UNLOCKING THE HIDDEN POTENTIAL OF MANUFACTURING Educating and upskilling employees on TCO

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CONTENTS

1. INTRODUCTION 3

2. THE SKILLS SHORTAGE 4

3. THE PERCEPTION PROBLEM 5

4. LIMITING THE IMPACT 6

5. ADDRESSING THE SKILLS GAP 7

6. CASE STUDY – RECOGNISING AND RETAINING TALENT AT SYTNER GROUP 8

7. COLLABORATING WITH INDUSTRY LEADERS 8

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INTRODUCTIONWith the industry going through a period of rapid change, UK manufacturers are under increasing pressure to increase output capacity while minimising unplanned equipment shutdowns. Machinery is being required to work harder, under higher temperatures, greater power density, and higher operating stresses.

As such, it is essential these companies find ways to increase productivity and maximise savings while monitoring Total Cost of Ownership (TCO)1, which is an important factor for businesses when it comes to extracting the best possible value from equipment assets.

To achieve this, it is important that companies address the industry’s skills shortage. It may not be a priority for manufacturers today, but it will be an industry issue in the long run, especially when it comes to TCO.

Building on the global Shell Lubricants 2017 report titled ‘Unlocking The Hidden Potential Of Manufacturing’2, this paper will highlight the third of three areas that UK manufacturers should address with respect to lubricants: educating and upskilling employees on TCO. As the manufacturing industry powers the UK economy, it is paramount that stakeholders work together to plug this skills gap. This paper will show how Shell Lubricants can support manufacturers via our team of experts, training tools and resources.

Other papers in this series explore how to prioritise the role of lubricants in your business, and leveraging new lubricant technologies to boost productivity.

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THE SKILLS SHORTAGE 61% of companies surveyed by Shell Lubricants see the skills gap as a significant challenge to the UK manufacturing industry

The skills shortage is particularly felt in the UK manufacturing sector, with Engineering UK forecasting the country will need 265,000 skilled entrants per year to meet demand for engineering enterprises through to 2024.3

61% of companies see the skills gap as a significant challenge to the UK manufacturing industry

THE IMPACT ON THE UK ECONOMY Three-quarters (73%) of UK manufacturers4 believe that if the UK fails to find a strategy to combat the shortage of manufacturing skills, it will have a negative impact on the UK economy within just one year. When looking 10 years into the future, the figure rises to 87%5.

When set against the landscape of Brexit, there is an even more pressing need for industry bodies, government and the education sector to act fast in addressing the UK skills shortage.

However, the first step towards a useful and workable solution is understanding the cause of the skills shortage in the UK.

NEGATIVE IMPACT ON THE UK ECONOMY

73%believe there will be a negative impact on the UK economy in the next year

78% believe there will be a negative impact on the UK economy in the next five years

87% believe there will be a negative impact on the UK economy in the next ten years

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THE PERCEPTION PROBLEM One of the biggest barriers to attracting and retaining talent is a problem of perception, possibly due to the lack of understanding of what modern manufacturing entails. Professional and service careers are often seen as more lucrative than skilled, technical careers.

Common issues cited among survey respondents included the perception of manufacturing jobs as ‘unglamorous’ (82%)6, concerns of the job ‘lacking in variation’ (80%)7, parents not considering a career in manufacturing as a successful job for their children (75%)8, and jobs being perceived as low paid (75%)9.

“The perception of engineering is one of the biggest challenges. We need to work together to encourage a better understanding of what an engineer is. For example, in road transport they are often seen as ‘grease monkeys’, but in reality they are now often working with computers and technology worth hundreds of thousands of pounds.”

Daniel Moir, Chief Executive, Society of Operations Engineers

TOP BARRIERS TO ATTRACTING NEW TALENT

% who think each of the following is a significant challenge to attracting new people in the manufacturing sector:

82%1 Jobs perceived as unglamorous

80%2 Jobs perceived as lacking variation

75%=3 Parents do not perceive manufacturing as a successful job for their children

75%=3 Jobs perceived as low paid

73%5 Perceived as a low skill job

72%6 Career progression perceived as being limited

69%7 Not enough opportunities to get involved in manufacturing

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LIMITING THE IMPACT Manufacturers understand that the skills shortage has an impact on the bottom line. It can also be seen to effect TCO, due to the impact on equipment maintenance practices, and the productivity of manufacturing operations.

One response to a shrinking talent pool may be to consolidate roles. This could create a strain on existing employees as they will be forced to work longer hours and cover additional tasks to meet demand. At times like this, companies may be under greater pressure to ensure productive operations in order to meet customer needs.

To avoid the risk that vital equipment maintenance is overlooked or performed incorrectly, it will remain important for companies to ensure that staff are equipped with the right skills.

When resources are stretched, companies may benefit from support from external suppliers. Through the Shell LubeCoach service, for example, companies can benefit from expert training in practical skills of effective equipment lubrication, tailored to meet the needs of employees. Empowered to make the right decisions about lubricant selection and management, staff can then help support the delivery of cost-effective, productive operations.

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ADDRESSING THE SKILLS GAP Manufacturing powers the UK economy, but for it to continue to thrive, industry, government and the education system must collaborate in combating the skills gap by training and attracting talented, bright employees, equipped with the right skills to drive the UK economy forward.

Close to nine in 10 (89%) UK manufacturers10 surveyed believe that one way of addressing the skills gap is by supporting apprenticeships and training programmes to attract talent.

TACKLING THE SKILLS GAP % who believe each of the following are important in getting people to consider a career in the manufacturing sector:

90% Government investment in STEM (science, technology, engineering and mathematics) education

89% Government support for manufacturers in developing apprenticeships and training programmes

89% Universities promoting STEM subjects

89% Secondary schools doing more to prepare students for careers in manufacturing

84% Manufacturers developing graduate programmes to attract new talent

77% Primary schools doing more to prepare students for careers in manufacturing

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Set up in 1968, Sytner Group has over 140 car dealerships across the UK, representing some of the world’s most prestigious car manufacturers. It relies heavily on its graduate and apprenticeship programmes, employing over 200 apprentices and 150 graduate recruits every year.

Sytner Group has recognised that something needs to be done to continue to attract the best young talent into the manufacturing and engineering industries. “A structure needs to be created, enabling us to target the next generation engineers. College and school leavers are feeling apprehensive and lacking confidence and quite often there isn’t a natural stepping stone to help guide them through,” explains Andrew McLeod, Sytner Group Divisional After Sales Specialist.

Working with Shell Lubricants, Sytner Group initiated the Elite Technician Challenge Programme, recently piloted in the Sytner Specialist Division, which services exclusive brands like Ferrari, Bentley and Porsche.

As part of the challenge, 100 technicians from each team completed an initial theoretical test accredited by the Institute of the Motor Industry. The three highest scoring entrants from each brand then participated in a final challenge, which included both theoretical and practical tests. The aim of the Elite Technician Challenge is to recognise and encourage talent, with the ambition of attracting the best applicants to the business.

“The programme recognises our competing technicians for their outstanding skill, experience and valued contribution. It also helps motivate and retain our best performers, while attracting new technicians with high-level skill sets to the company,” explains Melvin Rogers, Director of Human Resources for Sytner Group.

The pilot will be rolled out nationwide, with 1,500 technicians eligible to enter as of 2018.

The UK government, aware of this urgent need, has committed to deliver three million new apprentices by 2020. In 2017, it introduced a ‘levy’ which will help to finance more apprenticeships. This runs alongside the government’s Trailblazer scheme, where groups of employers work together to design new apprenticeship standards for occupations in their sectors, ensuring that schemes provide employees with the right skills for their chosen career.

The good news is that a sense of optimism is slowly being felt in the manufacturing sector. There are signs that perceptions of a career in manufacturing are gradually changing. The 2017 State of Engineering report revealed that the proportion of young people aged 11 to 16 who would consider a career in engineering has risen from 40% in 2012 to 51% in 2016, with the vast majority of teachers (96%) recommending a career in engineering to their pupils11. This is positive news for the manufacturing sector, which is a major recruiter of engineering graduates.

CASE STUDY – RECOGNISING AND RETAINING TALENT AT SYTNER GROUP

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1Total Cost of Ownership (TCO) is defined by Shell Lubricants as the total amount spent on industrial equipment, including cost of acquisition and operation over its entire working life, including costs of lost production during equipment downtime

2This study into lubrication procedures in the manufacturing industry was commissioned by Shell Lubricants and conducted by research firm Edelman Intelligence. It polled 493 manufacturing industry staff who purchase, influence the purchase or use lubricants / greases as part of their job across 8 countries (Brazil, Canada, China, Germany, India, Russia, UK, US)

3Engineering UK. (2017) The State of Engineering 2017

4This survey, commissioned by Shell Lubricants and conducted by research firm Edelman Intelligence, is based on 100 interviews in the UK Manu-facturing sector with Senior Engineers, Operations Directors and Procurement Managers from UK manufacturing companies in December 2016

5This survey, commissioned by Shell Lubricants and conducted by research firm Edelman Intelligence, is based on 100 interviews in the UK Manu-facturing sector with Senior Engineers, Operations Directors and Procurement Managers from UK manufacturing companies in December 2016

6This survey, commissioned by Shell Lubricants and conducted by research firm Edelman Intelligence, is based on 100 interviews in the UK Manu-facturing sector with Senior Engineers, Operations Directors and Procurement Managers from UK manufacturing companies in December 2016

7This survey, commissioned by Shell Lubricants and conducted by research firm Edelman Intelligence, is based on 100 interviews in the UK Manu-facturing sector with Senior Engineers, Operations Directors and Procurement Managers from UK manufacturing companies in December 2016

8This survey, commissioned by Shell Lubricants and conducted by research firm Edelman Intelligence, is based on 100 interviews in the UK Manu-facturing sector with Senior Engineers, Operations Directors and Procurement Managers from UK manufacturing companies in December 2016

9This survey, commissioned by Shell Lubricants and conducted by research firm Edelman Intelligence, is based on 100 interviews in the UK Manu-facturing sector with Senior Engineers, Operations Directors and Procurement Managers from UK manufacturing companies in December 2016

10This survey, commissioned by Shell Lubricants and conducted by research firm Edelman Intelligence, is based on 100 interviews in the UK Manu-facturing sector with Senior Engineers, Operations Directors and Procurement Managers from UK manufacturing companies in December 2016

11Engineering UK. (2017) The State of Engineering 2017

COLLABORATING WITH INDUSTRY LEADERS A key part of providing solutions to meet the ever-changing needs of manufacturers is the long-standing relationships that Shell Lubricants has with many original equipment manufacturers (OEMs).

Shell Lubricants works closely with many of the world’s leading OEMs and industrial committees. Collaborating with the companies that are leading technological advancements in general manufacturing helps shape the development of advanced lubricants designed to help customers get the best out of their machinery.