Manufacturing, like many sectors, has a language all of its own. Malcolm Evans, chief executive of specialist funder The UK Manufacturing Accelerator, probes beneath the surface of some of the most prominent current terms.
(Mr Evans admits to a healthy streak of irony, partially in the interests of humour, but he makes the serious point that uncomfortable realities can often hide beneath over-used words. The opinions in his article are purely his own.)
Additive Manufacturing – building-up high hopes
Instead of machinery always removing (mainly cash reserves and clever possibilities), it’s now about building up instead (mainly expectations, that is. But isn’t it always the pick and shovel suppliers, rather than the wild frontier prospectors, who reap the biggest rewards during a gold rush?).
Additive Manufacturing – the deposition of material to build up a part, rather than machining it away – is highly exciting and it is rapidly changing certain production landscapes. But the technologies are increasingly available to anyone who can afford the acquisition costs and access skilled commissioning.
Winners with additive manufacturing will almost certainly be uniquely distinct from undifferentiated users of these powerful technologies; just using new technology is no guarantee of success. Where is the sustainability in any unique commercial advantage?
Conclusion: Addictively alluring and compulsively clever, additive manufacturing may indeed be a game changer……just not for everyone and probably not in quite the ways predicted.
Advanced Manufacturing – selling Britain by the dollar, euro and yuan
Red corner: Well, yes, it has certainly “advanced” quite a long way over the millennia, although the ancient bowmen of the steppes could still deliver a good lesson in the basics of composite engineering. But surely we’re talking more about “evolved manufacturing”, in the sense that all human knowledge and practice inevitably moves on.
Blue corner: Well, no, “advanced” truly is the right word in one key sense. For one thing is absolutely certain – the extent to which sophisticated overseas value chains have advanced around UK manufacturing. If it’s not direct or indirect ownership extracting the value, then the march of the foreign robots has all-but won the production day.
If you buy a modern machine tool, programme the CNC controller accurately, and machine metal off a billet you may well be called an advanced manufacturer. But 90% of the advanced bit is the capability of the machine tool itself – created in Japan, Germany, Switzerland etc. Does that make the machine shop who buys and uses it an advanced manufacturer, or just an engineering shop with trained staff?
Does it matter? Actually, to the manufacturing lexicon fetishists, it probably matters quite a lot. More importantly, it matters a good deal indeed to understanding the true dynamics of all manufacturing growth and hence it matters enormously to the bottom line of UK plc.
In a strategic sense, Advanced Manufacturing as a term perhaps had a more distinct meaning a decade or more ago. It was meant to differentiate the old world of Traditional Manufacturing, featuring labour-intensive and inflexible methods, from the brave new world of computers, with automation everywhere and far fewer people, particularly ones in oily overalls.
These days relatively basic manufacturing processes will frequently operate at more or less state-of-the-art levels of efficiency, certainly up to the limits of practical cost-effectiveness. Couple the UK’s relatively high labour costs, intense competition from overseas and the great clearing-out effect of the post-2008 economic crisis and there remains little room for outmoded practices. (Who these days would even consider using the term “computer controlled”? – What isn’t?)
Conclusion: Competitive manufacturing is the thing.
Advanced Materials – “Who will buy this wonderful …… ?”
Ah, one of the eight silver (plasma manipulated?) bullet technology sectors chosen by the government as potentially transformative of industry and of the economy itself. Given a big enough Catapult, some of them might even crash through the self-consciously overlooked (graphene toughened) glass ceiling between permanent academia and real commercialisation.
Though, even should a technology thus break through to commercial base camp, it then faces a mountain to climb in terms of appropriate funding….
Whatever. Of those Valley of Death investment issues, so many member projects of the Gang of The Magic Eight will always end up teetering on the edge of that perennial marketing chasm. Cleverness alone never sparks the commercial reception that justly proud inventors assume will greet them.
For example, we frequently see funding propositions for interesting new materials aimed at the construction industry. I’m often dismissed out of hand if I ask what the plans are for displacing the brick and the RSJ…..unless the inventors have already tried, in which case they know exactly what I mean.
Conclusion: Both literally and metaphorically, there is nothing ever set in stone to say that new materials are the way to go, just as there is nothing in stone to say that stone still can’t be the way to make it.
High Value Manufacturing – factories disappearing up their own extruders!
High Value Manufacturing has to some extent begun to supersede Advanced Manufacturing as a favourite word of the manufacturing gurus.
It boils down to a clutch of essentials to which all businesses need to aspire: decent and sustainable margins, clear competitive advantage, exceptional values and standards, and strong customer relationships.
“High Value Manufacturing” is at worst crude hyperbole but can probably best be seen as a critique of the relentless decline in British manufacturing (measured by % GDP, not productivity) in the c.40 year period to date, when there is now a clearer sense of desired manufacturing rebirth.
Sometimes a cruder usage of High Value Manufacturing concentrates almost exclusively on how high tech an operation is, as if there is certain value only in the highest technology layers.
This can be a very blinkered view of how demand and supply – and their support through capitalised production – actually works. High tech and high value are not interchangeable terms. Just think of Coca-Cola – low tech drinks manufacturer, fantastically high value operation.
Conclusion: “High Value Manufacturing” is one of those phrases which can create a fleeting feel-good factor if you don’t think about it too carefully. Great manufacturers simply are good, all of the time, however you look at them.
“I hope I will not be taken amiss if I say that workmen are often much wiser than their masters” Harry Brearley
Innovation – “Rip it up and start again”
Like the irritating but catchy chorus in a pop anthem, innovation chunters out relentlessly over the manufacturing airwaves. And ultimately it can be equally inane.
A meaningful definition of innovation may be always being on the lookout for good new ideas to implement well. But there is not a business in this world which does not ultimately live or die by that principle….but there are many other principles and they are all interdependent.
Innovation thus does not exist in isolation, much to the chagrin and debunking of the ranks of “innovation experts”.
It is just one narrow point of entry into a complex culture of sustainable commercial viability. This a fabric woven through skills, training, capital commitment, market intelligence, invention, procurement, trade savviness, R&D, export finesse, logistics, leadership acuity, management precision, technical confidence and ambition. All are important and none really takes priority over the others; successful manufacturers are intricate and sophisticated organisms.
The danger within manufacturing is that a stated guiding philosophy of innovation to the exclusion of other fundamentals can in practice mean a company which always seems caught-up in various R&D projects. It never quite manages to achieve breakthrough to any significant commercial scale.
Realities about the capabilities of the UK to develop rounded and winning innovation delivery demand the retelling of a story from exactly a century ago.
By 1913, Sheffield metallurgist Harry Brearley had invented – or, at least, majorly finessed – stainless steel. His disinterested foundry employers and a sceptical local marketplace resulted in the IP diffusing across an ensuing series of claims and counter claims from Germans, Americans, Poles and Swedes.
Harry Brearley later ruefully reflected, “The people in authority saw nothing of commercial value and still less of scientific interest in it. The rusting of iron is universally accepted and no one seems willing to accept that it can be overcome. I hope I will not be taken amiss if I say that workmen are often much wiser than their masters”.
All in all, a sorry tale of bright ideas conceived in the UK not being fully exploited and only gaining momentum after overseas players have scooped up a big slice of the IP and the formative commercialisation.
Conclusion: Surely there’s not the thinnest chance of this happening again 100 years later in this day and age…..not even a one-atom thick layer of carbon chance?
Onshoring (Reshoring) – “I counted them all out and I counted them all back
There is presently much talk about bringing back to the UK business functions and whole business units which were previously sent out overseas. Rising overseas labour costs, coupled with other factors such as quality issues, relatively low costs of UK capital and an increasingly favourable tax environment, make onshoring a growing trend.
But geographic consolidation is not automatically a compelling business proposition. It may be; it might make a good business great but it is highly unlikely alone to make a bad business into a good one. Many operations were offshored in the first place for good reason – these are frequently lower margin activities.
There’s a fuzzy romanticism around the subject. It’s comparable to the generations of work-hungry Irish emigrants to the US, or of Indians to Africa….. so many migrants, suddenly at several generations removed but still dreaming of “going home”.
But the diaspora is workers chasing work. Offshoring is work hard-headedly seeking out a return on capital. As is onshoring.
Conclusion: Onshoring can be fundamentally good for the UK in terms of employment and increased economic density. But some quasi-mystical march back to a promised land it most decidedly is not.
Supply Chain – strength in numbers, or a game of Jenga?
This a much used term and one which is frequently over-stretched. In broad terms a supply chain is the sum of multiple contributors to a finished product. A supply chain heads upstream to suppliers and downstream to customers.
How is this different to ‘normal’ supplier and customer relations?
This is a very good question and one that deserves careful consideration.
There is a true sense in which “supply chain” has distinct features. The end product is often highly complex and consists of multiple, highly specified parts. Typical supply chain-led sectors are aerospace, military and automotive. There will typically be a number of upstream suppliers and a number of downstream consumers, unusually closely-bound for separate commercial entities by common specifications.
Such supply chain relationship can bring stability and predictability. Equally they can bring constraints on profitability and on broader market possibilities and, in some cases, limited sustainability in terms of the ultimate finished product – and the its whole life cycle.
Recently, the term has slipped sideways in manufacturing-speak to include less formal and less complex supply/customer networks.
Adopting “supply chain-speak” within more open commercial relationships can shield a lack of significant options and plans within companies, whatever the opportunities it affords the supply chain advisory army to bring out its spirographs.
There’s a lazy credulity around the supply chain issue, even where it is correctly defined. A supply chain is simply a circumstance – it is a certain guarantor of nothing.
So it’s always back to basics – what are a company’s prospects? What are a company’s ambitions and capabilities?
Conclusion: Tied to a classic supply chain, or fighting in a more open marketplace, the key questions always relate to a manufacturing company’s connection to commercial success.