20 design or patent cases around the world, many of them related to the sale of products made in China and has spent £1.9m on legal fees.
achieved in 2010. But amid all the gung-ho optimism, it helps to look at reality, and what exactly UK sells into China, in order to decide whether to invest. Another vital issue is whose specialist market entry support to use.
What uk really sold to China in 2011Some surprises. At first sight of the table (right), one goods category stands out. Scrap.
China purchased at least £1618m of UK’s scrap and waste materials to fuel its voracious industrial appetite. This means around 20% of our exports are scrap or recycled materials.
This clearly shows that simple headline figures for UK exports to China blur the reality of opportunity for UK products and manufacturers need to be careful when researching and testing the
Top UK Exports to China 2011 £m
Vehicles total 2044
Passenger cars over 3000cc 1447
Machinery/mechanical total 1466
Pharmaceuticals 635
Scrap copper 628
Precision instruments 459
Scrap paper 359
Jet engines and gas turbines 283
Scrap of precious metals 221
Scrap of steel, iron, ferrous 196
Plastic products including scrap 193
Scrap and waste plastic 59
Aircraft 160
Hides, skins, leather 136
Scrap- aluminium 155
Diesel engines 152
Taps, cocks, valves etc 84
Pumps for liquids 69
Drinks, incl whisky 78
Whisky 59
Fish, crustaceans, molluscs 42
Petrol engines 38
Source HMRC Uktradeinfo.com
39
r egardless of how faltering the road to economic recovery, the UK’s manufacturing sector is likely to rely increasingly on exports to sustain growth.
Indeed, a survey commissioned last year by RBS entitled Business Export Research found that 19% of UK manufacturers anticipate significant increases in export activity over the coming five years, against an average of 8% across all sectors. Soundings we’ve taken from customers at RBS suggest that a larger proportion of UK manufacturers anticipate exports to China to increase even more over the coming five years.
But almost half (46%) of those manufacturers say difficulty finding international customers presents a barrier to successful exporting. And since nearly three in five (57%) expect trading with Asia to become more important, activity and know-how must be improved to satisfy these markets.
That means understanding which activities represent opportunities for significant business growth. UK exports to China grew by an annual average of nearly 18% between 2003 and 2010, and more than 20% in 2011 according to HM Revenue & Customs.
But ONS/IMF data indicate that, as a share of our total export trade, China makes up just 2% of UK exports. With Chinese GDP forecast to grow at an average of 9.4% between 2011 and 2016, China is a market that UK manufacturers must stay in tune with.
Made in Britain: a marque of distinctionFor many Chinese customers, traditional hallmarks of British manufacturing – such as quality, reliability and service – underpin the appeal of UK-made products.
“British manufacturers enjoy a positive reputation for design, technology and production innovation,” says Alastair Morgan, Consul General at the Guangzhou branch of UK Trade & Investment (UKTI), the government body promoting UK plc overseas.
“Their business ethics and the high standards of support and aftercare are greatly admired.”
Such high regard is what makes China so appealing to UK exporters who initially fear being priced out the market. Vince Cunningham, a Business Adviser at the China-Britain Business Council (CBBC), which assists UK-registered companies trading within China, says, “It’s not unusual for UK manufacturers to explore markets for, say, automotive equipment, industrial machinery or building materials, and discover similar products being made in China at lower prices. But that needn’t cut them out; their products may well still be highly sought-after.”
Be bold and focusedBut is British reserve holding back our potential? “There’s a reticence among many UK exporters,” says Morgan. “They need to promote their products’ USPs more vigorously and widely.”
Cunningham believes the most successful British exporters to China are those who take time to understand their customers’ often highly specific needs. “Research thoroughly, focusing on specific demands you know you can meet, or which could be met by refining existing products. It doesn’t matter if you produce nuclear power plant valves, flight simulator testing kits or shower unit brackets; if it has something special, there’s likely to be a market here.”
Many UK firms have established production facilities and supply chains in China. Janet Ming, head of the China desk at RBS in London, says, “The government encourages foreign investment; they’re incredibly keen to meet British manufacturers and provide them with support to facilitate investment in property, plant and jobs, such as securing planning permission or trading licences.”
untapped potential: growth opportunities for SMes and MSBs Both UKTI and CBBC are highly proactive in China, helping British companies with information and, crucially, introductions to all the right people. These well-developed support structures means successful trade with China is by no means the preserve of large multinational manufacturers. SMEs and mid-sized businesses (MSBs) are increasingly capitalising on export opportunities. Recently, a British firm making machine tools for the diamond industry displaced a Swiss competitor as top exporter to China in its field. “It was a classic case of UK manufacturing entrepreneurship,” recalls Morgan. “Senior management came over; they met potential customers, they took on board what they’d need to do to fine-tune those products which had generated the most interest, and they identified a local distributor they could trust.”
He continues, “We’d like to see more SMEs and MSBs make similar inroads. Yes, they might have fewer resources to dedicate to finding markets in China, especially if they’re struggling to protect existing UK business. But for many, they can’t
Specialfeature RBS
Access all areas Peter russell, head of manufacturing, UK Sector Coverage, at Royal Bank of Scotland, considers how British firms might access or increase their share of attractive Chinese export markets.
40
Where to? Which sub-sectors? Why here?
1 Guizhou Chemicals Pharmaceuticals Medical equipment Hydroelectric energy Coal power Bauxite mining Construction
Targeted to double GDP by 2016 1200km expressway under construction Ambitions as major tourism region
2 Yunnan Healthcare equipment Life sciences Road-building Rail
Strategic gateway to SE Asia RMB10bn investment in rail for next five years RMB2.5m budget for buying healthcare equipment and building hospitals
3 Gansu Aviation High-tech Oil refining Nuclear fuel Wind and solar energy
Key hub, the focus of domestic and international flight expansion Designated economic and technology development zone
4 Jiangxi Timber and bamboo production equipment Automotive Minerals and natural resources Agriculture
Major producers of rice and freshwater products Three waterworks and renewable energy planned
5 Guangxi Aviation Renewable energy Automotive
GDP doubled between 2005 and 2010 Main hub for expanding sea links with SE Asia General Motors manufacturing plant (joint venture with Shanghai-based maker)
6 Xinjiang Natural gas, oil and coal production Rail Urban
Gateway to Tibet Contains 90% of China’s lithium, potassium and magnesium reserves Airport terminal and runway construction
7 Qinghai Food Non-ferrous metals and chemicals Biochemicals Hydroelectric energy
Designated economic and technology development zone Accelerated dam-building programme (12 over coming decade)
1 Guizhou
2 Yunnan
3 Gansu
4 Jiangxi
5 Guangxi
6 Xinjiang
7 Qinghai
1
2
3
4
5
6
7
Source: UKTI, CBBC, Centre for International Business at University of Leeds
Go east,then West
Export and production growth opportunities in China’s
emerging regions: -sector snapshot of the last five years
41
afford not to at least take soundings.” Reassuringly he adds, “Thorough research and a well-planned reconnaissance trip, including UKTI support and introductions, can turn a tentative foray into a solid platform from which to grow business here. We see it happening all the time.”
Pinpointing strategic high-demand locationsUK exports to China may have been growing but the potential market for goods made or designed in Britain isn’t confined to indigenous companies. There are many foreign-owned organisations established in China, some (including British firms) operating under their own steam, others acting in joint ventures with Chinese private sector investors, from makers of FMCG goods to those producing plant equipment or luxury garments.
“The speed at which the economy is growing and the increasing affluence and sophistication of the middle-class population means no one field of manufacturing can be singled out as the number one opportunity,” says Morgan. “But I’d suggest that the automotive, food and drink, precision engineering, healthcare, pharmaceuticals, high-speed rail and ICT sub-sectors will be amongst the fastest-growing over the coming five years.”
Many UK manufacturers already enjoy brisk business exporting to China’s developed urban eastern and coastal cities. But new regional opportunities are emerging in providences that up until now have been less explored.
The western and south-western provinces are the upcoming hotspots that are set to deliver significant growth opportunities within certain sub-sectors over the next five years. From aviation and high-tech in Gansu providence, healthcare equipment and life sciences in Yunnan to renewable energy in Guangxi, these represent just some of the opportunities with tremendous potential for UK manufacturers. (For full details on upcoming growth opportunities, see map)
Few quick wins but plenty of sustainable businessAn enormous infrastructure programme is also opening doors. “China is building roads, airports and rail networks, linking its second-tier and third-tier cities, many of which are becoming specialist manufacturing centres,” says Janet Ming. An increasingly affluent population means these regions represent lucrative markets for exporters of everything from components and equipment to food, drink and fashion, already being snapped up in China’s eastern conurbations.
“For forward-thinking UK companies, there are plenty of opportunities to carve out niches,’ says Ming. But she warns, ‘There are rarely quick wins to be had. Be prepared for the long run, building a solid foundation by talking to the right people and demonstrating your commitment to a demanding customer base.”
To find out more about how RBS can support your Chinese export trade, contact: Peter Russell, Head of Manufacturing, UK sector coverage Tel: +44 (0)20 7672 1007Email: [email protected]
Target China: A checklist for UK manufacturers
Identify your USPs: Determine which products will appeal most to Chinese customers, including changes that might be necessary.
Tap into your warm leads: If your UK customers already operate in China, capitalise on your knowledge of their business; ask if they’ll make introductions for you.
Check your Chinese competitors: Foreign competitors may be known quantities but don’t ignore domestic rivals, many of which are growing rapidly.
Refine your sales and marketing tactics: Ensure your strategy is targeted specifically at Chinese customers.
Be there, be visible: Invest management time and energy; consider partnering with symbiotic Chinese companies.
Specialfeature RBS
For in-country connections and advice from UK Trade & Investment (UKTI), contact: Alastair Morgan, HM Consul-General Tel: +86 20 8314 3019Email: [email protected]
For access to key decision-makers via the China-Britain Business Council (CBBC), contact: Vince Cunningham, Sector Lead, Manufacturing & Engineering Tel: +44 (0)20 7672 1007Email: [email protected]
42
N ot many manufacturers are ‘cool’, but thanks to its sub-zero production temperatures and marketing tactics, ice cream maker Fredericks Dairies is in a
position to stake such a claim.“We believe that ice cream should be exciting,”
says Fredericks Dairies financial director Neil Murgatroyd. “But for too long it has been strangled by drab merchandising and a poverty of imagination. Our aim is to liberate customers from ordinary ice cream one lick at a time and give people the wow factor when they think of frozen confectionery.”
But while a string of playful marketing initiatives (such as a branded amphibious ice cream van on the Thames and a poster campaign featuring a pregnant nun) highlight this approach, they belie a hard-nosed business strategy. For, thanks to targeted product diversification, Fredericks is succeeding in a competitive market dominated by large multinational rivals and is constantly looking at new ways to increase its UK ice cream sales. The Lancashire-based concern has also become the only manufacturer of ice creams to supply the caterers at the London 2012 Olympic and Paralympic Games.Murgatroyd explains: “Our business is in a constant state of flux and we’re always reinventing and remoulding ourselves for the next challenge, hungry for new ideas, opportunities and growth.”
Licences to thrillAt its Skelmersdale factory and Kirkby distribution centre, Fredericks currently employs 200 people and saw a £39 million turnover in 2010. It makes a variety of ice creams on seven production lines, fitting different consumer niches with unusual
flavours such as its award-winning Golden Syrup, Refresher sweets and Candy Floss products.
In addition to supplying in-house brands, including Sainsbury’s Basics, Fredericks has the licences to sell products under the Cadbury, Del Monte, Lyles, Refreshers and Vimto labels as well as Antonio Frederici, its own luxury ice cream. The company began this type of branding in 1988, when it revolutionised the ice cream world by creating the Mars ice cream bar. Fredericks no longer holds the licence for Mars but produces another classic, the Cadbury Flake 99, which is now considerably larger.
Such licensing deals with high profile brands give many of Fredericks’ products immediate customer familiarity. This is a substantial cost saving operation compared to developing a new brand image from scratch and in return Fredericks pays sales-based royalties.
“Cadbury is an amazing brand to be associated with because of its history with the British public,” confirms Murgatroyd. “On top of this, when it became a tier-two sponsor of the Olympics, this now means Cadbury ice creams manufactured by us will be the only ice creams sold in the Olympic
goldGoing for
When working with frozen goods,
you can’t simply stop the production line at will. All the
produce will go to waste
Neil Murgatroyd, Financial Director, Frederick’s Dairies
This Lancashire ice cream maker has scooped awards and will be supplying Cadbury with Icecream for the London 2012 Olympic & Paralympic Games. By John Silcox
The ingredients used to make ice cream are
mixed together in enormous vats
Have your say at www.themanufacturer.com
Specialfeature Fredericks Dairies
43
venues, as well as being the only offering in the frozen foods aisle of retailers allowed to display Olympic logos!”
Fredericks has invested over £800k in special mobile selling equipment for catering teams to use at this summers events. As well as putting the company’s ice creams on a global stage, these investments will play a further role in Fredericks’ bid to increase its event-based sales. At the moment this is a market it has very little exposure to, but Murgatroyd sees a future where Fredericks’ products are eaten at football matches, concerts and festivals.
Without a large marketing budget, Fredericks relies heavily on alternative publicity to drive sales. Expensive mainstream advertising campaigns are out of the question, so the business organises relatively cost-effective publicity stunts that have gained national and regional press coverage (such as the worlds first amphibious ice cream van, the Flake 99 roller coaster challenge and celebrity shaped ice lollies). To promote its Antoni Frederici brand, Fredericks ran a campaign involving racy images featuring clergy and by being banned, the images drew a wide media exposure.
£5.2m warehouse expansionContrary to the advertising strategy, Murgatroyd explains that no scrimping happens when it comes to the up-keep of the £20 million worth of machinery in the factory. Recently, Fredericks replaced a £200,000 packaging unit on one production line to make sure it was reliable and it is also expanding its cold storage more than two-fold, by building a £5.2 million warehouse extension.
“When working with frozen goods, you can’t simply stop the production line at will,” he says. “All the produce will go to waste, so all our factory machinery is regularly updated and replaced.
Fredericks has banked with RBS for many years, “the bank
Fredericks is a great
company to do business with and it’s
always exciting to visit their
headquarters to discuss
their goals and aspirations
Liz Flynn, Relationship
Director, Lombardtakes a proper interest in our business and always ask really pertinent questions when touring the factory to try and gain as much information about our way of working. RBS understands our sector and visits us regularly. We are lucky to have such a good long-standing relationship.”
Relationship director Liz Flynn from Lombard, part of RBS Group, adds: “Capital investments are essential for companies to grow. Fredericks is a great company to do business with and it’s always exciting to visit their headquarters to discuss their goals and aspirations.”
RBS relationship director James Leipnik echoes this sentiment: “Through effective dialogue we have a strong understanding of Fredericks’ business objectives. This company has great growth potential and we wish them well in 2012.”
Today’s work is very different to the company’s humble beginnings as a one-man door-to-door ice cream sales operation. In 1895, Antonio Frederici, grandfather of current owners Frank and Phillip Frederick, brought his passion for ice cream over to the North West of England from the Italian Riviera and set up business.
Murgatroyd isn’t quite sure what Antonio would say and adds: “He would probably think we were insane if he heard about us making a ‘Hoff iced lolly’ in the shape of David Hasselhoff and getting the Baywatch star involved too. But it works!”
The world’s first amphibious ice
cream van made the cover of The Sun newspaper
Have your say at www.themanufacturer.com44
eeFInsight
2 011 was a challenging year for manufacturers, especially as the eurozone crisis intensified. However, if you ask UK manufacturers about
their individual prospects for 2012 most express cautious optimism. Strength in demand from markets outside of Europe is expected to continue. Opportunities for developing service offerings around their products have also been identified.
What data we have seen in the New Year suggests that the sector may slowly have started to turn a corner, with output expanding in December 2011 and January 2012 promising similar production results.
So, while commentary in the media focusses on the ongoing challenges in our major markets across the channel, manufacturers themselves, while not discounting this, appear to be getting on with the business of finding new ways to grow their companies. One means to this end however, is the Research & Development (R&D) tax relief scheme, which despite having been around for over a decade is often overlooked.
r&D tax relief schemesIntroduced in 2000, primarily for SMEs, this is a tax incentive that reduces a company’s corporation tax liability by enhancing its tax deductible expenditure. The resulting tax benefit can take various forms including a refund of tax liability, cash credit (currently up to £24.5 for every £100 of qualifying spend) and tax losses, all of which are valuable monetary assets.
With a subsequent addition of a similar scheme for large companies, the two schemes have evolved significantly over the first decade of this century.
To qualify for relief, companies need to undertake projects that consist of activities that are aimed at achieving technological advances by resolving technological difficulties, through a systematic and investigative approach.
The table below shows a list of typical qualifying activities that can be considered for relief in three of the most common disciplines (see table).
HMrCCompanies may have various experiences in dealing with the tax authorities. What is slightly different and interesting to note in the R&D tax sphere is that HMRC is encouraged to provide support to qualifying companies.
R&D tax claims made by SMEs are primarily dealt with by seven specialist units within HMRC, which also provide support to tax inspectors who handle large company tax affairs. Having the ability to navigate the relevant tax legislation and communicate with HMRC effectively is paramount to a claim’s success.
For further information please contact Suzie Dennis [email protected].
Wen Zheng is a mechanical engineering consultant at Leyton, an international group with 15 years global
experience in processing R&D tax claims. But Zheng is concerned that only a relatively small number of manufacturers still take advantage of this support. Here she raises awareness.
R&Dtax relief
When the credit crunch hit the UK, government introduced further enhancement to support SMEs by increasing the enhanced spending percentage to 225%. Similarly, to recognise large company contribution to the economy, an above the line tax credit similar to that of the cash credit for SMEs will be introduced from 2013.
Does my company qualify?For many companies, the schemes can offer significant financial benefits. But access needs to be demystifyed.
Many manufacturing companies believe that R&D activities are undertaken by people in white coats working in laboratories, or only include design and development of revolutionary products. While this traditional view of R&D is no doubt representative of some qualifying activities for R&D tax relief, it is by no means a comprehensive view.
To understand R&D from a taxman’s perspective, businesses need to grasp a key premise of the schemes. The tax incentive is designed to reward efforts to improve know-how, not necessarily only products.
Discipline Examples of qualifying activities
Mechanical engineering
Creating a new product Enhancements of an existing product Tricky tool design for product manufacture Production line automation or development to be
more energy efficient or reduce waste
Electronics engineering
Design of new energy efficient products to reduce power loss
Integration of different wireless systems Development of new design procedures and
complex automated scripting to improve functionalities
Software engineering
Development of a complex web based database management system
Improve speed, security and bandwidth Software design to automate a
manufacturing process
45
Founded in 1985 by Lean Guru MasaakiImai, the Kaizen Institute can trace its DNAback to the Japanese founding fathers ofthe Toyota Production System.In the UK, we focus our consultancy andtraining on ‘helping you, to help yourself’.Through Knowledge transfer we helpempower your people to understand the
‘Why’ and not just the ‘How’ about Leanand Kaizen , leading to that vital ingredient– sustainable improvement.Through its renowned Kaizen Collegeprogrammes, your people can learn forthemselves, through class room learningand practical ‘hands-on’ at the Gemba.
Upcoming courses for 2012 include:
For full details on all courses:Call us on: 01332 638114
Web: www.uk.kaizen.com/trainingEmail: [email protected]
The Kaizen Institute is a global organisationwhich provides consulting services & training to companies worldwide.
Introduction to Total Productive MaintenancePractical application of TPM on a live asset
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Introduction to Lean & KaizenOverview of Lean & Kaizen methodology(includes best practice visit)
4 days
5 days
4 days14th May24th Sept5th Nov
15th Oct
16th April8th Oct
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Coca-Cola Enterprises,
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Venue TBC
Total Service ManagementImplementing Kaizen within the office functions
3 days11th June Venue TBC
How muchare you worth?We’re delighted to announce the launch of our 2012 salary survey.
This year’s survey was our most extensive to date and includes the results from our employer questionnaire, which saw over 75% of respondents anticipating to pay bonuses or salary increases in the next 12 months.
For even more juicy insights like this, or to benchmark salaries within your organisation, download your free copy now at: www.michaelpage.co.uk/manufacturing
For further information about our survey or for salary data bespoke to your organisation, call Andrew Pownall on 020 7269 2174 or email:[email protected]
Specialists in Engineering & Manufacturing Recruitment161 offices in 33 countries | www.michaelpage.co.uk/manufacturing
Michael Page Engineering & Manufacturing
3
1. How do you expect your employee numbers to
change over the next 12 months?
Highlighting increased confi dence in the sector, over half
of respondents foresee a boost in hiring over the coming
year. Many see employee levels remaining consistent,
while only 16.8% anticipate a decrease in workforce.
In line with this we have also witnessed an increase in
hiring confi dence in our clients, none more so than within
the renewables, health & safety and food & drink sectors.
2. Do you expect to pay bonuses or salary
increases in the next 12 months?
Again, indicating a positive outlook against tricky
economic uncertainty, an overwhelming majority of
respondents anticipate salary and bonus increases
throughout 2012.
Survey results
Remain the same
Increase Decrease
54.4%
28.9%
16.7%
Dont KnowYes No
77.2%
15.8%
7%
Overview
Our clients completed a questionnaire, to help give us an insight into the projected employment trends for 2012
predicted to increase headcount within the next 12 months. In addition, there’s also good news on the salary front,
with a huge 77% of respondents claiming that salaries and bonuses will rise over the coming year.
In diffi cult economic times, it’s heartening to see such confi dence from some of the sector’s leading companies.
In addition, 87.6% of employers in the sector claim that cultural fi t outranks pure technical ability when making hiring
decisions. This comes as no surprise to us here at Michael Page, as we continue to take every measure to ensure we fully
understand the ethos and needs of our clients to fi nd a successful candidate match.
I n October last year the association of businesses known as the Manufacturing Advisory Consortium, or MAC, won the contract from government to take over the
management of the Manufacturing Advisory Service – MAS.
MAC, comprising a partnership between financial services organisation, Grant Thornton, the consultancy Peera, the West Midlands Manufacturing Consortium and MAS South West, bid for control of MAS at a national level following the demise of the Regional Development Agencies and has taken on responsibility for a £57m fund from government.
This public money was pledged to MAS early in 2011 to support its work with SME manufacturers across the UK over three years. But there was some concern from the manufacturing community that the closure of the RDAs, through which MAS was formerly managed, would leave SMEs bereft of a support service which had become widely respected for the improvements it helped to bring about in thousands of companies.
Great expectationsGovernment recognition of the value added by MAS to the UK manufacturing sector came in its decision to centralise control of MAS, and MAC now faces the challenge of meeting government expectations for a return on the money poured in, and the expectations of a manufacturing community exhausted by vacillating government industrial policy and insecurity in the national structures which purport to support and represent them.
Addressing this challenge head on Simon Howes, now area director for MAS in the South West, says: “Hopefully the transition to new management will appear seamless to manufacturers. While some
Jane Gray talks to leaders from the Manufacturing Advisory Consortium about the new structure behind a respected SME support service and learns that despite new administration and focus, continuity of provision has been unshaken.
but the sameDifferent
46
contracts and programmes in place under the old structure technically had to be terminated mid way, continuity in the people on the ground across UK regions means that work has been immediately resumed and no understanding of the challenges involved has been lost.”
Furthermore, Howes assures that “the basic services anyone would recognise from the old MAS will still be available.” The only changes to what is being delivered it seems, come from a new focus on growth as the motivating factor behind every project, and a leveling of the quality of service available nationally.
“We know that not all of the things we wanted delivered, and have delivered in the past, were available universally or to the same level of intensity,” comments Howes. Simon Griffiths, area director for MAS in the North and West England explains further. “When MAS was originally established the remit was to help improve productivity. We have now been tasked with encouraging a focus on growth which brings a slightly different nuance to the way in which programmes are approached. Productivity is still important but we are all about generating more GVA and jobs.”
In practice this has meant MAS acknowledging a criticism leveled at it in the past, that it promoted lean manufacturing too single mindedly. “People have said that with MAS you get lean whether you want it or not,” allows Griffiths. But now this has been addressed and companies can carefully assess with MAS advisors whether they
Read this article to:
Hear from the new administrators of the national Manufacturing Advisory Service on their plans to help uk SMes in the sector
understand what elements of MAS have changed and what will stay the same
Get new contact details and website information for MAS services
We know that not all
of the things we want to deliver and
have delivered in the past
were available universally or to the
same level of intensity
Simon Howes, Area Director, MAS
South West
Specialfeature
47
want to carry out lean focused efficiency and productivity work or whether other approaches centering on strategic business plans, supply chain relationships and new product development are more appropriate.
And the success of these initiatives is not to be a matter for idle speculation. Leaders from MAC will meet monthly with representatives from the Department of Business Innovation and Skills to report on growth metrics.
When it won the MAS contract expectations were announced that MAC would deliver £1.5bn in additional GDP over three years through MAS, as well as safeguarding 50,000 jobs and creating 23,000 more. Progress on living up to these targets will be tracked through project reviews. Senior management in the companies MAS works with are required to approve assessments of the benefits they have gained and sign them off before MAC can report them to BIS.
The MAC members are keen for government to communicate these achievements annually to the public. David Caddle, area director for MAS in London and the South East, confirms. “We will actively encourage BIS to produce an annual report on MAS progress in job creation and GVA generation. It is in our interests to do so.”
Carving the puddingThe division of responsibility for hitting MAS targets and delivering value has been allocated between the MAC partners on a regional basis and some administrative elements have been allotted to particular partners considered to have the strongest specialist knowledge in those areas.
West Midlands Manufacturing Consortium, for example, has been given national responsibility for MAS marketing while Peera is responsible for developing the national framework of events. “It is important to have a lead that creates consistency across core
events like our introductions to kaizen and 5S,” says Griffiths. “Having a lead also means we can avoid duplicating events across regions but use local and regional information to make sure we place sector focused events in the best places.”
This concept of an optimised national back office but a local face for deployment is at the heart of MAS strategy. As such, the new Local Enterprise Partnerships, which are now replacing RDAs across the country, present an interesting challenge and opportunity for MAS.
While there is a great deal of skepticism as to the overall effectiveness of the new LEPs, in some instances they are maturing quickly and proving themselves valuable partners to MAS. In those areas where LEPs are less mature or less aware of the manufacturing activity taking place within their boundaries, Howes says there is an obviously there is a responsibility and opportunity for MAS to highlight the dynamism of the sector – particularly at SME level.
Small but perfectly formedMAS has always been known for its focus on SMEs and this will continue under MAC management. “We don’t exclude large companies from our services,” explains Griffiths. “But we cannot offer them subsidised consultancy as we do with SMEs.”
Furthermore, while MAS has examples of successful work with large companies on local projects, the tools it employs are very much tailored to SME needs, and might not suit a larger organisation.
“The techniques we employ have developed with SME’s in mind and in understanding what that means you have to understand that an SME is not just a scaled down replica of a large company” says Griffiths. They function very differently – one person might hold a number of different management positions, business strategy is rarely formalised and there are no big ERP systems or any significant infrastructure.”
What this implies is that MAS have developed a range of tools and techniques which constructively challenge SME leaders to adopt best practice approaches to business modelling, planning and production efficiency, but in a way that is sensitive to a low level of resource. “We give people process, not solutions,” comments Howes. “Process is far more scalable and when a company has finished working with us, they can apply process again and again to generate continuous benefits.”
To find out more about how MAS might be able to help your business visit www.mymas.org or call the new national helpline on 0845 658 9600.
We will actively
encourage BIS to produce an annual
report on MAS progress in job creation
and GVA generation. It is in our interests
to do so
David Caddle, Area Director, MAS
London
MAS
When MAS was originally established the remit was to help improve productivity. We have now been tasked with encouraging a focus on growth which brings a slightly different nuance to the way in which programmes are approached
Simon Griffiths, Area Director, MAS North and West England
48
Manufacturing may not always have been the best environment in which to see female professional talent shine. But times are changing, and many companies are now finding that their highest flying apprentices are among the gradually swelling ranks of young women entering the industry.
highlights some of Britain’s finest female prodigies showcased during National Apprenticeship Week last month.
femaleof the species
Beth Pickering – Airbus
She started out as an electrical craft apprentice, has since progressed through a higher level apprenticeship and will soon receive a NVQ Level 4 engineering leadership and foundation degree in aeronautical manufacturing. In 2009, Beth was recognised as the Airbus Apprentice of the Year.
Beth speaks of her love of product design lessons at school and how trips to the airport inspired her career choice. “Entering the working world as an apprentice seemed like the perfect solution,” she says.
“During my five years as an Airbus apprentice I have been given the opportunity to participate in a variety of amazing experiences,” Beth continues. “From the ‘Girls can do it’ project aimed at encouraging more women into engineering careers, to the Farnborough Air Show and Futures Day event.”
“I am already looking to further develop myself and my role. I plan to complete a BEng in aeronautical engineering and even progress to a Masters with an ultimate goal of achieving chartered status as a quality engineer.”
THE
Beth Pickering began her career at aircraft manufacturer Airbus in September 2006, after leaving school with 11 GCSE’s.
49
Workforceand skills
Charlotte Curr – Darron SBO
Charlotte Curr has been an apprentice at Darron SBO, a
high precision provider of machining services for the Oil and Gas industry for over three years, starting her apprenticeship career in September 2008.
She was hired through the Semta Apprenticeship Service which manages the whole apprentice process – from advertising a role, assessing specific training needs, to securing funding, working with a recognised training provider and ensuring the quality of the programme. Securing 10 GCSE’s at school,
rachael Hoyle – BAE Systems
Melissa Holmes – Tata Steel
Melissa Holmes began her career at metal-product manufacturer Tata Steel in September 2011 after leaving school with nine GCSE’s including Science and three
A-Levels. Her apprenticeship programme will run for three years, offering
Melissa the opportunity to attend college to study for a BTEC in Engineering Metallurgy – the physical and chemical behavioural study of metals, qualifying by the end of the second year.
Melissa enjoyed studying science at school and focused on Biology at college. “It was during this time that I realised I would like to have a science-related career and the apprenticeship scheme at Tata Steel gave me a great opportunity to do this,” she says.
Given her own positive experience of the apprenticeship route and the manufacturing industry as a modern work environment Melissa is hopeful that more young women will follow in her footsteps. “I hope more females will consider a career in engineering and manufacturing and look to apprenticeship schemes as a great route to build confidence and develop knowledge in this exciting industry.”
Speaking of her own ambitions for the future Melissa says: “In the next few years I have ambitions to complete a full degree in Engineering Metallurgy, while working for Tata Steel in a technical role.”
Charlotte always showed promise in following an engineering career, particularly after achieving an A* in electronics.
Since the apprenticeship programme began, Charlotte has qualified with an NVQ Level 2 in Performing Engineering Operations, as well as various passes and distinctions at Rotherham College, including CNC Machining and Milling.
Charlotte says she was always intended for a career in manufacturing. “I knew from the beginning that an apprenticeship was a great decision. I decided I would like a job that would make me think and push me to work hard; working at Darron SBO has definitely fulfilled this.”
Charlotte also has a flare for IT and an intuitive skill with computers. “The CAD side of the industry is something else that really interests me,” she says and consequently she is hoping to advance her knowledge of CAD and CNC programming on taking up a permanent position with Darron SBO.
Charlotte expects to complete the apprenticeship programme in one to three years, and is studying for a foundation degree at Barnsley College and an NVQ Level 4.
Rachael completed an advanced apprenticeship in aerospace engineering and secured a full-time position in the structural engineering department at BAE Systems. She took full responsibility for running a crucial package of work that helped secure a big project for the company.
Rachael says she is confident the work she has done has helped to improve the overall image of apprenticeships among the next generation of school leavers, and has particularly promoted engineering as a path to success and excitement.
“If I’m honest, I didn’t always want to be an engineer or work with aircraft,” reveals Rachael. “And as my schooling drew to a close, I felt unsure of what the future held. I looked into apprenticeships and other courses, and what clinched the apprenticeship for me was the fact that I could go and begin a career, learning from people who are experts in their own right. I felt I could get involved in real work while applying my favourite subjects, like physics and maths.”
Rachael has now completed her advanced apprenticeship and followed this up by receiving a bachelor of engineering degree at Manchester Metropolitan University. She now works in Typhoon Export at the company.
Rachael Hoyle has used her apprenticeship to help her employer and to
help promote apprenticeships at home and around the world.
All the apprentice frameworks for the schemes these young women have followed were developed by sector skills council, Semta.
I ’m thrilled to say that we’ve reached maximum capacity on the school days for this year’s Big Bang Fair on
March 15-17. We are also nearly at capacity for the family day on the Saturday, which speaks volumes about national appetite and the enthusiasm of our supporters in making the fair a flagship event for science and engineering that the public, as well as industry, really value.
When I wrote my last diary entry, we were building up to The Big Bang Lesson with Professor Brian Cox at Jodrell Bank. Thanks to our partnership with BBC Learning, which filmed the lesson as part of their Stargazing series, the lesson was watched live by over 45,000 people. And you can still catch it on the BBC’s Stargazing page online.
A video of The Big Bang Lesson can also be found on The Sun’s website and the event was covered by over 150 publications, helping us to reach a wide audience with the science and engineering careers messaging that The Big Bang is built on. It’s this excitement around The Big Bang Fair that enables us to reach many more young people teachers and parents than we could ever fit into a three-day event – no matter how big the venue.
the opportunity to benefit from the fair’s underlying careers message. One of the fair’s Careers Hub activities is ‘Whose Crew Are You?’, helping young people to see how their skills, interests and talents match up to particular careers and job roles in a variety of sectors.
This helps to give young people a tailor-made résumé and we’ve developed the activity as an app so that young people can benefit and be involved in some of the fun, even if they can’t attend this year’s event. If you know any budding scientists or engineers – or even better those who don’t yet realise they are – point them towards ‘Whose Crew Are You?’ on The Big Bang website’s careers page or Facebook.com/thebigbang4u.
It’s hard to convey the unique quality of The Big Bang Fair with words. My best advice is to come along and see it for yourself. Come as a visitor this March and make your company part of it in 2013.
You can register as a stakeholder visitor for The Big Bang Fair at [email protected] or for further information get in touch with Gemma Samlal ([email protected]) on 020 3206 0427.
Paul Jackson, chief executive of EngineeringUK and The Big Bang Education CIC writes his last Diary entry before The Big Bang Fair 2012 swings into action.
is believing Seeing
Every year we learn more about effective ways to make the most of our concerted efforts to inspire the UK’s future scientists and engineers. More than ever, we’re creating opportunities for stakeholders to engage in our ‘year-round conversation’ with young people - enabling them to reinforce their relationship with students who are keen to meet prospective employers.
In February we launched The Big Bang Days Out with BAA, Jaguar Land Rover, Alton Towers and the Science Museum, offering young people the chance to take part in an exciting, one-off experience day. Through media partnerships and online seeding, this extended Big Bang activity is another opportunity to promote science and engineering on a national platform.
The Big Bang Fair can be a formative experience for the young people who attend. Ninety five per cent of 12–19 year olds said they learned a lot about science and engineering by coming to the fair and 77% said it had a positive effect on how they view engineering.
The impact of experiencing for themselves the wonders of science and engineering cannot be paralleled, but we do want to make sure that as many young people as possible have
Ninety five per cent of 12–19 year olds said they learned a lot about science and engineering by coming to the fair and 77% said it
had a positive effect on how
they view engineering
Keep up to date with our milestones at twitter.com/BigBangFair
Big BangDiary
50
Phil BurnsEngineering Manager, BAE Systems Submarine Solutions
Phil Burns took up his craft apprenticeship at a time when they were a major entry route to a career in manufacturing and engineering. Thirty-nine years later, he is due to meet with the Queen to receive an MBE for services to the defence industry. Here he talks to about his recent recognition and skills for success.
TM: What first attracted you to an engineering career and what has kept you in it?PB: The majority of people in [Barrow-in-Furness] took on the apprenticeship when I started. Once employed, I was identified as having enough potential to be a drawing office candidate and move into design, which opened up new career opportunities for me. If you wanted to take it on, there was a route to progress through the drawing office offices and into advanced positions.
I am passionate about designing and helping manufacture, turning a design into a product that works. An engineer is always looking for ways to keep on improving a design, it never gets dull.
TM: UK manufacturing has declined over the past twenty years but is experiencing something of a renaissance. What have you seen of this trend?PB: In the industry’s heyday, a lot of people came into the yard and industry. If you had an apprenticeship from the shipyard, you could go and work anywhere. There was a period when we didn’t take on as many apprentices, but there is now fierce competition for the places available.
TM: Would you recommend a career in engineering to young people now?PB: Absolutely. You see a product go from a piece of paper to a physical item that has got your work in it. In shipbuilding, we are building a community that goes to sea and will be out there for 25 years. I take great pride in that. Engineering is a challenging and interesting role for someone to get into.
TM: What have been most rewarding highlights in your career so far?
2012. My wife saw the look on my face after I opened my letter to inform me of MBE and asked what was up.
It was a nice surprise and a reward for a job I enjoy. My involvement in new technology, engineering and working with other organisations were the main reasons behind the recognition. The most challenging bit of it all is that I have a wife and two daughters who are more concerned about the outfits they will wear at the ceremony!
employee of
the month
March 2012
Have your say at www.themanufacturer.com 51
PB: 1) Getting into the drawing office. 2) Working on my first ship as a designer, HMS INVICIBLE.3) When we began using CAD designs I was one of Pathfinder Team Members that brought the technology into the drawing offices.
TM: What technological innovations have changed the way you do your job and how?PB: We tended to work more as an independent shipyard in the past. Enabled by CAD, I recently worked on a project collaborating with other shipyards right across the country.
TM: What are you working on at the moment and what skills do you use?PB: I’m currently working with other organisations to design future submarines. I use project management and communication skills to ensure that the best idea is used. Listening becomes increasingly vital as you go higher up in management.
TM: What does it mean to be awarded an MBE for your work?PB: It came as quite a surprise that I had been awarded an MBE in the New Years Honours List
Age: 54 Qualifications:HND in Mech Eng Design, Institute of Management Diploma in organisational management, project engineering & Lifecycle Management (Internal BAE accreditation), 9 GCSEs. Industry experience:Ship building, engineering design systems and CAD System implementation. Interests:Sailing, power boating and shooting
CV in brief: Phil Burns
Safety isn’t a priority at
British Gypsum, it’s a core value
Stephen Smith, Operations Director,
British Gypsum
52
W orksite risks in the manufacturing sector can be a dangerous; there
were 27 fatal injuries in the sector during 2010-11 in the UK.
Roles in the sector are varied and range from handling 1,000°C+ materials to operating multi-tonne machinery. Despite complaints about the flood of health and safety regulations into low-risk workplaces, partly due to a rise in ‘suing culture’, health and safety is vital in industry. Health and Safety Executive (HSE) statistics show
have just joined a ‘million hours lost time free club’ alongside its Barrow and Kirkby Thore factories and its Fauld, Barrow and Robertsbridge mines.
The larger sites have achieved the million hours lost time accident measure in three years and the Fauld mine has now gone 15 years without a lost time accident. British Gypsum as a whole has now gone for three years without a lost time accident across its five factories and five mines.
A position on such a high pedestal must be precarious
Tom Moore talks to Stephen Smith, supply chain and operations director at plasterboard manufacturer British Gypsum, who explains that the company’s excellent safety record is down to time not money after another two of its sites hit a one million hours zero lost time accidents milestone.
that manufacturing has one of the highest rates across sectors of incidents resulting in three or more days off work. Overall, UK manufacturing saw 1,649.2 incidents for every 100,000 employees during 2010-11.
But is this high accident incidence level avoidable? Some would say that there is room for improvement, but that “accidents happen”. British Gypsum has done its best in begging to differ, and on December 20 last year, announced that its East Leake and Robertsbridge Factories
The secret to one million hours and counting of zero lost time accidents
first,middle and last
Safety
BG’s East Leake plant joined the club in December 2011.
operationsmaintenance and repair
53
but representatives from the Leicestershire-based firm staunchly insist that risk can be managed minutely if time is taken to create a safety-conscious workforce.
Kirkby Thore’s plant manager Chris Britton comments, “It’s imperative that people go home in the same health they arrived on site. Whether they’re an employee, contractor or visitor, we make it a priority to ensure everyone understands what is expected of them and sees health and safety as an essential part of their day-to-day job.
But what does this dedication to health and safety cost the company? Stephen Smith, operations director at the plasterboard manufacturer, openly admits that the company hasn’t spent much money on achieving the zero lost time accident record.
Instead of quoting flashy sums spent on consultancy or protective technologies, Smith explains it is time – something money cannot buy – that has proved to be the essential ingredient. He expands, “Safety isn’t a priority at British Gypsum, it’s a core value that we have worked on over a long period. I go to lots of places where they say that safety is a priority, but today’s priority is not always tomorrow’s.”
The methodology This mentality ensures that safety is embedded in company culture and drives forward a five pronged approach to creating and maintaining British Gypsum’s safety record. This approach incorporates:
1 Creating management clarity and setting the right standards
2 Embedding the right perceptions around the relative importance of
productivity and safety
3 Establishing capable processes to eliminate stops/breakdowns/
process variance
4 Ensuring compliance with British Gypsum/UK safety standards and
reducing risk
5 Five FOILE and operator involvement
With these factors requiring minimum investment, Smith states: “I am of a certain belief that we invest capital in factories only to expand output or meet industry requirements. We don’t replace our machines with new machines. If the machine is not functioning correctly we identify the root cause and repair it. Spending money does not generally solve problems.”
The introduction of a World Class Manufacturing (WCM) programme ten years ago marked the beginning of British Gypsum’s journey down this road. Smith notes “Our factories don’t break down, we have absolute control of the process, OEE has improved massively, our quality complaints are at the lowest level ever, our delivery precision at its highest. In addition, absenteeism is 1.9% across all of the factories and mines.”
The company has moved from having twenty lost time accidents per year to none across all of its sites over the past three years. Smith estimates that the number of unplanned factory stops, which can be from five seconds to three days, was around 600-700 a month nine years ago. “The target now is less than 10 a month and we beat it in all factories by a long way.”
Eliminating the minor stops of just a few seconds has been an important success factor continues Smith. “This is potentially where employees can become blasé about entering the machine and end up getting hurt,” he says.
But apart from this kind of attention to detail, perhaps the most important factor in British Gypsum’s escalating safety record is its rejection of complacency. Smith reveals, “We have very high internal safety standards which we review annually. The factory managers are challenged to increase the level of compliance to a standard which ensures risk is reduced by 30% every year.”
Asking the right questionsOften with accidents, people can think they are doing the right thing. Smith puts a serious edge on the Dr Pepper joke: ‘what’s the worst that can happen?’ and insists that asking the right questions sets the right mentality for thinking about the work environment and its dangers.
“We’ve vetoed the superhero mentality,” explains Smith. “We want the right people to do the right thing at the right time. If there is something wrong, stop the plant and repair it, don’t keep it running and fix it. The focus is on repair not fix.” The supply chain and operations director continues, “We use a behavioural safety programme called SUSA [Safe and unsafe act] at the shop floor, team leader and first line manager level. Above this we use SMAT [Senior Manager Audit].
“The objective of these,” explains Smith “is to encourage our people to talk about being safe when doing their job. Safety improvements have also been supported through a programme of work with HSE - Field Operations Directive in their Interventions in Large Employers (FOILE).
“FOILE was started five years ago and we are just in the process of finishing it now. It has taken this long due to the high standards we have put in place.” FOIL is set around rigorous reduction of risk from: slips, trips and falls; working at height; workplace transport; manual handling; machinery interventions; work in confined space and stress.
“This five-year partnership involved working closely with HSE on a proactive basis and also involving shop floor representatives who did a large part of the work,” concludes Smith. “A positive outcome is the shop floor reps are working autonomously and visit each others’ sites to audit and share.”
We’ve vetoed the superhero
mentality. We want the right people to do
the right thing at the right time
Stephen Smith, Operations Director,
British Gypsum
Manufacturing safety stats in 2010-11
17,626 incidents resulting in 3+ days off work
3,726 major injuries
27 fatal injuries
The most common cause of death in the manufacturing industry was being hit by a moving, flying or falling object (8) and contact with moving machinery (6)
54
Some well established end users, he adds, include a clutch of upmarket motor manufacturers, such as Aston Martin, Bentley and Morgan Cars, as well as defence contractor BAE Systems and aero engine manufacturer Rolls-Royce.
All of which provides a clue as to the function of the presses in question: creating structures which are strong, lightweight and fastener-free.
But what is the technology supplied by Group Rhodes that has all these companies hooked? Superplastic forming and diffusion bonding, combined into a single powerful process. The Trent engine used on the
A small British manufacturer is, literally, at the leading edge of metalforming technology, finds Malcolm Wheatley
y ou don’t have to look too far to see politicians queuing up to urge British manufacturers
to develop and export world-beating technologies. Take a look at specialist machine tool manufacturer Group Rhodes, though, and you’ll see a business that has long prospered by doing just that. Managing director, Mark Ridgway, explains that the latest ‘trend’ for high tech exports is nothing new to him.
“Last year, we shipped the biggest press of its type to China, costing over £2 million,” he says. “And this year, we’re shipping an even bigger one.”
Manufacturing
formedgiant A380 Airbus, for instance, includes fan blades manufactured on Group Rhodes presses.
“Molecular bonding is the strongest join known to man,” says Ridgway. “There’s no compromise: it eliminates riveting, bonding and welding, reducing assembly costs and reducing weight. And we’re one of the just three companies in the world with the capability to produce the equipment that does it.”
Why such an exclusive group? It’s not an easy trick to pull off, stresses Group Rhodes technical director Peter Anderton, acknowledged as a world authority on the technique.
Explaining how the process works and what it involves, Anderton chooses his words carefully, eschewing complex structures such as the canard wing of the Eurofighter for the homelier example of a titanium hot water bottle.
“Imagine two sheets of titanium, in the shape of a hot water bottle, pressed against each other,” he
Group Rhodes is one of just three companies in the world capable of building SPF presses
Last year, we shipped the biggest press of its type to
China, costing over £2 million, and this year, we’re shipping an even bigger
one
Mark Ridgway, Managing Director,
Group Rhodes
Manufacturing
55
says. “The sides lying against each other are coated with boron nitride, with the boron nitride delineating the surfaces that you don’t want joined together. Now apply a pressure of about 50 bars, and heat to 925ºC: the parts not coated with boron nitride are now atomically joined together. Insert a nozzle in the ‘neck’ of the hot water bottle, inflate with inert argon gas, and there you go: a titanium hot water bottle.”
Needless to say, customers such as Rolls-Royce and BAE Systems aren’t handing over considerable sums of money for the privilege of manufacturing metallic hot water bottles. And the sums are indeed considerable: while a small 100-tonne press might cost just under £1 million, a larger capacity press might cost four times that.
“Throw in automated material and tooling handling systems, and you’re talking almost £7 million,” says Ridgway. “It’s not cheap, but it eliminates riveting, bonding and welding, enabling manufactures to make a full monocoque structure in one process – and because you’re not drilling holes for rivets or screws, there’s less risk of structural cracking.”
That said, the technology isn’t without its challenges, adds Anderton. Success calls for precise control of a number of critical parameters – which in turn calls for precision engineering of the highest order. Temperatures, for instance, have to be extremely consistent and tightly controlled to within ±2ºC – no mean feat when you’re talking of the temperatures in question: 490ºC for aluminium, 550ºC – 600ºC for aluminium magnesium alloys, and 925ºC for titanium.
Likewise, the argon gas control has to be precise – around ± 15 millibars – in order to deliver the desired deformation characteristics, and the hydraulic tonnage pressure has to be very accurate if a full molecular bond is to be achieved.
Get it right, though, and you’ve got a technique for joining metals
together in a way that eliminates manpower, adds strength and rigidity, and reduces weight. Typical savings, says Anderton, are around 30% in cost, and 20% in component weight.
What’s more, he adds, the simplistic two-layer hot water bottle analogy doesn’t do justice to the full potential of the technology.
Add a third or fourth layer, he explains, and you’ve got something conceptually similar to corrugated cardboard, with the intermediate layers contributing further strength and stiffness. It is just such additional layers that lie under the skin of the canard wing of the Eurofighter, and the exhaust bay doors of the Joint Strike Fighter, for instance.
So what sort of business develops and masters such technology? Headquartered on an eight acre site in Wakefield, with over 15,000 square metres of factory space under cranage, Group Rhodes is very much a classic British small company, explains Ridgway – albeit one with a lengthy aerospace heritage, as well as a clutch of well-known metalforming brands, including John Shaw, Fielding and Platt, and Joseph Rhodes.
“From the early years of aircraft production, Group Rhodes companies have offered world class expertise in the supply of metalforming solutions,”
says Ridgway. “Today, our machinery produces precision engineered components for leading aerospace manufacturers worldwide.” And, what’s more, the business has been involved with superplastic forming and diffusion bonding from its earliest commercialisation in mid-1970s, when material analysts in the aircraft industry were investigating the phenomena of superplasticity in aluminium and titanium alloys.
For although the size of the business is modest – just 230 or so employees spread over four sites – all major research and development work is conducted in house. And Ridgway stresses that new designs of metalforming machinery are constantly being developed to meet evolving technical requirements.
In addition, he notes, the business works closely with local university departments in design, manufacture and engineering management, mechanical engineering, and a number of global industrial manufacturing companies.
“Britain’s aerospace and automotive industries are major exporters, and critical to the British economy,” sums up Ridgway. “If Britain is to remain competitive, it’s vital that companies like ours grow and prosper, and continue to develop world-beating technologies.”
Technologies
The SPF process can join metal in a way that eliminates manpower , increases
strength and reduces weight
56
A special case?South Yorkshire industrial leaders adamantly believe that there is something unique in their business community. But is there any substantial evidence to suggest that this is true?
A combination of circumstances have certainly created a special environment and attitude. The region has comparatively few big multinational engineering companies to provide large scale programmes and employment. Instead, the region’s manufacturers have had to survive on their wits, their appetite for work and, often, their knowledge of working with steel and special materials.
It is this knowledge of materials which is the glue that connects a host of small and medium-sized businesses, larger companies, the city’s universities and institutions like the Advanced Manufacturing Research Centre with Boeing (AMRC).
Another contributing factor is that South Yorkshire industry is unambiguously international. The expertise here in steelwork,
materials science and engineering lends itself strongly to international markets. This has taken local companies to Canada, India, Korea, the Middle East, Russia, South America and beyond, and brought experts in fields such as metallurgy into the fold of the Sheffield region.
Evidence of this is all around Sheffield. On Shepcote Lane, Finnish company Outokumpu casts and rolls high alloy stainless steel, destined for global markets. Local legend Sheffield Forgemasters is forging another record-breaking component for an offshore oil installation – perhaps for Korea or Russia – down on Brightside Lane, while Durham-Duplex on Petre Street works with its Thailand factory to supply high grade industrial blades to an increasingly discerning Asian packaging industry.
Right now, DavyMarkham is precision-machining a 100-tonne mine hoist for the Pique Andaychagua gold mine in Peru. At the AMRC with Boeing in Rotherham, University of Sheffield scientists work with
We want the Festival to become the global
go-to place for materials-based markets
Richard Wright, Sheffield Chamber
of Commerce
Materialsworld
The Global Manufacturing Festival has a big ambition: to become the default, global hub for seekers of special materials-based knowledge and products – The Farnborough International Air Show of the advance materials world. Will Stirling finds out what’s behind the words.
A vision of the future Advanced Manufacturing Institute at the Advanced
manufacturing Park in Sheffield.
Find out more about these and other companies exhibiting at the Global Manufacturing Festival online at www.globalmanufacturingfestival.co.uk
Specialfeature Sheffield GMF
57
tooling specialists Technicut on techniques to precision-mill titanium components destined for Rolls-Royce factories in the US, as well as for Boeing and Airbus. Next door, the Nuclear AMRC helps engineering firms nationwide gain accreditation to make nuclear-grade parts, so they are primed for when the UK’s civil nuclear bonanza finally gets the green light.
An event for its environmentEnter the Global Manufacturing Festival. Now in its third year, the festival has a five-year plan to become a global centre of excellence for special materials engineering applications – a honeypot of materials expertise crossing all industry sectors, especially for aerospace, oil and gas and nuclear applications. “We want the festival to become the global go-to place for materials-based markets,” says Richard Wright, director of the Sheffield Chamber of Commerce and co-founder of the festival. “An annual event which companies worldwide will attend to learn, to buy – and indeed sell – their products and services, where materials is the common thread.”
Business conferences can be guilty of attracting the same old faces. While welcoming British companies, the two-day festival in March aims to fulfill its global moniker by attracting foreign delegates to this regional showcase.
The show organisers say: “Several buyers and sellers from a range of countries are attending to allow delegates to network and develop business opportunities with companies in the Ukraine, China, France, Brazil, Columbia, Rwanda, India and the USA.”
Visit the Global Manufacturing Festival on March 21-22 to test whether the event lives up to its international billing.
Sheffield – a conduit to the world
M anufacturing, especially when the product is high value, gives companies a key to the world. Many businesses and academic organisations in the
Sheffield region have partnered up to share and multiply the benefits this can bring. Adding value to materials that are further converted elsewhere, destined for a customer far away.
Outokumpu provides stainless steel to Ancon, an Irish construction engineering company with a factory in Sheffield. Recently Ancon took water-jet cut components made from Duplex, a stainless steel type, and fabricated sections to support a fire duct in a car tunnel in Brisbane, Australia. “The structure had to be heat resistant up to 800C,” says managing director Peter McDermott. “Welding Duplex is difficult. A series of tests were performed at The University of Sydney to ensure the components would not fail.” Ancon supplies components to Europe, Australia and the Middle East.
One of the city’s best known sons, Sheffield Forgemasters International exports its advanced forged and cast components to 27 countries. With or without the 15,000 tonne press the company became famous for (and Deputy PM Nick Clegg became infamous for) in 2010, Forgemasters is one of only five companies in the world that can manufacture certain civil nuclear-grade castings. Its research team, including Jesus and Moses Talamantes-Silva, two Mexican scientists from the University of Sheffield, has pioneered a new process for forging the integral nozzle of the steam generator on a civil nuclear power plant. “This greatly reduces the downtime for nuclear inspections, saving energy companies vast sums,” says a company spokesman.
British company JRI manufactures orthopaedic and healthcare solutions. The supply chain for its flagship product, the Furlong HAC hip replacement, is a prime example of connecting local to international. Managing director Edward Draper describes the chain: “We source forgings for the Furlong stems from Sandvik (based in Holbrook). The raw material comes from Switzerland, but the coating material for the bone interface is applied by us. We sell a ceramic bearing surface, which comes from Stuttgart, Germany. We do the machining and polishing and have our own clean room from which we pack the final components.
“Sterilisation is done locally at [surgical blades manufacturer] Swann Morton, then into stock here for distribution. We sell mainly in the UK, but have significant export markets – mainland Europe, Scandinavia and Australia – a list that grows each quarter.”www.globalmanufacturingfestival.co.uk
The Eye of the Forge, taken by Mark Tomlinson at Sheffield Forgemasters and a winning entry to EEF’s 2011 Photography Competition.
Chris Dee, executive director of the British
Compressed Air Society (BCAS) discusses his
organisation’s concern at the widespread and
costly inefficiencies being overlooked in
one of manufacturing’s most ubiquitous plant
technologies.
58
incentives available to help fund the installation of new compressors.
In a recent case study, a steel foundry in the UK was able to benefit from an interest-free loan from the Carbon Trust to fund the installation of two regulated-speed compressors. Thanks to the high energy efficiency of its new compressed air system, the foundry was able to increase productivity and cut its compressed air energy costs by more than a half.
Hot air venting from the foundry’s small compressor house ensures that 80% of the energy lost in the compression process is reclaimed. The hot air is ducted into the foundry during winter and out into the atmosphere in the summer, allowing heaters to be turned off, saving £10,000 per year in diesel costs.
The loan is expected to pay for itself within four years through energy savings alone.
energy reductionAlmost three quarters of industries use compressed air for some aspect of their operations. Many of these industries operate around-the-clock, constantly adding to a plant’s energy costs. So it’s no surprise that energy efficiency and the reduction of energy consumption continue to be key drivers behind the majority of compressed air system improvements.
Whether it’s investing in the latest, high-efficiency compressor and downstream technology, or simply carrying out an air audit on an existing network, energy concerns have become the norm.
There are also certain legislative requirements that mean many manufacturers have an obligation to improve their carbon footprint, by investing in new, energy-efficient technologies.
At BCAS, we work closely with the Carbon Trust, helping our members and their customers understand the legislation and the grants or tax
Savings from
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At BCAS, we work
closely with the Carbon Trust, helping our
members and their customers understand the legislation and the grants or tax incentives available to
help fund the installation
of new compressors
Chris Dee, Executive Director
of the British Compressed Air Society (BCAS)
BCAS
Setting the standardMany customers are keen to retain their existing compressors and BCAS members can work with them to improve the efficiency of their network, looking at areas such as a site’s compressed air requirements, including air pressure, power consumption and flow rates.
Detailed audits help to establish the best compressed air system for the application.
There have, however, been concerns for some time that the lack of a formal standard allows suppliers with differing levels of expertise to conduct a compressed air audit - and for that examination to then be considered as a comprehensive system assessment.
After more than four years of work between BCAS and the ISO Technical Committee 118, 2012 should see the publication of a new standard for compressed air system assessment, called ISO11011 (Compressed air – Energy efficiency – Assessment).
ISO11011 is designed to create a framework for the assessment process to improve on existing compressed air audit activities, which can also be embedded in to other requirements that exist around the globe.
The new standard considers the entire air system, from the energy inputs to the task performed and classifies compressed air in to three subsystems:
SUPPLY, which includes the conversion of the primary energy resource in to, compressed air energy.
TRANSMISSION, which includes the movement of, compressed air energy from where it is generated to where it is used.
DEMAND, which includes the total of all compressed air consumers, including productive end-use applications and various forms of compressed air waste.
One of the key features
of ISO11011 will be the establishment of a baseline performance for a compressed air system. The purpose of baselining is to establish the current performance levels and costs of a compressed air system, and to correlate the results with the plant’s present production levels.
As improvements are made to the compressed air system, it will be possible to estimate improvements by comparing the new measurements with the original baseline.
regular Maintenance Ongoing maintenance of the compressed air system is integral to its reliability and energy efficiency. We would always advise taking out a full support contract, to include regular performance and safety checks, to cover any emergency repairs alongside preventative maintenance.
As with much of today’s plant equipment and machinery, compressor performance and efficiency is affected by the components and lubricants within. Performance and
benefits can be compromised if the user takes the decision to use non-genuine replacement consumables and parts.
Modern, high quality compressors will offer maximum performance, energy efficiency and low total cost of ownership over many years. Therefore a lot of time and care, not to mention cost, is taken to choose the right compressor for the job. Once this decision has been taken, it makes little sense to use non-genuine replacement components and undermine the initial investment.
Using genuine parts supplied by the manufacturer of the original equipment means the compressor will provide the expected performance and maintain its energy efficiency benefits. Genuine parts are the only sure way of keeping the cost of running a compressor within the service and maintenance budget rather than having to find the cash to pay for unexpected major repairs.
The Carbon Trust recently published research which quantifies the substantial
savings companies can make through addressing the efficiency of their compressed air systems.
Following on the research the organisation has also produced a simple ‘how to’ guide to gaining increased efficiency titled, the Compressed Air Overview.
According to the Carbon Trust the levels of energy consumed by compressed air systems are commonly underestimated. In fact, they claim that 10% of industry’s energy consumption is accounted for in compressed air systems, equivalent to the annual output of nearly 1.5 power stations and over 5 million tonnes of CO2.
Surveying national programmes to increase compressed air efficiency, The Carbon Trust has found that typical savings are in the region of 30%. This equates to average energy savings of £1,500 a year per company.
Richard Rugg, director of Carbon Trust Programmes, commented on a general misconception in industry that compressed air is a free or low cost resource. “In fact the opposite is true,” he says. “Just a single 3mm hole in a compressed air system creates a leak, which can cost a business an additional £1,000 a year in electricity costs.”
“This is not a niche problem,” he continues. “Compressed air is being used across industries as diverse as aircraft manufacturing, water treatment, electronics and engineering.”
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design and development to get new products into production faster and more cost-effectively, and manage the whole product lifecycle – managing customer experience, as Evans suggested, but also ensuring compliance with WEEE, ROHS and other regulations.
Failing to recognise the above pressures could be damaging. Delays in bringing new products to market, for instance, can have a severe business impact for time and money spent on innovation is wasted if someone else commercialises a similar idea first. In addition failure to comply with industry standards can incur fines, re-work or product write-off – all in addition to reputational injury.
The problem for many product-oriented businesses today in that product development and commercialisation processes are disjointed and inefficient. Evans eluded to this with his comments on the imbalance between global IT spend on design authoring as opposed to product data management software, and the persistence of a divide between product data tools and business process technology like ERP.
But this barrier to integrated product development and commecialisation is amplified when you consider that different divisions within large organisation and supply chain partners often use distinct systems, processes and ways of handling product data. This creates a barrier to collaborative working and increases the chance of weak links in the value chain causing design problems and delays.
IDC’s December 2011 report, The Product Value Chain in Manufacturing revealed that “On average, about 20% of projects are over time or budget, and more than one-third of product companies have experienced at least one runaway project. Overall, nearly 50% of the resources allocated to product development and commercialisation are wasted.”
In an industry which increasingly works to lean
Following ’s focus on PLM in February, enterprise technology company Oracle has responded with some thoughts on technology development trends and insight into its own answer to the need for technologies which accelerate innovation for high tech manufacturers in a fast-moving industry.
offeringAn enterprising
A s was highlighted by Cambashi’s Mike Evans last month (see PLM: an
introduction in TM Feb 2012) globalised industry is engaged in relentless innovation – high tech manufacturing particularly so. Vendors must develop new products and product versions quickly and continuously despite the constraints of downward pressure on prices and stringent regulations governing electrical and electronic equipment.
That means finding ways to accelerate and improve product
for more information please contact: [email protected]
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principles this is shockingly wasteful and a new, streamlined approach to managing the product value chain is clearly needed. That approach is now emerging, combining product authoring and data management technologies with the capabilities of Enterprise Resource Management as Evans suggested. Oracle terms this, Enterprise Product Lifecycle Management (Enterprise PLM).
A strategic issueEnterprise PLM is a strategic approach to managing the lifecycle of a product throughout its full value chain in a company or across company boundaries. The approaches includes all processes; from requirements gathering through design, prototyping, certification, production, customisation, distribution and retirement. It unites all the partners in the value chain by providing a single, collaborative software platform.
Enterprise PLM is much more than just a technology solution. It represents a new, strategic approach to the product value chain that emphasises process efficiency, inter-organisational collaboration, rapid innovation, rigorous quality control, risk mitigation and cost-effectiveness.
Organisations that take an Enterprise PLM approach reap many advantages, including:
Higher product quality Faster time to market A leaner value chain Better compliance with industry regulations
Increased profitability for every product
Better management insight into product-related processes throughout the value chain
Again as Evans pointed out in PLM: an introduction, product lifecycle management is not a new concept. Historically, designers and engineers have used CAD and collaboration software to work on product design and prototyping,
developing innovative products as quickly and efficiently as possible. But this isolation of the design function is limiting.
Oracle has pioneered the concept and delivery of Enterprise PLM, creating a world-class suite of software solutions that together provide a single product record and a comprehensive platform for complete product lifecycle management across the value chain.
Based on the market-leading Agile PLM suite, acquired by Oracle in 2007, Oracle Enterprise PLM also features best-in-class software solutions for project portfolio management, document visualisation, product serialisation management and business intelligence. With Oracle Enterprise PLM solutions, companies can move fragmented engineering and design processes into information-driven product value chains with outstanding development processes, 360-degree visibility into product information, and real-time collaboration across the entire product network.
This combination of accelerated innovation through improved idea management
and collaboration with better product portfolio management and analytics, data consolidation and cleansing and design for supply with product cost management is a powerful tool for a single organisation. But the scope of Oracle Enterpise PLM reaches beyond this to include outsourced manufacturing product collaboration, supply risk analytics, and spend consolidation capabilities. It aims to align the value chain through portfolio and business planning, analytical enterprise quality management, accurate and clean product data publishing for rapid product commercialisation.
Glenn Neland, vice president of worldwide procurement for Dell and an Oracle Enterprise PLM used commented on his experience of the technology as being “rich and collaborative.” He went on to say that it “has improved communication with our internal divisions and supplier network, by ensuring that all product content information is centrally aggregated in a single global system and that all product changes are instantly disseminated and tracked across the global supply chain.”
Historically, designers and engineers have used CAD and collaboration
software to work on
product design and prototyping, developing innovative
products as quickly and efficiently as possible. But this isolation of the design function is
limiting
Case Study: Sun MicrosystemsOracle acquired Sun Microsystems on January 27, 2010. Since then it has helped developed the company’s hardware and software components, producing such pioneering engineered systems as the SPARC SuperCluster T4-4.
At the time of acquisition, Sun Microsystems was managing product data within its engineering division, but the wider processes of the product value chain were characterised by a lack of standardisation and a reliance on aging and manual systems. Data sharing was difficult, keeping costs high and preventing the realisation of process efficiencies.
By extending Oracle Enterprise PLM to its new acquisition, Oracle was able to:
Create a single version of truth for product information
Replace Product Data Management legacy systems with Enterprise PLM
Standardise processes and centralise access to product records
Consolidate design specification management and access
Implement automated supplier package generation
Cut time to update from CAD to ERP
As a result, Oracle has reduced or eliminated manual data entry in many
areas, lowered development costs and accelerated time to market for its new products, instigating true ‘Art-to-Part’ production with a clear flow from CAD concept to the finished product on the manufacturing floor.
David Burton, Director, PLM, Applications Development IT, Oracle states: “In just nine months and under budget, we standardised the processes across all hardware platforms and centralised access to product data across the product value chain. We decreased the average change cycle time by 25 per cent and were able to process a 38 per cent higher number of production engineering change orders.”
or not?
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ineffective training. Absence, too, was a problem, with gaps on the plant’s production lines being filled by costly temporary agency personnel.
Armed with information about where the problems lay, management then set in place lean improvement programmes to tackle the various issues that the findings had raised.
As a result there’s been a 33% reduction in downtime caused by suppliers. An 80% drop in lost time due to skill shortages and absence levels are down 31%, from 4.1% to 2.8%. An additional 30% reduction in costs for temporary staff has come in the wake of the above improvements.
Overall, in fact, non-productive time has been turned into productive time, generating a 47% increase in productive hours from an unchanged number of employees, leading to a 33% increase in production volume.
ERP? Or a niche solution that’s a better fit? It’s a tough call, says Malcolm Wheatley.
To one-stop-shop
W hen Belper, Derbyshire-based boiler manufacturer
of Vaillant Group began a programme aimed at cutting lost productive time, it found that information technology quickly identified just how extensive the causes of that lost time were.
One significant source of lost productive time, for instance, was supplier-related downtime, caused through late deliveries or non-conforming parts. Lost time due to skills shortages was another cause, with the flipside of this being lost time spent on misaligned or
Saying that SAP can do everything that every
manufacturing business
wants would be wrong: there will
always be a need for niche
solutions to deliver specific
capabilities
John Hammann, Industry Principal for Manufacturing, SAP
Thales flight simulator, manufactured at its site in Crawley
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What was the information technology that guided Vaillant management to these improvements? Not the business’s world-class ERP system, but a workforce management application from specialist vendor Kronos.
“Kronos is a ‘best-of-breed’ niche application that gave us exactly what we were looking for, with no compromises,” says Vaillant continuous improvement manager Allan Harley. “It was also fully compatible with our ERP system - so we’ve got the best of both worlds.”
Vaillant is not alone in seeking this middle ground. Kronos operations director Simon Macpherson says that a continual stream of customers is beating a path to its door, looking for real-time workforce management information. And they want it delivered from a tool that’s quickly deployed, and which will complement an existing ERP system.
“Kellogg’s, Nestlé, Caterpillar: they’ve all got major ERP systems, but have come to Kronos for workforce management,” he says.
It’s a statement that cuts right to the heart of the ERP versus ‘best-of-breed’ niche solution debate. Undeniably, ERP systems have expanded their application footprint: from human resource management to purchasing, and from supply chain management to manufacturing execution. And consequently today’s ERP systems can offer a high level of functionality. But will it ever be enough to be a one-stop-shop?
Many manufacturers hope so. They want an ‘out of box’ system, perhaps with pre-built ‘best of class’ industry-specific business processes and custom implementation methodologies. One solution, from one vendor, that stretches right across the business.
But life isn’t quite that simple. Niche best-of-breed solution vendors have fought back against attempts to expand
ERP’s traditional remit and today’s solutions offer even better functionality. In addition, improved integration technologies have made it easier than ever to join disparate systems together into a functioning whole.
Niche solutions bring risk and additional costs, to be sure, but their appeal to manufacturers is simply put: a tool virtually guaranteed to be ideal for the task in hand, without compromise.
And the range of niche solutions on the market is enormous: forecasting, shopfloor control and scheduling, maintenance, supply chain planning and execution, and transport route scheduling, to name just a few.
Making the right choiceSo which approach is better? Ask this question today - as opposed to ten years ago - and the answers are surprising. The dogmatism that once characterised the ERP versus best-of-breed debate has been replaced by a refreshing sense of realism. No longer do niche solution vendors suggest that integration issues can be ignored, and no longer do ERP vendors dogmatically insist that ERP will solve all problems.
When it comes to advanced planning and scheduling, for instance, Sage ERP X3’s inbuilt capabilities aren’t necessarily the best solution, recognises Steve Tattum, Sage ERP X3 product manager.
“We don’t deal with the complexities of multiple constraints, multiple supply chains, or sophisticated supply chains,” he says. “In other words, we can schedule on labour availability or tooling, but not both - and if that is a requirement, we have no hesitation in pointing people at our partner Preactor.”
SAP, too, is refreshingly candid about where it draws the line between inbuilt capability, and when it’s best to go to a niche solution.
“Saying that we can do everything that every manufacturing business wants would be wrong,” concedes John Hammann, SAP industry principal for manufacturing. “There will always be a need for niche solutions to deliver specific capabilities. Take manufacturing execution: we have some MES capabilities, but also integrate well with third party providers when our inbuilt offering isn’t enough.” Indeed, points out Jeremy
Within ERP, we deal with asset management up to a point. But if companies need more, then we’ve got Infor Enterprise Asset Management, which provides functionality that most ERP vendors won’t have the bandwidth to develop
Phil Lewis, Business Consulting Director, Infor
Make sure that the
business case reflects the
full costs and challenges of integration. A niche solution puts you on a treadmill in terms of
integration, and an ERP system can work out cheaper
Peter Thorne, Managing Director,
Cambashi
IT in
You probably haven’t thought much about it. You’ve just got music on for your staff or customers. But did you know you need permission from the music’s copyright owners if you play music at work? It’s the law. But don’t worry, to get that permission you simply need a licence from PRS for Music (and in most cases, one from PPL* too). PRS for Music is a not-for-profit organisation that acts on behalf of songwriters and composers to ensure they’re paid for the use of their work. So if you have music playing, ask PRS for Music how you become licensed to listen today.
Contact PRS for Music on 0800 694 7304or at prsformusic.com/musicatwork
*PPL collects and distributes royalties on behalf of record companies and performers. Further info at ppluk.com. All music licences are required under the Copyright, Designs and Patents Act 1988 which stipulates you must gain the permission of the copyright owner if you play music in public (anywhere outside the home environment). You do not need a licence from PRS for Music if all of the music you play is out of copyright.
By law, you need to be licensed to play music at work.
The Manufacturer_Manufacturing press_210x297mm.indd 1 21/09/2011 17:22
IT inmanufacturing
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Harford, managing director of Mestec, a specialist provider of factory floor productivity solutions, ERP systems usually don’t have the ‘placeholders’ to actually store the highly granular manufacturing data that MES and similar systems require.
At Crawley-based aircrew flight simulator manufacturer, Thales Training & Simulation, for instance, a Mestec Manufacturing Smart Box touch-screen system is providing unparalleled visibility into factory floor operations, boosting due-date performance while helping to cut costs.
“For every simulator we’re building, we can call up a dashboard and see its exact status,” explains assembly and installations manager Rob Betteridge. “Before, gauging progress was something of an art: now, we know where we are with pinpoint precision.”
“The identification of non-productive work and unproductive time is very important to us, and we’ve never previously had the ability to do this before,” adds operations director Paul Arnold. “Now, we know exactly where we’re losing time - and can tell if the root cause is supplier failure, or issues within our own manufacturing organisation, such as engineering changes.”
But if niche solutions offer richer functionality than out-of-the-box ERP, it’s functionality that comes at a cost - and not just the cash cost of the software licenses involved.
“If you’re contemplating going with a niche solution, make sure that the business case reflects the full costs and challenges of integration with ERP and any other systems,” advises Peter Thorne, managing director of analyst firm Cambashi. “A niche solution puts you on a treadmill in terms of integration, and an ERP system can work out cheaper.”
“The more niche solutions you have, the riskier it is to knit them all together from a contractual
point of view,” adds Paula Barrett, a partner in the technology practice at law firm Eversheds. “If something goes wrong, or gets delayed, to whom do you have recourse? That’s not to say, don’t do it - but do go into it with your eyes open.”
That said, integration is less of a challenge than it was, thanks to advances such as web services, XML, and inter-operability standards. Increasingly, too, ERP vendors offer middleware layers and ‘connectors’, to facilitate integration.
Some ERP vendors make it even easier: Epicor’s ERP solution, for instance, has been completely re-written around Service-Oriented Architecture principles, precisely to make integration easier, points out director of marketing Malcolm Fox. Acquisitive Infor, for its part, now has a foot in both camps, offering both ERP and a clutch of leading niche applications.
“Take asset management,” says Infor business consulting director Phil Lewis. “Within ERP, we deal with it up to a point. But if companies need more, then we’ve got Infor Enterprise Asset Management, which provides functionality that most ERP vendors won’t have the bandwidth to build into their products.”
Getting realThe reality is that in future, integration is going to be more likely than not, argues Peter Walker, country manager at integration solutions provider Information Builders.
“There are an awful lot of very attractive niche solutions out there that aren’t even offered on-premise, but which are only available through the Cloud, or on software as a service basis,” he notes. “Almost by definition, integration as a business need isn’t going to go away – so manufacturers need to engage with it, rather than fear it.”
So is there a conclusion? In the end, it seems to be that integrating niche solutions is probably worth the pain, if the resulting gain is strategically important enough.
“A business’s unique selling point or competitive edge isn’t always going to be reflected in an off-the-shelf mainstream ERP system,” says Sally Waterston, director of business and IT consultancy Waterstons. “When that’s the case, an application that’s been designed for your particular industry or requirements has obvious attractions.”
But don’t make the mistake of thinking that you’re more unique than you really are, warns Neil Ferguson-Lee, solution architect at Microsoft Dynamics implementation specialist eBECS.
“Every company thinks that it’s different, but that doesn’t mean that they should go for a niche solution without careful consideration of how strategic that requirement really is,” he sums up. “Interfaces cost money, they need to be maintained, and they have an impact on the rest of the organisation, and on the budget.”
The more niche solutions you have, the riskier it is to knit them all together from a contractual point of view. That’s not to say, don’t do it - but do go into it with your eyes open
Paula Barrett, Partner, Eversheds
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W hen contemplating a new ERP system, it’s a safe bet that many manufacturers confine themselves to an evaluation of the ERP
systems under consideration, and of the vendors that are supplying them. Relatively little attention though, is usually paid to how the chosen system will be implemented.
Which can be a mistake, and a costly one at that. For when an ERP system fails, or under-delivers, the root cause is often not the system itself, but failures within the implementation process.
“A flawed initial diagnosis, poor process design, blurred accountabilities, and botched training and testing: each of these can cause an ERP implementation to fail or fall short of its objectives,”
warns Derek Duffy, a project manager with Microsoft Dynamics AX manufacturing specialists Columbus.
Accordingly, says Duffy, there’s recently been something of a sea change in implementation approaches - at least among savvier manufacturers.“Columbus has always followed a structured implementation approach but now there’s a growing awareness of the importance of implementation methodologies,” he explains. “Which is logical enough: our customers are hiring us for our implementation expertise, and our implementation methodology is the tool that enables us to harness that expertise, and deploy best practices to deliver an assured implementation.”
Indeed, stresses Duffy, a sound methodology is absolutely vital, if a manufacturer’s expectations in respect of their ERP systems are to be met. Look at instances where ERP isn’t delivering on its promise, he points out, and the problem can often be the choice of implementation approach, or the way that it has been followed – though the effect of rapid technology change should also be reckoned with.
“That’s why we’re sometimes asked to re-implement, following a failed implementation by
Planning for perfect ERP Look closely at a flawed ERP system, and you may find a flawed project plan, discovers Malcolm Wheatley.
Diagram showing the six phase master flow of
Surestep+
Specialfeature Columbus
For more information please visit: www.columbusglobal.com/uk 67
another reseller,” he notes. “It’s usually not the choice of system that was wrong, but how the business has gone about implementing it.”
And while an implementation methodology isn’t an absolute guarantee of success, it does heavily stack the odds in favour of success, explains Duffy.
“Simply put, a thorough and structured implementation methodology will deliver implementations that are more likely to come in on time, on budget, and be of the right quality,” he stresses.
Six-phase flowAnd Columbus itself, he explains, has recently updated its own ERP implementation methodology. Formerly known as Diamond, it’s now called SureStep+. A change of name that is far more than cosmetic, Duffy claims.
“Diamond was a distillation of our experience over twenty years and 6,000 ERP implementations,” he says. “But SureStep+ builds on that. We’ve taken Microsoft’s own Microsoft-specific SureStep methodology, and significantly enhanced it with the insights that were embedded in Diamond. It’s
aligned with Project Management Institute guidelines, and contains clearly defined roles and process ownership definitions, utilising recommended best practice. Better still, it uses fewer project control documents – so it’s more efficient – and has a multi-product capability, as well as offering a more detailed view of roles and responsibilities.”
So how does it work? Look at an ERP implementation following the SureStep+ methodology, explains Duffy, and you’ll see that it carefully follows a six-phase process flow.
The project starts with a diagnostic phase, where the business’s business requirements and project objectives are collected, and the project scope and approach determined and agreed. Then comes an analysis phase, in which the business’s existing processes and systems are evaluated, and shortcomings and improvements identified.
A design phase comes next, where the business’s new and improved ‘to be’ processes are laid out, together with the system steps that will turn these into reality, following any relevant best practices and pre-existing templates. Then, during the development phase, the ERP system is configured to deliver these processes, along with any required customisations, integrations and interfaces, and data migration scripts. Next is the deployment phase, in which activities take place to
prepare the system for ‘go live’ and hand-over to the business. During this time users are trained, data migration plans finalised, process testing is completed and the live ‘production’ environment set up and checked. The final phase, operation, sees the hand-over complete, and any required ‘go live’ support carried out.
rigour“Having a detailed methodology in the form of SureStep+ makes an enormous difference to a project, and helps to reduce risk while improving implementation quality,” emphasises Duffy. “Built on a structured and detailed analysis of customer expectations, it has comprehensive and disciplined documentation, provides clearly-defined roles and responsibilities, and has a rigorous approach to change management and resource allocation. In short, everyone knows what has to be done, and everyone knows who is responsible for doing it.”
Better still, he adds, that very thoroughness offers a layer of insurance against mis-steps in the project, once it is underway. “Members of the implementation
team are aligned with each other from the start, and are working towards the same goals and expectations,” he says. “What’s more, everything is well-documented, so that even if there are changes in the project team there is no data loss or delay. Plus, it includes a number of ‘project types’, enabling the approach to project management to be tailored to the size and complexity of the client’s business. And finally,” Duffy concludes, “it’s been proven on both national and international implementations, so you know it’s going to work in a cross-border environment.”
So how then, does Duffy sum up the importance of a methodology to manufacturers contemplating an ERP implementation?
“It’s absolutely vital, and you’ve simply got to have one if you want to succeed,” he says. “Part checklist, part project plan, and part ‘to do’ list, an implementation methodology says what’s got to be done, when, and who’s got to do it. And without formalising that, any ERP project is running an enormous risk.”
SureStep+ has been proven on both national and international
implementations, so you know it’s going to work in a cross-border environment
Derek Duffy, Project Manager, Columbus
Screen grab showing activity breakdown for different roles
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T he figures are chilling. The world, it seems, is likely to create more data in 2012 than in all the previous
five thousand years put together. And what’s more, the rate that this data is accumulating is doubling every eighteen months.
These assertions come from John Wilkinson, vice-president of business analytics for global ecosystem and channels at SAP. And he isn’t slow to point out the downside of this deluge of data.
“There’s a growing wealth of data with which to make decisions - but smaller businesses suffer a disproportionate challenge when trying to turn that data into actionable information,” he notes. “They must compete with much larger enterprises in order to analyse and exploit that data, but lack the same scale of resources with which to do so.”
A trusted product with a rich past is finding a new role as an entry-level business intelligence solution, finds Malcolm Wheatley.
Crystalclear
John Wilkinson vice-president of business analytics for global ecosystem and channels, SAP
Screen shot in Crystal Server showing drill down analytics of monthly sales data
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And for resources, read not just IT hardware and software, but also people and budget. Quite simply, data analytics is a skilled job, and one that demands appropriate toolsets and people with the time to sit down and use them.
But it doesn’t have to be that way, insists Wilkinson. SAP, as the world’s pre-eminent enterprise software company - and one that is now firmly targeting smaller enterprises - reckons that it is in a position to help level the playing field.
Look at the needs of smaller manufacturers, says Wilkinson, and their data analytics needs are simply defined.
For a start, they want data that is reliable. They also want it to be easily accessible, so that anyone who needs it can get at it. And self service availability helps, too: look, for instance, at the transformation that has been wrought by Google. Finally, when data has been analysed, it ought to be a simple job to share the findings with others – so that the insights gleaned can be actioned, or probed further.
“There’s a new type of data hungry user out there in the workplace, especially in the younger generation,” says Wilkinson. “They don’t expect to wait for the IT function to deliver what they want: they’ve grown accustomed to a world that is instant, and they want the answer now. And increasingly, they want it while they’re mobile, too.”
Stalwart performerSo how does SAP think it can deliver on this challenge? The answer, admits Wilkinson, may cause some surprise. In short, it’s the venerable Crystal Reports solution, a reporting - and now analytics - package that goes back to the early 1990s, and which was acquired by SAP in 2007 when the software giant bought business intelligence firm, Business Objects.
“Crystal has been a de facto standard for years,” says Wilkinson. “Many IT personnel
cut their teeth on it. But lately, when we’ve talked to people about Crystal Reports, they’ve been asking us if it was still under development. And the fault is ours: quite simply, we haven’t been investing enough in marketing and public relations.”
It’s an admission that isn’t without irony. For SAP most certainly has been investing in the Crystal product, as a recent flurry of announcements has made clear.
What’s more, adds Wilkinson, the company has also re-branded the product, with the successor release to from Crystal Reports 2008 now being called Crystal Server 2011.
“The change of name is intended to underline the fact that Crystal is now an entry-level business intelligence solution,” explains Wilkinson. “It has better graphics, better drill-down capabilities, multilingual reports and dashboards, guided data exploration, and full integration with Microsoft Office and Microsoft SharePoint.”
In short, among other improvements, usability has been enhanced through a Google-style search capability, with ranked responses; and a ‘hand-holding’ approach to data exploration now makes it easy for end-users to develop reports and filters without needing help from an IT function.
“We’ve brought Crystal Reports up to the same level of graphics visualisation as our other products and there are further advances to come later in the year,” enthuses Wilkinson.
IntegrationThe result, he insists, has been to transform what entry-level business intelligence can deliver to the smaller manufacturer.
“With Crystal, they’ve always had reporting, but now they’ve got ‘drill-down’ capability, and the ability to get to better decisions faster,” he says. “And users don’t need to go to the IT function if they don’t want to. Production
director, procurement director, or managing director, they could do it themselves, if they wanted, and if they possessed appropriate IT user skills.”
As SAP’s entry-level business intelligence solution, what’s more, Crystal Server has now become an integral part of SAP’s whole facility of business intelligence applications.
One immediate benefit of this is a re-written user interface for Crystal Server, providing a consistent ‘look-and-feel’ right across the solution range, thereby minimising training when upgrading. More importantly, perhaps, the consistent look-and-feel isn’t just skin deep, but extends to the inner workings of reporting and analytics.
“A report that a manufacturer might have developed in Crystal Reports 2008 or earlier is reusable in Crystal Server 2011, and is reusable in our mid-market SAP Business Objects Edge solution, as well as in our full large enterprise SAP Business Objects solution,” Wilkinson confirms.
And Crystal Server’s appeal, he adds, will extend well beyond the body of users who have been happily running Crystal Reports for years.
A new breed of customer is emerging, says Wilkinson: manufacturing companies that have put in place one or more of the various free, cloud-based or on-demand business intelligence products as proof-of-concept vehicles, now want to move forward as a business. Not just as individual departmental functions with separate toolsets and approaches.
“We’re seeing companies tell us: ‘We’ve got free chaos, and now we need to get control.’” sums up Wilkinson. “Our response? Crystal Server 2011. It’s delivered on its promise for over twenty years, and now it can for you, too.” In short, with a rich legacy behind it, Crystal Server seems assured of a promising future, too.
There’s a new type of data hungry
user out there in the workplace,
especially in the younger
generation
County Durham-based specialist glass manufacturer Romag, which produces photovoltaic glass, security glass, architectural glass and transport glass, has replaced existing IT infrastructure with a fully integrated 52 user ERP system based on Microsoft Dynamics AX, implemented by Columbus.
“We work in a highly competitive global market, and recognise that to stay ahead our business needs access to joined up, accurate and timely information,” commented Romag finance director Sean Brodie. “Dynamics AX from Columbus will enable us to make better decisions, based on real time data that will be easier to access and action.”
The Microsoft Dynamics AX solution replaces two older systems, GlassPro for specialist sales order processing in the glass processing industry, and a Pegasus Opera accounts package that previously managed financials, purchasing and invoicing.
“The Microsoft Dynamics AX solution that we’ll provide will allow for much greater integration and visibility,” sums up Columbus sales director Simon Charlton.
Just months after successfully exhibiting an outline concept car at the Shanghai Motor Show in April 2011, Volvo launched, to widespread critical acclaim, a full working model complete with interior at the Frankfurt Motor Show in September 2011.
It was an impressive feat - and now Autodesk design and visualisation software has been revealed as central to the successful design of the Volvo ‘Concept You’ car in question.
The project was an important one for Volvo under its new ownership, demonstrating a vision for a future in luxury car manufacture. Using
Autodesk Alias software, the concept modelling team was able to quickly create digital prototypes from the designer’s initial sketches, honing and testing the design on screen.
As a result, designers were able to get to the best design option, with respect to the technical surfacing and visualisation, of the car as quickly as possible, without having to start from scratch with every iteration.
Although the Volvo team was working under a particularly tight deadline, Autodesk has insisted that such timescales are becoming typical due to heightening competition in the automotive sector.
“Cars are becoming increasingly complex and sophisticated with a high technical content, yet manufacturers are under pressure to design them faster, while incurring lower costs,” said the company.
Mechanical and aeronautical engineering company, Portsmouth Aviation, selected IFS Applications 8 to streamline its operations and improve business agility.
In doing so it has become one of the first companies in the world to participate in the IFS Applications 8 Early Adopter programme, thereby benefiting from the enhanced features of the underlying IFS ERP system.
IFS Applications 8 includes a number of functional improvements, and was developed in close cooperation between IFS and its customers, according to IFS West European managing director Paul Massey.
“By participating in the Early Adopter programme, Portsmouth Aviation will influence the development of the application, and be one of the first companies in the world to enjoy its enhanced functionality,” he said.
An IFS customer since 2005, Portsmouth Aviation cites IFS Applications as a key enabler of both its recent transformation and its continuing growth.
“Everyone at the company logs into IFS Applications first thing in the morning, and uses it throughout the day,” commented James Greaves, systems manager at Portsmouth Aviation. “We’ve always found IFS Applications very usable, but improvements in IFS Applications 8, such as the new customisable data fields, will no doubt enhance our productivity even further.”
romag chooses Columbus for Microsoft Dynamics AX
Autodesk software delivers concept car in record time
Portsmouth Aviation first in uk to opt for IFS Applications 8
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Volvo’s ‘Concept You’. Photo provided by Autoviva.com
Have your say at www.themanufacturer.com
IT inmanufacturing
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Mike Evans, research director at industry analyst firm Cambashi, calls for evidence of real customer service utilising social media and a variety of two-way communications channels.
Most product designers understand that features and functions of their products should be determined with lots of input from prospective customers - most products are evolutionary rather than revolutionary.
As a consequence many companies have an enterprise application, usually part of Customer Relationship Management (CRM), which logs contact with customers and prospective customers. It should be easy to obtain input from these customers. However, current CRM system functionality is mainly about logging outbound communications rather than enabling two way communications.
Back in May 2011, a three year old girl wrote to Sainsbury’s to ask them why their Tiger Bread was not called Giraffe Bread because the distinctive rice paste pattern baked into the top looked more like a Giraffe’s hide than a Tiger’s Stripes.
In July, Chris King from the Sainsbury’s customer services team wrote back: “I think renaming tiger bread to giraffe
bread is a brilliant idea - it looks much more like the blotches on a giraffe than the stripes on a tiger.” He included a £3 gift card and signed the letter, “Chris King (age 27 & 1/3).”
The exchange was picked up on social media but quickly faded discussion. In January 2011 it re-emerged on Facebook and a flurry of comments was posted through other mediums. Interestingly, according to Laurence Borel of Blog Till You Drop, only 4% of the Internet comments were on News sites. Forums accounted for nearly half of mentions, Twitter about a third and Blogs the remainder.
Sainsbury’s responded quickly to change the labelling after what it described as “overwhelming customer feedback.” It was keen it really listens to customers and acts - the key to true CRM.
The story demonstrates that product managers and designers need to listen to a very wide variety of channels, and respond on them with an integrated approach. We’d like to hear from CRM or other application vendors how they would support such multi-channel, two-way communications.
Customer communications the Tiger Bread way
Young’s Seafood, the UK arm of food manufacturer, Findus Group, has chosen e-commerce applications from Kewill to transform its communications with its trading partners.
Jacquie Boast, European chief operations officer at Kewill has said the move will enable Young’s Seafood to manage critical business data across its many brands and trading partners through a single hosted platform.
Kewill MessageBroker, a fully hosted solution which connects any system to another for exchange and consistency of data, will be used
alongside Kewill Xchange, a B2B managed system for exchange of information with trading partners.
“The food industry is a diverse and ever-changing environment, so we required a resilient and responsive system,” says Tony Carr, IT director at Findus Group. “Kewill understood not just our requirements, but those of our trading partners.”
Brands that come under the Young’s Seafood umbrella include Young’s and Findus in the UK,
alongside multiple own label product ranges produced for customers. The end goal, explained Carr, is to achieve total centralisation of all business data, thereby integrating all the business’s brand divisions.
young’s seafood chooses kewill for e-commerce integration and order management
B2B eCoMMerCe
Young’s Seafood has implemeted Kewill’s technology to assist data sharing across its brand channels
Drives & Controls
The 2012 iteration of Drives & Controls follows on the most successful hosting of the event ever in 2010 when there was
a 16% rise in the number of exhibitors. And event organisers are confident that this year’s show will trump that record with over 103 exhibitors airing their wares in 2630m2 exhibition space and pulling in around 8600 visitors in combination with co-located events.
Registration for Drives & Controls 2012 has been building thick and fast. Old faces are in attendance with companies such as Siemens, Sick and Lamonde Automation making a good showing, but encouragingly for industry confidence, and reflecting a recently raised profile for the benefits greater automation could bring to UK manufacturing, there are also many first time exhibitors signing up.
UK newcomers include: Charter Controls, Sensor-Technik, Motion Control Products, British Encoder Products and Wieland Electric. While first-timers from outside the UK include the German industrial communications specialist Insys, the Finnish mechanical power transmission manufacturer Katsa, and the Dutch supplier of flexible conduit Anamet.
A highlight of this year’s Drives & Controls Show will be a pavilion organised by the European Power Transmission Distributors Association (EPTDA) and featuring up to 15 of its members. The pavilion will be modelled on one that the EPTDA has run successfully at alternate Hannover Fairs for more than a decade.
This will be the first time that the EPTDA has organised such an event away from Hannover. “It is a chance for our members to get a better grip on the UK market,” says EPTDA executive vice-president Hans Hanegreefs.
Supporting seminarsAs with most of the exhibitions being held at the NEC in April, Drives & Controls will complement the array of technologies and live projects on display with an informative series of seminars and workshops.
This year a focus on energy and safety will form the basis of an educational programme for delegates. This year’s seminar programme has been sponsored by CompAir and supporting industry associations include automation specialists Gambica and The British Fluid Power Association (BFPA).
Key topics to be addressed in this year’s seminar programme include:
Drive chain management as part of a best practice approach
Latest standards in the use of software and programmable safety
Green energy in general industrial inverters Getting the most out of your production machinery: optimising your power transmission drive system
Government incentives: Carbon Commitment Fund. Health and Safety Panel: EN 954-1 is dead long live EN ISO 13849-1
For detailed seminar information and to register please visit: www.drives-expo.com
72
From April 16-20 will media partner MACH, the UK’s largest machine tools expo, at the Birmingham NEC. But MACH is by no means the only attraction for manufacturing professionals at this venue next month. Here we take a look at the four concurrent events which, as a whole, will provide a comprehensive insight into manufacturing technology advances and best practice across industry disciplines.
More thanMACH
Have your say at www.themanufacturer.com
Specialfeature More than MACH
73
Plant & Asset Management
A further highlight of the co-location of events at the NEC in April this year is the launch
of the new event dedicated to the UK maintenance sector. Solely concerned with maintenance management, predictive maintenance and CMMS, Plant & Asset Management 2012 will address the needs of an important, but perhaps historically underserviced, professional group in the manufacturing industry.
Gaining an immediate groundswell of support from players in the maintenance sector, Plant & Asset Management 2012 has a strong line up of confirmed exhibitors including the British Compressed Air Society (BCAS - see 58 for more from this orgnaisation), and the Institution of Diagnostic Engineers.
In addition, and despite event booking only having opened in February this year, the Plant & Asset Management floor plan boasts a host of key industrial names. Leading companies that have already booked include: Flowcrete, Fluke, Icon Research, Idhammar Systems, Mistras, Schaeffler and Xetec – please visit the show website for a full listing.
Again, this exhibition will be supported by a focussed seminar programme with additional technical workshops covering a diverse range of topics, all relevant to the maintenance and asset management professional. Seminar and workshop sessions will be presented by industry experts from suppliers, trade associations or professional bodies and will include case studies from front line practitioners.
A few of the topics due to be addressed are: The early and accurate detection of rolling element bearing faults
Risk mitigation through strategic maintenance and reliability
Knowledge management and global asset management
OEE and effective asset management Linking maintenance and asset management
Commenting on the launch of Plant & Asset Management, Darrell Moffatt, part of the sales team at Abbey Wood Marketing and a partner to DFA Media for the show’s organisation says, “Only companies that have ensured that their physical assets - the plant and machinery on which their businesses depend - are fit for purpose, will benefit from economic upturn.”
Further details are available at: www.maintenanceuk-expo.com
Air-Tech and IFPeX
Air-Tech 2012 – the compressed air, vacuum, and generation industry’s event – and the International Fluid Power Exhibition (IFPEX 2012) will both be returning to their NEC home,
confident of their unique position within their respective sectors. Latest signatories to these events include a number of leading industry
names, among them: Gardner Denver, Abdex, Herose, AEP and IMM Hydraulics (UK). Gardner Denver will be showcasing technologies from its leading compressor brands over four separate stands. Among key products to be displayed by Gardner Dnever will be its newly launched 22 to 30 kW range of CompAir variable speed compressors. This will be the first time the new models are exhibited in the UK.
Abdex – the specialist manufacturer and distributor of high- and low-pressure hose assemblies – will be promoting the Uniflex range of crimping machines, plus workshop machines and production machinery. Abdex will also promote its offering of a free BFPA foundation course in Working Safely with Hydraulic Hose and Connectors to Uniflex customers. Abdex managing director Oliver Bain explains that the company is keen to ensure customers not only get the best from their Uniflex machine but also have the best knowledge related to hose best practice and safety at their disposal.
In addition to its activities at the Drive & Controls exhibition BCAS will also be exhibiting at Air-Tech and will be on hand to provide delegates with expert and impartial advice on compressed air system legislation, performance and best practice.
The society’s main focus for the show will be on its three key campaigns for the year: the new ISO11011 standard for compressed air system assessment, the importance of using genuine spare parts and the AirSAFE registration scheme, its customer review system.
Such was the success of the previous Air-Tech exhibition in 2010; BCAS has decided to increase its presence with a showcase stand at the 2012 event.
Chris Dee, executive director of BCAS explains its reasons for attending the exhibition: “Our membership figures are at an all-time high, and we see Air-Tech as the ideal arena for our members to network with each other”
“Air-Tech isn’t focused on one particular area of the compressed air market” he continues. “It covers the whole of the supply chain, from compressor technology through to practical applications. This is why it has become our exhibition of choice.”
For further information go to: www.airtech-expo.com or www.ifpex-expo.com
All images taken at the 2010 co-location of events at the Birmingham NEC
Are you looking for waysto diversify and growyour business?
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This exclusive one-day tour for business leaders andmanufacturing and engineering professionals is anexcellent opportunity to see and hear from the seniormanagement of the 2011 winning Manufacturer of theYear, and to see key areas of the company’smanufacturing and engineering site.
Cosworth will be opening its doors to just 35 delegates to illustrate the key factors that made them the winnersof this award. Participants will learn about the stepsCosworth have taken to change not only its markets and product offering, but also the way the business is led and developed.
Come and see thevery best in UKmanufacturing
THE MANUFACTURER OF THE YEAR FACTORY TOUR Thursday 14th June 2012 | 10:00-15:00 | Cosworth, Northampton
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Delegate fees: £295 +VAT per delegateEarly bird offer: £245* + VAT per delegate*if booked by 31st March 2012
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The Manufacturer magazine reserves the right to preclude delegates from participating in the tour due to the nature of information released. Please speak to Benn Walsh ifyou have any queries regarding conflicts with the host site. The Manufacturer magazine would like to thank Cosworth for the use of their facilities in hosting the tour.
Cosworth 3pp 14th June New:Layout 1 22/2/12 15:43 Page 1
The ultimate high technology showcase
Organised by The Manufacturing Technologies Association –
www.mta.org.uk
Nothing compares to Equator™
Renishaw plc New Mills, Wotton-under-Edge, Gloucestershire, GL12 8JR United KingdomT +44 (0)1453 524524 F +44 (0)1453 524901 E [email protected]
www.renishaw.com
- one gauge, many applications
To see Equator in action visit www.renishaw.com/gaugingapps or scan the code
The unique new Equator™ is a versatile alternative to
traditional gauging, offering inspection of an unprecedented
variety of manufactured parts. It has been developed and
proven on the shop-floor with industry-leading gauging users in
multiple industries and applications.
Nothing compares like Equator™
Benefits which can be gained by using Equator™ include:
• Reduced gauging costs
• Robust shop floor measurement process
• Reduced production bottlenecks
See us at:
MACH 2012
Hall 5, stand 5640
Renishaw Equator One Guage ad Manufacturer 0312 .indd 1 2/13/2012 2:53:51 PM
I f it has somehow escaped your attention, the technology showcase MACH 2012 takes place at the Birmingham NEC
between 16-20 April.TM has followed up February’s
MACH 2012 report with this special supplement on trade associations and the attractions on show for school children.
The ONS revealed in February that the number of people out of work in the UK is now at its highest since 1995, 2.67 million unemployed in the fourth quarter of 2011. But despite unemployment levels continuing to rise, many parts of the manufacturing sector are eager to recruit.
Semta, the sector skills council for science, engineering and manufacturing technologies, has claimed that the UK needs to recruit and train 82,000 engineers, scientists and technologists by 2016.This proves that manufacturing is a career path with plenty of opportunities.
MACH 2012 is intent on showing young people the future of manufacturing, putting the latest technology and methods of working on display as it hopes to inspire 1,500 young visitors to enter an engineering apprenticeship, degree or both. Tasked with stimulating the next generation of manufacturers at the show’s Education and Training Zone, the swashbuckling project to design and build a car that travels faster than a speeding bullet, Bloodhound SSC, and the Advanced Manufacturing Research Centre, which is bringing its MANTRA truck full of engineering simulation packages, share their plans to inspire ahead of the event (p79).
After the frank assessment from Bank of England governor Mervyn King that the UK would dip in and out of growth during 2012, TM takes time to evaluate how the voice of British manufacturing, the trade associations, think the country is faring on its journey to rebalance the economy (pp80-81). For many, MACH is not just a sales � oor but a soap box – a location for different expert organisations to publicise their interests.
In the national interest, Chancellor George Osborne’s ambition to narrow the gap between imports and exports has been boosted by news that the UK trade de� cit shrunk to its lowest level since April 2003 in December. As
Back to the futurethe euro zone looks set to achieve minimal growth at best in 2012, the shift in export strategy from Western Europe to the BRICs looks set to continue. Government agency UK Trade & Investment talks to TM (p81) to explain how machine tool makers and technology � rms at MACH can cash in on its industry-centred strategy in Russia, as it hosts
a stand with the event organisers MTA over the course of the show.
TM is proud to have been chosen to produce and run a seminar programme for this year’s MACH event. We are selecting presentations around the principal theme – The Next Five Years – and we’re looking for OEMs and Tier 1 manufacturers to present their plans for growth. This will focus on how suppliers in lower tiers can become more engaged with those higher up the chain.
If you are interested in getting involved please contact Will Stirling on 0207 202 4897 or email [email protected].
Enjoy the show and keep supporting manufacturing.
E D I T O R I A LThis report was researched and written by Tom Moore for The [email protected]
D E S I G NArt EditorMartin [email protected]
S A L E SSarah [email protected] Carel [email protected]
In order to receive your copy of the The Manufacturer kindly email [email protected], telephone 0207 4016033 or write to the address below. Neither the The MTA or SayOne Media can accept responsibilty for omissions or errors.
Terms and ConditionsPlease note that points of view expressed in articles by contributing writers and in advertisements included in this journal do not necessarily represent those of the publishers. Whilst every effort is made to ensure the accuracy of the information contained in the journal, no legal responsibility will be accepted by the publishers for loss arising from use of information published. All rights reserved. No part of this publication may be reproduced or stored in a retrieval system or transmitted in any form or by any means without prior written consent of the publishers.
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Copyright © SayOne Media 2012.
By Tom Moore, Reporter at The Manufacturer
Nothing compares to Equator™
Renishaw plc New Mills, Wotton-under-Edge, Gloucestershire, GL12 8JR United KingdomT +44 (0)1453 524524 F +44 (0)1453 524901 E [email protected]
www.renishaw.com
- one gauge, many applications
To see Equator in action visit www.renishaw.com/gaugingapps or scan the code
The unique new Equator™ is a versatile alternative to
traditional gauging, offering inspection of an unprecedented
variety of manufactured parts. It has been developed and
proven on the shop-floor with industry-leading gauging users in
multiple industries and applications.
Nothing compares like Equator™
Benefits which can be gained by using Equator™ include:
• Reduced gauging costs
• Robust shop floor measurement process
• Reduced production bottlenecks
See us at:
MACH 2012
Hall 5, stand 5640
Renishaw Equator One Guage ad Manufacturer 0312 .indd 1 2/13/2012 2:53:51 PM
Despite unemployment levels continuing to rise, many parts of the manufacturing sector are eager to recruit
TM MARCH MACH 2 SUPP.indd 3 22/02/2012 16:47:59
MACH 2012 PREVIEW PART TWO 077
Kids get an education in engineering
Paul O’Donnell, head of external affairs at the MTA, gives the lowdown
on how MACH 2012 can help to inspire a much-needed new generation of engineers.
‘‘T his year’s MACH will welcome a mixture of students from schools and colleges who are
already studying engineering, science and maths to visit the Education and Training Zone. We’re aiming to show 1,500 students between the ages of 14-19, who are looking to take the next step in their education, the path towards a rewarding career in manufacturing.
The MTA is producing online material for schools to access before, during and after the exhibition. We have linked online material to QR codes that teachers and students can access via smartphone devices. Following this up is vital so that MACH is not just an isolated event and an away day, but feeds into the national curriculum by bringing engineering to life and showing young people the potential careers that can be accessed from what they learn at school.
Plans to inspireWe hope to inspire the next generation of engineers through the use of practical demonstrations,
showing how these relate to a career in manufacturing. The education and training zone will centre on two inspiring displays, Bloodhound SSC’s supersonic car and the Advanced Manufacturing Research Centre’s MANufacturing TRAnsporter, or MANTRA, which has a 3D virtual reality centre. These two projects highlight that the technology at MACH is about as far removed from the smokestack image of manufacturing as you can get, and shows how modern manufacturing really is.
Importantly, the students’ tour of the exhibition will be led by an apprentice, someone they can really make a connection with. Students will hear about a career in industry from somebody who is actually doing it and only a few years older than themselves.
A lot of the schools who came to MACH in 2010 are really keen to come in 2012 and bring a new cohort of students with them, and we are also excited to get new schools and colleges involved. We expect that people who have worked in industry and have then
gone into teaching will bring their students along to MACH, as they did in the past. We will be giving out questionnaires speci� c to the Education and Training Zone this year so we can use the feedback to keep on improving the exhibition.
Is Britain on the right path? The MTA is very supportive of the Government’s focus on boosting the number of apprenticeships. To improve, we would like to see more engineering apprenticeships of a
duration and quality that people who work in engineering recognise. Industry would bene� t from having more three- and four-year programmes in place.
More needs to be done. We need to get
more people with technician-level skills into UK industry and ensure that we are training engineers who think that manufacturing is a good career for them.
There are concerns about the proposal to downgrade the status of design and technology within the school curriculum. The MTA is supporting a campaign called “I believe in D&T” being run by the Design and Technology Association. At a time when we are looking to boost growth and rebalance the economy with a stronger manufacturing sector, removing D&T from the list of statutory subjects is a backwards step.
Our members have written to MPs about this issue, as we are keen to ensure that D&T remains an essential part of the curriculum. Manufacturers need to try and build a head of steam to say that this is not an abstract curriculum problem but has a real effect in the real world.
Come to MACH 2012 – we promise you will be impressed and it will open your eyes to opportunities in manufacturing”.
Bloodhound SSC and MANTRA highlight that the technology at MACH is about as far removed from the smokestack image of manufacturing as you can get Companies are
crying out for talented people to come into industry Tim Chapman, Head of External Affairs at AMRC
Supersonic road into manufacturing
Dan Johns, materials, process and technologies engineer at
Bloodhound SSC, will be taking the project to design and build a rocketpropelled car to smash the world land speed record to the Education and Training Zone at MACH this year.
One of Mr Johns’ tasks on the project has been to develop and implement ways of using additive manufacturing, something he describes as the next big technology after composites. Unlike machining, where you take a block of material and machine it into a part, this process starts with nothing and adds material where you need it.
Johns says that the team has found many areas of the car where this technique can be used, removing the 90% of material that ends up as swarf when using conventional machining.
Bloodhound will be demonstrating this manufacturing method at MACH and Johns believes that the development of environmentally-friendly techniques such as this will engage young audiences well aware of green issues.
Johns says, “There has been a stigma attached to manufacturing but manufacturing and design are being brought into the same place with these new processes. In the future, engineers will be designers, material experts and
manufacturers. All these skills go together to make engineering a much more diverse role and creative process. The long term vision is that engineers and artists become the same thing. Bloodhound captures the imagination of young people to see this future.”
Johns plans to deliver the message that technology is transferable, elevating the importance of the engineer across all sectors, stating, “Young people will be attracted to engineering because it offers the freedom to enter a diverse range of industries, rather than being constrained to any one direction.” But for Johns’ next step, there is just the small matter of 5,000 to 6,000 components to � t on the Bloodhound car and a world record to break in 2013.
Also on display within the Education and Training Zone at MACH this year is the Advanced Manufacturing Research Centre’s (AMRC) Manufacturing Transporter (MANTRA) truck, a specially modi� ed HGV packed with the latest machinery and simulators.
Tim Chapman, head of external affairs at the AMRC, says that the zone’s remit to encourage careers in engineering is important because “companies are crying out for talented people to come into industry.” Mr Chapman explains: “The problem is that young people have seen their parents lose jobs in manufacturing and there didn’t seem to be a future in it, but we are trying to show them that it’s an exciting sector to be in with strong opportunities.”
Politics and industry recognise that we need to get back to making things in the UK and that if we are to be competitive we need to add more high value manufacturing. Chapman agrees and hopes that the high-tech gadgets on board the MANTRA truck, such as a virtual reality system to put together a jet engine, will “take the message to the next generation and build a sustainable manufacturing industry in the UK.”
With university fees increasing and the ever growing anxiety that a degree doesn’t always equal a high paid job, Chapman aims to show young people that engineering apprenticeships give great career prospects whilst being paid. The AMRC does as it preaches, taking on up to 200 young people a year and providing four year apprenticeship training after the launch of a new training centre in 2013. And the education is not strictly limited to apprenticeships, Chapman states that some of the technology researched and developed by the AMRC’s Process Technology Group can result in � rms saving up to 40% ef� ciency costs, adding that it is more than happy to talk to companies about technical queries.
Tom Moore talks with staff from Bloodhound SSC and the AMRC ahead of
their participation in the Education and Training Zone at MACH.
EDUCATION ZONE:
A student using a design simulation program inside the MANTRA truck
The Bloodhound car, which has toured over 400 schools across Britain since the project was announced in 2008
jet engine, will “take the message to the next generation and build a sustainable
–––VISIT–––
MACHSTAND
4398
In the Zone
1,500 students between 14-19 will attend MACH this year.
Over 60 schools will attend.
The exhibition tour will enable young people to visit up to 450 exhibitors with the latest technology from across the manufacturing sector.
The long term vision is that engineers and artists become the same thing Dan Johns, Materials, Process and Technologies Engineer at Bloodhound SSC
–––VISIT–––MACHSTAND4480
TM MARCH MACH 2 SUPP.indd 4-5 22/02/2012 16:49:39
MACH 2012 PREVIEW PART TWO 078
Kids get an education in engineering
Paul O’Donnell, head of external affairs at the MTA, gives the lowdown
on how MACH 2012 can help to inspire a much-needed new generation of engineers.
‘‘T his year’s MACH will welcome a mixture of students from schools and colleges who are
already studying engineering, science and maths to visit the Education and Training Zone. We’re aiming to show 1,500 students between the ages of 14-19, who are looking to take the next step in their education, the path towards a rewarding career in manufacturing.
The MTA is producing online material for schools to access before, during and after the exhibition. We have linked online material to QR codes that teachers and students can access via smartphone devices. Following this up is vital so that MACH is not just an isolated event and an away day, but feeds into the national curriculum by bringing engineering to life and showing young people the potential careers that can be accessed from what they learn at school.
Plans to inspireWe hope to inspire the next generation of engineers through the use of practical demonstrations,
showing how these relate to a career in manufacturing. The education and training zone will centre on two inspiring displays, Bloodhound SSC’s supersonic car and the Advanced Manufacturing Research Centre’s MANufacturing TRAnsporter, or MANTRA, which has a 3D virtual reality centre. These two projects highlight that the technology at MACH is about as far removed from the smokestack image of manufacturing as you can get, and shows how modern manufacturing really is.
Importantly, the students’ tour of the exhibition will be led by an apprentice, someone they can really make a connection with. Students will hear about a career in industry from somebody who is actually doing it and only a few years older than themselves.
A lot of the schools who came to MACH in 2010 are really keen to come in 2012 and bring a new cohort of students with them, and we are also excited to get new schools and colleges involved. We expect that people who have worked in industry and have then
gone into teaching will bring their students along to MACH, as they did in the past. We will be giving out questionnaires speci� c to the Education and Training Zone this year so we can use the feedback to keep on improving the exhibition.
Is Britain on the right path? The MTA is very supportive of the Government’s focus on boosting the number of apprenticeships. To improve, we would like to see more engineering apprenticeships of a
duration and quality that people who work in engineering recognise. Industry would bene� t from having more three- and four-year programmes in place.
More needs to be done. We need to get
more people with technician-level skills into UK industry and ensure that we are training engineers who think that manufacturing is a good career for them.
There are concerns about the proposal to downgrade the status of design and technology within the school curriculum. The MTA is supporting a campaign called “I believe in D&T” being run by the Design and Technology Association. At a time when we are looking to boost growth and rebalance the economy with a stronger manufacturing sector, removing D&T from the list of statutory subjects is a backwards step.
Our members have written to MPs about this issue, as we are keen to ensure that D&T remains an essential part of the curriculum. Manufacturers need to try and build a head of steam to say that this is not an abstract curriculum problem but has a real effect in the real world.
Come to MACH 2012 – we promise you will be impressed and it will open your eyes to opportunities in manufacturing”.
Bloodhound SSC and MANTRA highlight that the technology at MACH is about as far removed from the smokestack image of manufacturing as you can get Companies are
crying out for talented people to come into industry Tim Chapman, Head of External Affairs at AMRC
Supersonic road into manufacturing
Dan Johns, materials, process and technologies engineer at
Bloodhound SSC, will be taking the project to design and build a rocketpropelled car to smash the world land speed record to the Education and Training Zone at MACH this year.
One of Mr Johns’ tasks on the project has been to develop and implement ways of using additive manufacturing, something he describes as the next big technology after composites. Unlike machining, where you take a block of material and machine it into a part, this process starts with nothing and adds material where you need it.
Johns says that the team has found many areas of the car where this technique can be used, removing the 90% of material that ends up as swarf when using conventional machining.
Bloodhound will be demonstrating this manufacturing method at MACH and Johns believes that the development of environmentally-friendly techniques such as this will engage young audiences well aware of green issues.
Johns says, “There has been a stigma attached to manufacturing but manufacturing and design are being brought into the same place with these new processes. In the future, engineers will be designers, material experts and
manufacturers. All these skills go together to make engineering a much more diverse role and creative process. The long term vision is that engineers and artists become the same thing. Bloodhound captures the imagination of young people to see this future.”
Johns plans to deliver the message that technology is transferable, elevating the importance of the engineer across all sectors, stating, “Young people will be attracted to engineering because it offers the freedom to enter a diverse range of industries, rather than being constrained to any one direction.” But for Johns’ next step, there is just the small matter of 5,000 to 6,000 components to � t on the Bloodhound car and a world record to break in 2013.
Also on display within the Education and Training Zone at MACH this year is the Advanced Manufacturing Research Centre’s (AMRC) Manufacturing Transporter (MANTRA) truck, a specially modi� ed HGV packed with the latest machinery and simulators.
Tim Chapman, head of external affairs at the AMRC, says that the zone’s remit to encourage careers in engineering is important because “companies are crying out for talented people to come into industry.” Mr Chapman explains: “The problem is that young people have seen their parents lose jobs in manufacturing and there didn’t seem to be a future in it, but we are trying to show them that it’s an exciting sector to be in with strong opportunities.”
Politics and industry recognise that we need to get back to making things in the UK and that if we are to be competitive we need to add more high value manufacturing. Chapman agrees and hopes that the high-tech gadgets on board the MANTRA truck, such as a virtual reality system to put together a jet engine, will “take the message to the next generation and build a sustainable manufacturing industry in the UK.”
With university fees increasing and the ever growing anxiety that a degree doesn’t always equal a high paid job, Chapman aims to show young people that engineering apprenticeships give great career prospects whilst being paid. The AMRC does as it preaches, taking on up to 200 young people a year and providing four year apprenticeship training after the launch of a new training centre in 2013. And the education is not strictly limited to apprenticeships, Chapman states that some of the technology researched and developed by the AMRC’s Process Technology Group can result in � rms saving up to 40% ef� ciency costs, adding that it is more than happy to talk to companies about technical queries.
Tom Moore talks with staff from Bloodhound SSC and the AMRC ahead of
their participation in the Education and Training Zone at MACH.
EDUCATION ZONE:
A student using a design simulation program inside the MANTRA truck
The Bloodhound car, which has toured over 400 schools across Britain since the project was announced in 2008
jet engine, will “take the message to the next generation and build a sustainable
–––VISIT–––
MACHSTAND
4398
In the Zone
1,500 students between 14-19 will attend MACH this year.
Over 60 schools will attend.
The exhibition tour will enable young people to visit up to 450 exhibitors with the latest technology from across the manufacturing sector.
The long term vision is that engineers and artists become the same thing Dan Johns, Materials, Process and Technologies Engineer at Bloodhound SSC
–––VISIT–––MACHSTAND4480
TM MARCH MACH 2 SUPP.indd 4-5 22/02/2012 16:49:39
MACH 2012 PREVIEW PART TWO 079
The rush to Russia
GTMA
Tom Moore discusses how companies can benefit from being a member of an organisation with Adrian Haller, chairman at high speed presses maker Bruderer UK and the Metalforming Machinery Makers’ Association (MMMA). TM: What are the bene� ts of attending MACH as part of an organisation?
AH: Our 30-strong membership is stronger as a group and we can offer advice and knowledge
on employment law, health, marketing and growth plans. For MMMA, income is raised from subscriptions and by doing exhibitions such as MACH, where we offer stall discounts. The event is very important and an area where companies can benefit from being part of an association.
Companies can sometimes focus on looking at speci� c areas and markets and not always know the full story. We can provide data and solve problems with an informed view of manufacturing as a whole from people who have been there, seen it and done it.
TM: What does MMMA want out of MACH?
AH: MACH is very important because it puts companies in front of their market to showcase products. We want to show the whole of the UK and people travelling to the MACH
exhibition that UK manufacturing here to stay. We are here as a focus on manufacturing and plan to � y the � ag.
TM: Does MACH have a direct impact on sales?
AH: De� nitely. It has always bene� ted the companies taking part. We have invested in a big stand showing machines running this year, based on the fact that it is the Olympic year and we want to take advantage of the extra focus on the UK. You have to be there to get the exposure.
TM: What are the challenges for the metalforming machine tool makers?
AH: Strong competition between customers means that our margins are heavily reduced. In order to get the business, you have to sacri� ce margins. Business has more peaks and troughs now, it’s a very turbulent market.
Group pilgrimageGroup pilgrimage
–––VISIT–––MACHPavilionHall 4
Metalforming Machinery Makers’ Association
AIDA srl Stand No. 4430
ASC UK LTD Stand No. 4524j
AP & T GROUP Stand No. 4326
ATKIN AUTOMATION LTD Stand No. 4524
BRUDERER UK LTD Stand No. 4524A & 4625
BULLDOG INDUSTRIAL HOLDINGS LTD Stand No. 4531
CRESCENT MACHINERY LTD Stand No. 4524b
DAVIS (DECADE) LTD Stand No. 4524e
FORMIT LTD Stand No. 4524d
JM MACHINERY LTD Stand No. 4524h
JOSEPH RHODES LTD Stand No. 4524
MIDLAND POWER PRESS SERVICES LTD Stand No. 4524f
PRESSCARE UK LTD Stand No. 4432a
ROEMHELD UK LTD Stand No. 5240 Hall 5
SCHULER PRESSESUK LTD Stand No. 4522
SHEAR-FORM LTD Stand No. 4432c
TMA ENGINEERING LTD Stand No. 4432d
WORCESTER PRESSES LTDV Stand No. 4524n
If you looking for new Metalforming Machinery come and discuss your needs with our Members who offer products ranging from mechanical & hydraulic Presses, Pressbrakes, Sheet Metal Folders, Rollforming Lines in addition to load monitoring devices, tool clamping systems and an extensive range of coil feeding equipment. Many Members also specialise in the repair and maintenance of existing machinery across the full spectrum of the metalforming Industry.
VISIT OUR SITE WWW.MMMA.ORG.UK
WHY NOT VISIT THE MMMA VILLAGE AT MACH 2012 FEATURING THE FOLLOWING MEMBERS:-
GTMA is a UK-based trade association representing 40 companies in the precision engineering,
toolmaking, tooling technologies and metrology sectors. Here CEO Julia Moore stands up for the competitive viability of UK manufacturing.
Gauging the market at MACHThe level of success at MACH re� ects the state of UK manufacturing. It’s pretty buoyant right now so we are optimistic about the potential sales boost resulting from the exhibition. With exhibitor numbers up on 2010, GTMA will be using the show to look at new technology that may bene� t our members, acting as a link between customer and supplier.
The Southern Manufacturing engineering and electronics exhibition on 15-16 February was busy and vibrant so it is about time the BBC and others stop knocking manufacturing and report something other than doom and gloom.
There is a lot of work coming back into the UK. We are good at manufacturing advanced tools and it is cost effective for UK customers to have modi� cations carried out by a company based within the same country as substantial shipping costs can be avoided.
Knock Knock! Is support there?UK businesses have to maintain their competitiveness, which means producing in a competitive time at a competitive price. Members of our organisation would bene� t from tax allowances so that they can buy expensive capital equipment to optimise their competitiveness.
Across industry, small � rms have particular dif� culty when it comes to keeping up technologically
- banks are not interested in companies with fewer than 50 employees. But companies need money to develop and expand their businesses so GTMA looks to highlight other avenues to members. The short-termism of credit means that companies with full order books get shut down at the � rst attempt. This is the last thing that would happen in Germany.
While the success of the automotive sector is encouraging,
and increasing the number of orders at GTMA-member � rms, the tragedy in the UK is that companies do not have the skills base to support growth. Vince Cable points to the £1,500 apprenticeship incentive for companies to train new staff but only 40,000 � rms will bene� t. We’ve lost a whole generation.
Vince Cable points to the £1,500 apprenticeship incentive for companies to train new staff but only 40,000 firms will benefit. We’ve lost a whole generation
R ussia is the UK’s fastest-growing major export market, and the third-largest destination
for British made goods outside of Western Europe and North America. Opportunities in some sectors are unique in scale and thanks to recent economic modernisation by the Russian government, access to a market with 140 million consumers is gradually becoming easier for UK � rms according to UKTI.
Thawing in Anglo-Russian trade relations has become a major priority for UKTI in 2012 following
considerable success in improving opportunities since the turn of the century. Russian-bound British exports have been growing at an average of 21% a year since 2001 and was worth £4.78bn in 2011, a 39% increase on 2010.
Machinery and vehicle exports to Russia from the EU27 nations has soared from €26.5bn between January and September 2010 to €37.6bn for the same period in 2011. To capitalise on this UKTI has set up a number of activities across MACH to promote trade between the two countries, including a shared stand with MTA, a Russia Day Seminar and B2B meetings. The aim of the Russia Seminar
will be to highlight opportunities in a range of manufacturing sectors, with the needs of Britain’s distant European cousin marrying up with the UK’s long-standing
ability to provide advanced engineering solutions.With many companies at MACH heavily involved in
supplying to the UK’s large automotive plants owned by JLR, Nissan and Vauxhall, the B2B meetings available with UKTI provide an opportunity to explore possibilities in the Russian market place, both directly, and as suppliers to the aforementioned OEMs.
With two thirds of the Russian automotive market supplied by foreign imports or foreign assembly plants in Russia, there is plenty of room for one of the UK’s most buoyant sectors to bene� t from the strong growth that has been predicted. UKTI’s stall provides information across a range of supplier and distributor topics including insight into customs requirements and tariffs to accessing special economic zones.
Tom Moore talks to UK Trade & Investment (UKTI) about export opportunities for UK manufacturers in Russia and how the organisation’s activities at MACH will clarify routes to success.
Russia Today Population of 140 million UK exports to Russia equalled
£4.78bn in 2011 There are strong export
opportunities to Russia in the automotive, aerospace, defence and IT sectors
Prime Minister Vladimir Putin recently announced a £487bn budget to replace ageing Soviet weapons
TM MARCH MACH 2 SUPP.indd 6-7 22/02/2012 16:49:58
MACH 2012 PREVIEW PART TWO 080
The rush to Russia
GTMA
Tom Moore discusses how companies can benefit from being a member of an organisation with Adrian Haller, chairman at high speed presses maker Bruderer UK and the Metalforming Machinery Makers’ Association (MMMA). TM: What are the bene� ts of attending MACH as part of an organisation?
AH: Our 30-strong membership is stronger as a group and we can offer advice and knowledge
on employment law, health, marketing and growth plans. For MMMA, income is raised from subscriptions and by doing exhibitions such as MACH, where we offer stall discounts. The event is very important and an area where companies can benefit from being part of an association.
Companies can sometimes focus on looking at speci� c areas and markets and not always know the full story. We can provide data and solve problems with an informed view of manufacturing as a whole from people who have been there, seen it and done it.
TM: What does MMMA want out of MACH?
AH: MACH is very important because it puts companies in front of their market to showcase products. We want to show the whole of the UK and people travelling to the MACH
exhibition that UK manufacturing here to stay. We are here as a focus on manufacturing and plan to � y the � ag.
TM: Does MACH have a direct impact on sales?
AH: De� nitely. It has always bene� ted the companies taking part. We have invested in a big stand showing machines running this year, based on the fact that it is the Olympic year and we want to take advantage of the extra focus on the UK. You have to be there to get the exposure.
TM: What are the challenges for the metalforming machine tool makers?
AH: Strong competition between customers means that our margins are heavily reduced. In order to get the business, you have to sacri� ce margins. Business has more peaks and troughs now, it’s a very turbulent market.
Group pilgrimageGroup pilgrimage
–––VISIT–––MACHPavilionHall 4
Metalforming Machinery Makers’ Association
AIDA srl Stand No. 4430
ASC UK LTD Stand No. 4524j
AP & T GROUP Stand No. 4326
ATKIN AUTOMATION LTD Stand No. 4524
BRUDERER UK LTD Stand No. 4524A & 4625
BULLDOG INDUSTRIAL HOLDINGS LTD Stand No. 4531
CRESCENT MACHINERY LTD Stand No. 4524b
DAVIS (DECADE) LTD Stand No. 4524e
FORMIT LTD Stand No. 4524d
JM MACHINERY LTD Stand No. 4524h
JOSEPH RHODES LTD Stand No. 4524
MIDLAND POWER PRESS SERVICES LTD Stand No. 4524f
PRESSCARE UK LTD Stand No. 4432a
ROEMHELD UK LTD Stand No. 5240 Hall 5
SCHULER PRESSESUK LTD Stand No. 4522
SHEAR-FORM LTD Stand No. 4432c
TMA ENGINEERING LTD Stand No. 4432d
WORCESTER PRESSES LTDV Stand No. 4524n
If you looking for new Metalforming Machinery come and discuss your needs with our Members who offer products ranging from mechanical & hydraulic Presses, Pressbrakes, Sheet Metal Folders, Rollforming Lines in addition to load monitoring devices, tool clamping systems and an extensive range of coil feeding equipment. Many Members also specialise in the repair and maintenance of existing machinery across the full spectrum of the metalforming Industry.
VISIT OUR SITE WWW.MMMA.ORG.UK
WHY NOT VISIT THE MMMA VILLAGE AT MACH 2012 FEATURING THE FOLLOWING MEMBERS:-
GTMA is a UK-based trade association representing 40 companies in the precision engineering,
toolmaking, tooling technologies and metrology sectors. Here CEO Julia Moore stands up for the competitive viability of UK manufacturing.
Gauging the market at MACHThe level of success at MACH re� ects the state of UK manufacturing. It’s pretty buoyant right now so we are optimistic about the potential sales boost resulting from the exhibition. With exhibitor numbers up on 2010, GTMA will be using the show to look at new technology that may bene� t our members, acting as a link between customer and supplier.
The Southern Manufacturing engineering and electronics exhibition on 15-16 February was busy and vibrant so it is about time the BBC and others stop knocking manufacturing and report something other than doom and gloom.
There is a lot of work coming back into the UK. We are good at manufacturing advanced tools and it is cost effective for UK customers to have modi� cations carried out by a company based within the same country as substantial shipping costs can be avoided.
Knock Knock! Is support there?UK businesses have to maintain their competitiveness, which means producing in a competitive time at a competitive price. Members of our organisation would bene� t from tax allowances so that they can buy expensive capital equipment to optimise their competitiveness.
Across industry, small � rms have particular dif� culty when it comes to keeping up technologically
- banks are not interested in companies with fewer than 50 employees. But companies need money to develop and expand their businesses so GTMA looks to highlight other avenues to members. The short-termism of credit means that companies with full order books get shut down at the � rst attempt. This is the last thing that would happen in Germany.
While the success of the automotive sector is encouraging,
and increasing the number of orders at GTMA-member � rms, the tragedy in the UK is that companies do not have the skills base to support growth. Vince Cable points to the £1,500 apprenticeship incentive for companies to train new staff but only 40,000 � rms will bene� t. We’ve lost a whole generation.
Vince Cable points to the £1,500 apprenticeship incentive for companies to train new staff but only 40,000 firms will benefit. We’ve lost a whole generation
R ussia is the UK’s fastest-growing major export market, and the third-largest destination
for British made goods outside of Western Europe and North America. Opportunities in some sectors are unique in scale and thanks to recent economic modernisation by the Russian government, access to a market with 140 million consumers is gradually becoming easier for UK � rms according to UKTI.
Thawing in Anglo-Russian trade relations has become a major priority for UKTI in 2012 following
considerable success in improving opportunities since the turn of the century. Russian-bound British exports have been growing at an average of 21% a year since 2001 and was worth £4.78bn in 2011, a 39% increase on 2010.
Machinery and vehicle exports to Russia from the EU27 nations has soared from €26.5bn between January and September 2010 to €37.6bn for the same period in 2011. To capitalise on this UKTI has set up a number of activities across MACH to promote trade between the two countries, including a shared stand with MTA, a Russia Day Seminar and B2B meetings. The aim of the Russia Seminar
will be to highlight opportunities in a range of manufacturing sectors, with the needs of Britain’s distant European cousin marrying up with the UK’s long-standing
ability to provide advanced engineering solutions.With many companies at MACH heavily involved in
supplying to the UK’s large automotive plants owned by JLR, Nissan and Vauxhall, the B2B meetings available with UKTI provide an opportunity to explore possibilities in the Russian market place, both directly, and as suppliers to the aforementioned OEMs.
With two thirds of the Russian automotive market supplied by foreign imports or foreign assembly plants in Russia, there is plenty of room for one of the UK’s most buoyant sectors to bene� t from the strong growth that has been predicted. UKTI’s stall provides information across a range of supplier and distributor topics including insight into customs requirements and tariffs to accessing special economic zones.
Tom Moore talks to UK Trade & Investment (UKTI) about export opportunities for UK manufacturers in Russia and how the organisation’s activities at MACH will clarify routes to success.
Russia Today Population of 140 million UK exports to Russia equalled
£4.78bn in 2011 There are strong export
opportunities to Russia in the automotive, aerospace, defence and IT sectors
Prime Minister Vladimir Putin recently announced a £487bn budget to replace ageing Soviet weapons
TM MARCH MACH 2 SUPP.indd 6-7 22/02/2012 16:49:58
MACH 2012 PREVIEW PART TWO 081
83
Manufacturers need modern, slick, reliable logistics. Technology, such as automated warehouse systems and RFID, can provide the part of the solution. But the UK logistics sector is blessed with several stakeholders dedicated to improve the efficiency of your logistics. In this special feature, TM explores:
Planning for the London Olympic and Paralympic Games with Freight Transport Association Carbon Plan proves that industry is its own best referee for carbon emissions AMHSA’s Future Material Handling symposium debates big issues for automated warehouse management
World Couriers case study: Critical aircraft part is delivered to Paris CDG airport 4.5 hours after company receives the call
Palletised freight in Scotland and Ireland get a lift from Palletline’s new Scotland hub Benefits of outsourcing to 3PLs explained by the United Kingdom Warehousing Association
T h e M a n u fa c T u r e r ’ s g u i d e T o L o g i s T i c s
Whether you supply manufacturers or are reliant on those suppliers, the level of business preparedness ahead of the olympics at this stage in the game is
far from convincing. in a recent survey conducted by the fTa, transport
operators were asked by fTa to rate their olympic contingency plans. around one in four were ‘not at all prepared’ to hire additional vehicles or drivers to cope with greater volumes. While around one in six road freight operators had not made contingency plans with their customers, among them manufacturers, to deal with potential disruption on or around the central London road network. There is certainly information out there but it is not a complete picture and some information has come quite late in the day, such as details on the olympic route network. at the time of writing we are still waiting for all of the local area traffic management and parking plans around venues from the organizing committee Locog, and how boroughs will relax night time deliver curfews, which many in the industry see as an essential part of olympic planning.
for companies that rely on suppliers of parts for manufacturing, it is perhaps more worrying that under half of transport operators said they were ‘adequately prepared’ in terms of talking to their customers on contingencies for potential disruption within and outside the central London road network. While it should be noted that this figure was closer to a quarter in July 2011, at this rate there will still be some suppliers who are leaving it until the very last minute to make sure that all their bases are covered should something unexpected disrupt the supply chain this summer.
however, some logistics providers are rising to the olympic challenge. norbert dentressengle Transport services is one such company aware of the potential disruption the olympics will bring to the
normal movement of freight in and around London. as a major player in the supply chain, it supports everyone from global brands such as ford and coca-cola, to smaller uK manufacturers and their customers. They deliver to and collect from literally thousands of locations that will be affected by the olympics and Paralympics. Zac Brown, operations director, said: “We have access to huge quantities of data that mean that we know which collection/delivery points will be affected and when plus the usual volumes of freight involved - the next steps are working with our customers to mitigate the effects.
Contingency planning“We have a large owned fleet which provides the latest specifications to limit impact to the low emission zone; vehicle maintenance has been brought forward, and; fuel bunker preparations are in hand to avoid disruption. We have undertaken a full review of our infrastructure in the area to ensure we are fully prepared for the forthcoming disruption. our vehicles are also equipped with telematics – allowing us to see where they are and allowing us to re-route if needed.”
olympic planning might not require as onerous a solution as you might imagine; perhaps necessitating little more than arranging to receive goods and parts out-of-hours, for example. so, if your supplier hasn’t spoken to you about contingency planning yet it might be worth putting the call in yourself.
84
L o g i s T i c s a n d h a u L a g e s u P P L e M e n T
Business must get on starting blocks for olympic challenge
In just under four months the UK will host the largest and second
largest events in the world. Both the 2012 London Olympic and Paralympic Games present a huge challenge to the logistics industry that supplies manufacturers, especially in the South East. Natalie Chapman of the Freight Transport Association explains that while some companies are on the starting blocks, many have not begun to warm up.
it’s not all doom and gloom; olympic preparedness in the industry has crept up since we first asked these questions back in July last year, but it still falls way short of where it needs to be. a prolonged period of high demand – fTa is telling its members to treat the games and the Paralympic games like a three-month christmas period – against the backdrop of severe delivery restrictions poses a huge challenge. But there are things that transport operators can do right now to limit the impact and help make the uK’s games a transport success story.
1Check your known delivery locations against the TfL postcode list
available from www.tfl.gov.uk/developers (you will need to register)
2 If a postcode is affected, look at the ORN maps on the TfL website to
determine how that delivery point will be restricted. Even if there are no
additional restrictions to the delivery point, routing may be affected, so
check your current routes against the ORN maps. (www.tfl.gov.uk/orn)
3 Talk to your customers about how their deliveries may be affected next
summer. Ask for estimates of volumes. Can you deliver in a different way (Reduce, Retime, Reroute or Revise-mode)? (See www.tfl.gov.
uk/2012 for more ideas)
4 Consider how you will resource your business next summer. Plan
your scheduled maintenance to minimise vehicle down time during the
Olympics. Consider any changes to your staff holiday policy for the
Olympics. Do you need to hire in more drivers or extra vehicles?
L o g i s T i c s a n d h a u L a g e s u P P L e M e n T
85
YOUR LOCAL PLATFORM FOR EUROPE
• Comprehensive, daily UK and European distribution services • Connected to a European network of more than 200 branches • Fully bar-coded track and trace system • Locally-based, experienced and knowledgeable staff
For more information, please contact one of our regional branches to learn how DACHSER’s Intelligent Logistics can help your business.
Dartford: 01322 299615 Rochdale: 01706 758041 Northampton: 01604 666217 www.dachser.co.uk
5 Check if there are any other
operating restrictions that you need
to overcome. Are all the vehicles you will be using in London compliant with the new tougher Low Emission Zone standards which take effect in January?
Do you need to apply for a London
Lorry Control Scheme permit if
you wish to operate at night or at
weekends in London? Do you have
environmental restrictions at any of
your operating centres which will
prevent you from servicing your
customers at night?
Businesses unsure about how the olympics will affect the supply chain this summer should visit www.fta.co.uk/microsites/olympics/index.html or contact natalie chapman on [email protected].
2011 saw the challenge of climate change emerge as a potential solution to create green growth and employment by uK government.
a major publication known as the CarbonPlan was launched in december by the department of energy and climate change effectively drawing together all governmental policies, from transport to agriculture, in one strategy. The opportunity to encourage efficiencies and create new low carbon industries is at the forefront of the carbon Plan. But it is not just government that has the monopoly on good ideas on reducing greenhouse gas emissions. fifty-nine freight operators from 3PLs and retailers to small hauliers, waste companies and local authorities, have committed to record, report and reduce their carbon emissions and collectively reduce the carbon intensity of their freight operations by 8% by 2015 based on 2010 levels. fTa believes that when it comes to carbon reduction, industry is best placed to voluntarily report emissions and adopt decarbonisation measures that make commercial sense.
The recently published Logistics carbon reduction scheme (Lcrs) second annual report shows that given the opportunity to take action voluntarily, industry can and is making reductions in carbon emission levels. and the government agrees. in april 2011, Mike Penning, Transport Minister endorsed the scheme as a key initiative for industry to significantly reduce carbon emissions. at this time, there were just over 40,000 commercial vehicles covered by the scheme; by the publication of the second annual report, this number has grown to over 56,000. Between 2009 and 2010, there was a 2.6% reduction in emissions intensity when measuring carbon against vehicle kilometres. The beauty of the scheme is that participants have flexibility over reporting, they provide what data they have, and while some operators are just starting on the carbon journey, others are more advanced. operators are asked to supply simple data like the number of litres of diesel used by the company, number of vehicle kilometres, turnover and full
time equivalents, all on a strictly confidential basis. This is on a strictly confidential basis. The main requirement is that operators are consistent in their reporting and the Lcrs team are always on hand to answer any queries.
We also visit each operator at least once to discuss the company’s data submission in more depth to ensure that the data is robust and credible. This doesn’t mean sifting through fuel invoices but talking about how the data that is provided to the Lcrs is relied on within the rest of the business. The initial start-up data review was a key factor in securing the Minister’s endorsement for the scheme last year as there was confidence that the aggregated figures published each year are accurate and credible.
Join the freight reviewas the scheme enters its third year of operation, fTa has developed a framework to monitor the uptake of carbon emission reduction interventions from logistics. This is designed to support the datasets and provide core examples of how operators are cutting their emissions such as eco-driver training, reducing engine idling and making greater use of double deck vehicles. in the second annual report, the results of 2010 low carbon intervention survey
are published and reveal the measures that Lcrs participants are using to cut emissions the most popular carbon saving interventions that are being trialled. for instance, by extending the use of on-board vehicle telematics and using low carbon hgv technologies.
The Lcrs shows that the issue of carbon is being taken seriously by operators and reductions in emissions are happening. The scheme has succeeded in avoiding government taking regulatory action to make cuts in freight emissions. But there is still much to be done in growing the scheme to an even bigger critical mass. The department for Transport is committed to undertaking a FreightReview in summer 2012 to assess the contribution that industry is making to national greenhouse gas reduction targets. Lcrs will form part of the evidence to decide whether the government needs to look again at regulation. our voice will be much more influential, as the more transport operators join the scheme. The scheme is free of charge, open to all commercial vehicle operators, large or small, and collects simple datasets.
for more information, contact rachael dillon: [email protected]. To access the Lcrs second annual report visit: http://www.fta.co.uk/ and search Lcrs.
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voluntary scheme shows co2 reductions in supply chain are achievable
L o g i s T i c s a n d h a u L a g e s u P P L e M e n T
hosted by the automated Material handling systems association (aMhsa),
future Material handling on Wednesday May 2nd features an impressive line-up of speakers and will also provide a forum for logistics leaders to debate trends and technology, including the role of automation in reducing supply chain costs.
Expert insightThe symposium will kick-off with a keynote speech from Lord digby Jones. The former director-general of the cBi and Minister of uK Trade & investment will reveal his predictions for uK business in general and the logistics sector in particular. also taking the podium to share their invaluable experience will be Brian Mcdill, solutions and operational director at norbert dentressangle, Professor david Menachof of hull university Business school and Jason Keegan, head of general Merchandise Logistics at Marks and spencer.
Lively debatea Question & answer session will allow delegates to debate key issues, while lunch will provide ideal networking opportunities.
during the afternoon, delegates will benefit from three interesting focus study presentations, delivered by senior executives from Tesco, Microsoft and Lakeland Plastics.
Win a Silverstone driving experience The event will take place at silverstone’s brand-new conference centre and delegates attending the symposium will secure their chance to win one of three thrilling driving experiences at the legendary racetrack. The delegate rate of £120 plus vaT includes refreshments and a buffet lunch. for more details or to book one of the limited number of delegate places, visit www.amhsa.co.uk.
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future Material handlingconference will explore the future of logistics
L o g i s T i c s a n d h a u L a g e s u P P L e M e n T
The AMHSA Symposium 2012 in May is a one-day event that will bring together supply chain directors and senior managers to discuss logistics issues for the next five years.
Contact us:Frank Packman, BDM – EPL [email protected]
www.worldcourier.com/epl
When Precision Counts
Accuracy
Meticulous Two-Pronged Strategy Keeps Production AliveOnly 16½ hours stood between the 2,300-kilometre transport of 20 tonnes of materials from northern Spain to Frankfurt and shut-down of the production line at 00:30 Saturday morning. Working closely with the client, World Courier expedited the delivery of five tonnes of materials − enough to keep production running for the weekend − via charter air-craft, successfully delivering the consignment on Friday night. The re-maining 15 tonnes were conveyed by 18-wheeler to the French/German border. Due to a truck ban prohibiting large transport trucks on German motorways between 10:00 p.m. Saturday and 10:00 p.m. Sunday, the contents were transferred to two smaller awaiting vans. With an early Monday morning delivery, production never missed a beat.
Urgent quote:Call us now on Freephone 0800 289 839
Discuss our capabilities:Call Frank Packman on 07715 752817 or email [email protected]
Time-critical shipments
On good days, everything hums along according to plan. Assembly lines run without fail. Compo-nents are steadily funnelled onto the production floor from the just-in-time stock inventory. Aircraft engines roar to life. Ships are on course and on schedule. The off-shore oil rig is meeting its quota. The presses are rolling.
Suddenly everything stops. When a line goes down or critical equipment fails, the implications for business can be massive. World Courier’s speed, resourceful-ness and unparalleled customer service can get you up and running with the shortest possible delay.
At World Courier, we design ‘outside the box’ routings for each and every shipment, utilising a combination of first-flight-out transport, dedicated drive-aways, hand-carries and chartered aircraft to engineer the earliest possible delivery. No consolidation or bulk loading − ever.
Within 15 minutes, customers receive detailed scenarios of up to three transport solutions designed
to meet their needs and budget − in the most timely manner, even as a driver has already been dispatched for the pick-up.
Each of World Courier’s 140 offices in 50 countries operates 24 hours a day, 365 days a year including holidays and weekends. All calls are immediately for-warded to an experienced staff member regardless of the hour.
Execution is our strength. We are supremely in tune with our environment of local transport alternatives, suppliers, customs requirements, clearance capabili-ties and manpower, leaving nothing to chance. Each office has a team of fully trained couriers equipped for dispatch at a moment’s notice.
We have specialised in handling time-critical ship-ments since incorporation in 1969. Thousands of companies worldwide trust World Courier with their most urgent shipments; thus ensuring that their deliveries arrive on time, every time.
Case StudySunday, 17:15 − The engine failure of a com-mercial airliner in Paris spurs World Courier into action. Within 15 minutes of receiving the call, World Courier’s Sweden duty manager has mobilised a driver to retrieve the critical engine part and an on-board courier able to make the 19:15 flight to Paris, the last of the evening. Successfully coordinat-ing the paperwork, the driver, the courier, the flight reservations and the spare part, delivery to the wait-ing maintenance crew at Charles de Gaulle Airport was achieved just 4½ hours after the initial enquiry and 3½ hours after pick-up.
World Couriercustomized transport solutions | 150 offices in 50 countries | 24 x 7 x 365 | weekends and holidays | 15-minute response time | trained and experienced staff | ISO 9001 and ISO 14001 | group SOPs, QA and contingency planning | first flight out | dedicated drive-aways | onboard couriers | charters | same-day deliveries | pre-clearance | documentation, regulatory, carnets | door-to-door delivery | immedi-ate proof of delivery | dedicated staff communications | since 1969
J4868 WC EPL Ad and Advertorial_Precision_297x210 V3.indd 1-2 14/02/2012 13:30
Contact us:Frank Packman, BDM – EPL [email protected]
www.worldcourier.com/epl
When Precision Counts
Accuracy
Meticulous Two-Pronged Strategy Keeps Production AliveOnly 16½ hours stood between the 2,300-kilometre transport of 20 tonnes of materials from northern Spain to Frankfurt and shut-down of the production line at 00:30 Saturday morning. Working closely with the client, World Courier expedited the delivery of five tonnes of materials − enough to keep production running for the weekend − via charter air-craft, successfully delivering the consignment on Friday night. The re-maining 15 tonnes were conveyed by 18-wheeler to the French/German border. Due to a truck ban prohibiting large transport trucks on German motorways between 10:00 p.m. Saturday and 10:00 p.m. Sunday, the contents were transferred to two smaller awaiting vans. With an early Monday morning delivery, production never missed a beat.
Urgent quote:Call us now on Freephone 0800 289 839
Discuss our capabilities:Call Frank Packman on 07715 752817 or email [email protected]
Time-critical shipments
On good days, everything hums along according to plan. Assembly lines run without fail. Compo-nents are steadily funnelled onto the production floor from the just-in-time stock inventory. Aircraft engines roar to life. Ships are on course and on schedule. The off-shore oil rig is meeting its quota. The presses are rolling.
Suddenly everything stops. When a line goes down or critical equipment fails, the implications for business can be massive. World Courier’s speed, resourceful-ness and unparalleled customer service can get you up and running with the shortest possible delay.
At World Courier, we design ‘outside the box’ routings for each and every shipment, utilising a combination of first-flight-out transport, dedicated drive-aways, hand-carries and chartered aircraft to engineer the earliest possible delivery. No consolidation or bulk loading − ever.
Within 15 minutes, customers receive detailed scenarios of up to three transport solutions designed
to meet their needs and budget − in the most timely manner, even as a driver has already been dispatched for the pick-up.
Each of World Courier’s 140 offices in 50 countries operates 24 hours a day, 365 days a year including holidays and weekends. All calls are immediately for-warded to an experienced staff member regardless of the hour.
Execution is our strength. We are supremely in tune with our environment of local transport alternatives, suppliers, customs requirements, clearance capabili-ties and manpower, leaving nothing to chance. Each office has a team of fully trained couriers equipped for dispatch at a moment’s notice.
We have specialised in handling time-critical ship-ments since incorporation in 1969. Thousands of companies worldwide trust World Courier with their most urgent shipments; thus ensuring that their deliveries arrive on time, every time.
Case StudySunday, 17:15 − The engine failure of a com-mercial airliner in Paris spurs World Courier into action. Within 15 minutes of receiving the call, World Courier’s Sweden duty manager has mobilised a driver to retrieve the critical engine part and an on-board courier able to make the 19:15 flight to Paris, the last of the evening. Successfully coordinat-ing the paperwork, the driver, the courier, the flight reservations and the spare part, delivery to the wait-ing maintenance crew at Charles de Gaulle Airport was achieved just 4½ hours after the initial enquiry and 3½ hours after pick-up.
World Couriercustomized transport solutions | 150 offices in 50 countries | 24 x 7 x 365 | weekends and holidays | 15-minute response time | trained and experienced staff | ISO 9001 and ISO 14001 | group SOPs, QA and contingency planning | first flight out | dedicated drive-aways | onboard couriers | charters | same-day deliveries | pre-clearance | documentation, regulatory, carnets | door-to-door delivery | immedi-ate proof of delivery | dedicated staff communications | since 1969
J4868 WC EPL Ad and Advertorial_Precision_297x210 V3.indd 1-2 14/02/2012 13:30
in arbroath. Many of the new scottish Member companies have demonstrated real commitment to the Palletline concept, more than doubling their volumes of freight in less than 12-months.
introducing a fourth hub in cumbernauld to complement the network’s existing hubs in Birmingham, London and Manchester is expected to yield a range of benefits, from operational through to environmental.
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Pallet volumes have been growing steadily across scotland for over two years, supported both by
Palletline’s commitment to quality and reliability and by a targeted drive to grow the network’s membership north of the border.
over the same period, no fewer than five new member companies have joined the Palletline network, including aberdeen-based arr craib Transport and r T Mcewan
advantages will include reduced road miles and better efficiencies for scottish Member companies on freight bound for scottish destinations, combined with the introduction of additional services including a next day return service into ireland from scotland to meet growing customer demand.
“recent growth in demand has seen volumes reach a critical mass where it simply makes sense to consolidate freight in scotland rather than transport across additional miles to our other hubs,” says Palletline’s managing director, Kevin Buchanan. “The move is expected to be particularly valuable for Member companies serving the more distant highlands and islands locations, improving competitiveness, as well as enhancing the Palletline service for all scottish customers.”
new hub in scotland to enhance Palletline service north of the Border
Palletised distribution specialist Palletline continues to focus on developing its market leading operational model to enhance service levels and system efficiencies. As a result, the organisation implemented its first ever consolidation point dedicated to Scottish and Irish traffic on January 31, 2012.
Pa L L e T L i n e
Forfurtherinformation,pleasecontact: Palletline Plc The Palletline centrestarley WayBirmingham B37 7hB
Tel: 0121 767 6870 Web: www.palletline.com email: [email protected]
Palletlineinthenorth–Ataglance Palletline launches first consolidation point for scottish and irish traffic
five new scottish members have joined Palletline in last two years as pallet volumes grow
a fourth national hub at cumbernauld will reduce road miles, add services
next day return service from ireland to scotland
Driving performance and innovation in the pallet network sector, Palletline provides a vital link in the supply chain for customers
throughout the UK and Europe, guaranteeing consistent levels of quality and achievement.
www.palletline.com
The People Driving Palletised Distribution
PEAK PERFORMANCE
31470 Peak Performance Ad.indd 1 26/10/2011 14:26
seeking supply chain efficiency with 3PLs
The approach to supply chain optimisation has traditionally focused on one piece of the puzzle at a time. These can include sourcing goods and services strategically
to strike a balance between lowest material and transportation costs; maintaining the right mix and location of factories and warehouses to serve customer markets; and, using traditional logistics techniques to maximise distribution efficiency.
however, since the 1980s there has a been a sharp upturn in the number of companies that choose to outsource logistics and supply chain management functions to third party logistics service providers – or 3PLs.
Typically, 3PLs specialise in integrated warehousing and transportation services that can be scaled and customised to a customer’s needs.
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L o g i s T i c s a n d h a u L a g e s u P P L e M e n T
Third party logistics service providers, or 3PLs, can provide big efficiencies over in-house supply chain and logistics management. And Roger Williams, chief executive of the United Kingdom Warehousing Association, says their value is not just about stripping out costs.
3PL – benefits to considerWhat advantages should a company expect and look for when considering entering into a third party logistics agreement?
A healthier balance sheet - switching to a 3PL
removes the requirement for capital investment
in warehouses, materials handling equipment
and transport fleets, and the up-keep and
maintenance of these assets allowing financial
resources to be concentrated on other core
business areas. Operational flexibility - a 3PL will have the
resources to meet changing needs and the ability
to respond quickly to changes in the market
place. Cost savings - from economies of scale, more
direct routing, additional expertise, stricter
inventory control and, with improved technology,
a reduction in emergency shipments at premium
prices. Freedom to focus on core activities - a 3PL
provider will help to develop a company’s
long-term strategy to improve customer services,
reduce costs and improve efficiency leaving the
company to concentrate on it what it does best.
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L o g i s T i c s a n d h a u L a g e s u P P L e M e n T
The kind of service offered will be based on a client company’s unique market conditions, as well as the demands and delivery service requirements for the goods that the company produces and sells.
in today’s price sensitive market, the need to drive cost out of the supply chain is often cited as a major reason for using third party logistics service providers. But perhaps a better reason for engaging outside experts is the in-depth knowledge, flexibility and added value that a
specialist contractor can provide. as well as helping companies to achieve cost savings, a good 3PL will enable a business to enjoy shorter order cycles, better customer service and improved all-round business efficiency.
There is no question that an effectively managed supply chain can improve business performance and, if companies are going to succeed in an increasingly competitive and unpredictable environment, every link in the chain must operate at optimum efficiency. That’s why any company that finds that its fixed logistics costs are having a negative impact on its balance sheet simply has to consider outsourcing to a 3PL.
Members of uKWa – the leading trade association for the third party logistics industry – undertake an exceptional range of warehousing and added value services, from animal feed storage through bonded warehousing to e-fulfilment. But, regardless of the areas in which they specialise, the association’s members all share a determination to drive up professional standards in the warehousing sector. You can find a uKWa member capable of meeting your logistics needs by visiting the uKWa site – www.ukwa.org.net
“Any company that finds that its fixed logistics costs are having a negative impact on its balance sheet simply has to consider outsourcing to a 3PL”
roger Williams is chief executive officer of uKWa – a trade association representing the interests of 700 third party logistics services operators
Tel: 0207 836 5522email: [email protected]: www.ukwa.org.uk
It doesn’t matter where in the UK they are, your engineers are on average only two and a half miles from a ByBox location. With a network of 18,000 drop boxes at 1400 locations around the UK with a network in France and the Republic of Ireland also, we are the UK’s biggest, most accessible, most reliable in-night distribution network– one huge factor in helping us minimise your distribution costs.
EconomicalWe shrink your costs because your engineers travel less
Contact us now... www.bybox.com [email protected] 0844 800 5219
EfficientNext day delivery before 8am
Whether your goods are in a warehouse, a van or a Forward Stock Location most distributors can probably let you see all of your stock some of the time or, more likely, some of your stock all of the time.
But with ByBox’s Thinventory™ platform you can see all of your stock, all of the time.
Secure 100% visibility of stock
We care passionately about slowing global warming and believe we can play a key role in reducing our industry’s carbon emissions. Carbon emissions from our transport operations (accounting for 80% of our entire carbon footprint) are significantly lower than the industry norm. Here’s why:• We only deliver at night when there’s less traffic and
congestion so less gas is guzzled needlessly • We operate a consolidated drop system: multiple deliveries
into a single locker-bank stop; multiple returns collected simultaneously and fewer stops means less emissions
• We operate a late hub to let customers order from Thinventory™ and they tell us this cuts dramatically the number of inefficient sameday deliveries made by other, less efficient transport systems.
Greener Lower Carbon emissions
We deliver over twenty million parcels per year with near perfect reliability.
Our distribution is reliable by design, not by accident. Here’s why:• We have 100% dedicated distribution to predictable sites• We have a 100% ByBox-managed network• We have a 100% scan-validated track-and-trace system• We operate 24 hours a day, 7 days a week, 365 days a year• We have a midnight hub which supports an 11pm stock
order cut off.
It’s simpler
Supported by:
All companies featured will be entered into the MIA Award 2012
Manufacturing inactionPutting UK manufacturers under the spotlight
95
TSC Foods 96F o o D A N D D r I N k
North Lincolnshire–based food manufacturer TSC Foods was founded in 1991 by foodie entrepreneurs Chris Copestake and Paul Smith who had a bright idea for creating chilled and frozen soups and sauces.
Read on to hear about:
TSC Food’s £24m MBO
An innovation strategy which creates
1000 new product a year
Planning for around 760 SKUs
A continuos improvement programme for a manufacturing process with around 200 changeovers a week and high enforced downtime
recipe for growth
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GLORIOUS!THE company has changed
hands a number of times since its foundation. It was recently acquired in a £24 million management buy-out and is now owned by Key Capital Partners. The launch of the GLORIOUS! brand of chilled soups and sauces in 2008 has proved a real success within the highly competitive retail sector and the company has won three Grocer Gold Brand Excellence Awards and two Quality Food ‘Best Soup’ Awards in the past three years. A focus on manufacturing excellence and customer service has seen total business turnover climb from £35 million to £40 million in the past year, and is on track for £45 million this year.
Secret ingredients“TSC Foods is at the cutting edge of chilled and frozen food development,” says supply chain director Chris Taylor. Consumer taste is a constantly moving target and the company introduces 1,000 new products a year – three a day on average. But it’s not just a matter of throwing in a few spices or different vegetables for variety. The six-strong Process Development team has to ensure that the chefs’ tasty concepts are also produced consistently during manufacturing scale-up.
“We’ve increased our investment in the Process Team to ensure products can go efficiently from the kitchen to the plant, while ironing out any creases in process. There is a lot of complexity involved in introducing so many products. Our team ensures that all of the products we launch are ones we can make,” says Taylor.
Variety is certainly the spice of life, given the likes of Diablo Sundried Tomato and Chilli; Spanish Tomato and Chorizo; and New York Alfredo Sauce. TSC Foods has also increased its
TSC Foods at a glance
Award-winning soup and sauces manufacturer TSC Foods boasts a strong recipe for success in a competitive and complex market. The North Lincolnshire -based food manufacturer was founded in 1991 by foodie entrepreneurs Chris Copestake and Paul Smith who had a bright idea for turning a traditional batch process into a continuous process for chilled and frozen soup and sauce production.
Company TSC Foods, Scunthorpe
Staff 350 employees inc 40 temporary agency staff
Turnover £40 million (2010/11)
Products Chilled and frozen soups and sauces, risottos, dips, etc, including GLORIOUS! soups and sauces
Output 50% Retail, 50% Food Services; 25,000 tonnes a year, 1000 products a year
History Founded 1991
Owner KCP and management buy-out
Market Predominantly UK, low export levels
Share 11% of the UK chilled soup & sauce retail market; the largest manufacturer of soup & sauce to the food service sector
Niche Supplies retail and food services
Stats Retail - 60 SKUs Food Services - 700 SKUs
KPIs OEE: 35%-40%
OTIF 99% on-time in-full delivery
Branding GLORIOUS!
Food and drinkTSC Foods
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Complexity is one of the barriers to entry to this market
Chris Taylor, Supply Chain Director, TSC Foods
portfolio with a range of risottos, dips, dressings, gravies, marinades and an innovative new range of sous vide and pulled meat products.
TSC Foods serves both sides of the market, manufacturing chilled and frozen soups and sauces both for retailers and the food service sector including restaurants, hotels and pub chains. TSC Foods has invested in specialist technology to produce sauces in large scale with a variety of packaging options including pouches, dip pots, tubs and buckets, to one tonne pallecons. The company also produces large volumes of chilled products such as pasta, meat and fish sauces, soups, gravies and dips in a variety of shelf-ready packaging formats for retailers.
Handling complexityThere are three main business units within the North Lincolnshire site. The Flexibles Unit delivers products into the food service and food manufacturing market. The Pots Unit produces shelf-ready products for the retail market. The Deli Unit delivers innovative cold-filled
products including sauces, dressings, dips, marinades, sandwich fillings, couscous, salads and vegetables.
Planning and processing is complex, involving 60 SKUs on the retail side and about 700 SKUs on the food service side to cater for regular menu changes and reviews. “Products typically churn every six months,” says Taylor. OEE runs at 35-40 per cent as a lot of downtime is associated with cleaning. In any given week there will be over 200 changeovers. “Complexity is one of the barriers to entry into this market,” says Taylor.
Continuous improvement TSC Foods is working closely with food industry specialist Applied Acumen on a programme of continuous lean improvement. “Our main focus has been around labour planning, driving OEE through an increased level of planning activity,” says Taylor. “We are trying to maintain a better fixed plan. Historically there was a lot of movement in plan, and we are now trying to lock-down the next 24 - 48 hours as a firm schedule.” The company operates a CDC data capture system to analyse downtime in support of this initiative.
Taylor adds: “We now work to a fixed 48-hour plan, from raw materials through to the finished goods warehouse. The plan is to achieve an improved labour cost per tonne by planning the labour in more detail for the next two days and flexing the agency staff to suit.”
One of the company’s most valuable recent initiatives has come from focus on first line management. “The
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supervisors are critical to ensure that everybody is doing what they should be doing, in terms of adherence to procedures. So we are focussed on a retraining programme for all first line managers, and have introduced a higher level of technical auditing, working in partnership with the Kingsway Group,” remarks Taylor.
Health and Safety is crucial, and TSC Foods recently introduced a calendar approach to address a different topic each month, in accordance with a raft of historical data on where they need to focus, such as chemical handling and forklift awareness. “Auditing and supervisory training have proven vital to ensure that people adhere to set procedure and thus prevent errors,” Taylor comments.
Flavours of the worldTSC Foods is a very ‘foodie’ business. Innovation is paramount and the company likes to set trends as well as follow them. “We like to delight our customers, introducing up to three products a day is not untypical,” comments Taylor. The company markets ‘Flavours of the World’ in store as well as exhibiting at major consumer food shows like ‘Taste of London’.
Production processThe food production process is conventional and closely monitored to maintain high quality and efficiency. Raw material warehousing handles ambient, frozen and raw materials, including vegetables, meats, dairy products, spices and alcohols.
The preparation department consists of a batching process with weigh scales, ready for cooking. Cooking is carried out using 15 large 0.5-1.5 tonne cooking vessels. Last summer, £1.5 million was invested in two new BCH vessels, a CWM filler and a Starfrost spiral chiller to increase retail capacity, as this sector has been growing at about 15 per cent a year. Once the product is cooked, it is transferred to the fillers, which either feed into plastic pots for retail, film packaging for food service, or bulk filling into one tonne pallecons, buckets or pails for further processing by other food manufacturers.
Chilling is carried out either in brine cooling tanks for the film pouches or by spiral chillers for retail pots. There
is a fully automated cleaning-in-process (CIP) for pre-rinse, caustic rinse and final rinse between every product.
All products are manufactured to the high standards required for certification by the British Consortium Global Standards for Food. The company prides itself on using no preservatives or modified starches in the product.
LogisticsRetail delivery is carried out by Northern Food Transport or by local haulage for the food service sector. “We continue to work closely with our customers to optimise efficiencies throughout the supply chain,” says Taylor.
SustainabilityTSC Foods has made concerted efforts to move away from landfill. “We are now recycling finished goods waste. Contractors separate plastic from the product. Product is rendered and used for fertiliser and plastic is recycled. Furthermore, any raw material plastic is bailed for recycling.” Wastage of raw materials has been halved over the last two years. However, finished goods are more of a challenge as many products de-list each month.TSC has also taken measures to improve efficiency of the blast freezing units with better loading.
recession proofTaylor reckons that TSC Foods has managed to weather the recession well because it covers two distinct markets – retail and food service. “Consequently, when we saw a downturn in people going to pubs and restaurants, there was an upturn in retail demand. Nevertheless, we have managed growth in both sectors.”
Looking to the future, Taylor admits there is increasing pressure on margins driven by the rising cost of raw materials and energy. “However, as demand for the GLORIOUS! brand rises we have more control on production complexity.” With an aggressive growth plan of 15 per cent per annum, the future certainly looks GLORIOUS!
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Food and drinkTSC Foods
Have your say at: www.themanufacturer.com100100
Power of eCA diluted by state aid definition
For example, those the chemicals sector has managed to carve out in the Tees Valley.
However, several EZ ‘stakeholders’ agree that a cloudy definition of the treatment of business discounts is detaining investment decisions. LEPs can’t yet advise companies in these zones whether they will qualify for 100% ECAs, business rate relief or both, especially if the EZ is being driven by a large-scale project that already receives some state funding.
ECAs are not fait accompli in the six assisted zones. While the Humber LEP, for example, is confident ECA approval will be a formality, given the strengths of the offshore renewable energy and chemicals sectors in the zones, it is still a grey area that is impeding business decisions.
A significant barrier to the transition of capital into these ECA-eligible Zones, where they are most needed in England (EZs in other parts of the UK are being treated differently), is figuring out how different forms of government funding or relief are treated as state aid.
Mark Ridgway OBE, managing director of Group Rhodes and chair of the Leeds City Region LEP, says that from the introduction of ECAs it became clear that government was concerned that the EZ programme could lead to accusations of illegal state aid. “It is a major policy initiative and would undoubtedly be watched by officials in Brussels,” he says.
“The business rate relief is already set at the de minimis level, the point at which it is not considered relevant legally,”
I n November’s Autumn Statement, six Enterprise Zones were singled out for special treatment
(p38). Companies within these zones will benefit from the fabled Enhanced Capital Allowances (ECA), 100% tax relief on spending on plant and machinery, from April this year to 2017.
So is there a tide of new investment rising, preparing to unleash itself on the Enterprise Zones eligible for ECAs? The evidence is scant. As Michael Hellewell at the Sheffield City Region LEP and others point out, some of this information is commercially sensitive. And the risk averse environment hardly helps businesses to expand, or relocate, to the EZs.
Also, some companies targeting EZs are being driven by reasons other than tax relief, such as proximity to a large OEM or simpler planning processes.
lastwordThe
Exporting is not just about the weakness
of sterling and enjoying
a curry in India. It is
about business efficiency and productivity, which can
be improved through capital
equipment investment
Mark Ridgway, Group Rhodes
As assisted Enterprise Zones prepare to ‘open for business’ on April 1, confusion about the state aid treatment of Enhanced Capital Allowances and other discounts in these zones is holding back investment decisions says Will Stirling
Mr Ridgway adds. “If firms are offered additional state aid through capital allowances relief then there is a risk that it would be deemed to interfere with competition and therefore be illegal. There is greater flexibility to give more state aid in what are known as EU-assisted areas. Only Enterprise Zones in one of these areas have been allowed to retain [100%] capital allowances.”
EU-assisted areas are allowed to offer more state support as they are, in effect, deemed to be suffering from market failure. But this presents a quandary about how an EZ defines itself. “In fact, within the Leeds LCR our view has to be that as we are not a failing area we do not need to rely on capital allowances!” Ridgway adds.
EEF has argued that high capital allowances should be applied nationwide, not limited to EZs. “There is a need for a much more structured approach to enhanced capital allowances nationally, given the Government’s calls for greater levels of exports from the manufacturing sector,” says Ridgway. “Exporting is not just about the weakness of sterling and enjoying a curry in India. It is about business efficiency and productivity, elements that can be dramatically improved through capital equipment investment.
The LEPS and Councils running Enterprise Zones need to push HM Treasury harder for clarity on ECA status and the state aid treatment of discounts, so businesses that are keen to capitalise on EZs can plan accordingly, and soon.
In manufacturing, you understand that each link of the chain is only as good as the link before it. For the same reason, for your IT to drive real business value you need a partner that sees the world of IT in terms of complete business benefits rather than disparate technologies. It’s because of our comprehensive experience and consultative approach that Redstone is the trusted partner of choice for some of the most prestigious organisations across the UK. That’s also why we’ve brought you a business continuity supplement free with this magazine.
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MACH is owned and organised by The Manufacturing Technologies Association
MACH is the one event to attend in 2012 to see everything NEW for manufacturing. This is yourone opportunity to see all the latest products, developments and innovations for your specificsector. Uniquely, MACH is the only manufacturing exhibition in the UK where you can seeworking machines and live demonstrations all under one roof at one venue during one week.
Access to the event could not be simpler - just visit machexhibition.com and register foryour Fast Track Entry Pack.
Be part of the ONE event for manufacturing in 2012 - visit MACH.
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