Go direct

The Manufacturer Directors’ Conference empowered and inspired industry leaders to tackle their challenges and targets head on in an environment of growing optimism and opportunity.

There were glamour models and economists, fish finger makers and nuclear submarine builders – what a motley crew we drew in to the Manufacturer Directors’ Conference 2013.

The two day conference was chaired consecutively by two of the UK’s leading industrial academics, Professor Rajkumar Roy, head of the manufacturing and materials department at Cranfield University and Professor Sir Mike Gregory, head of the Institute for Manufacturing at Cambridge University.

Their in-depth knowledge of the UK’s evolving industrial eco system helped contextualise the subject matter of speakers, bringing new developments in industrial strategy, trends and technology to the forefront of delegates’ minds

and challenging them to apply those developments to their business plans.

Broadening the scope of contextualised thinking, Neil Parker, market strategist at Royal Bank of Scotland, which acted as headline sponsor to the event, drew attention to economic patterns and forecasts.

His observations on the relative level of business investment in the UK compared to major global competitors should have given any investment-shy attendees pause for thought about their competitiveness, as should his challenge on exports.

“Developing economies will gain $55trn of spending power in the next 10 years as the balance of global GDP generation shifts in their favour and away from the developed world,” he observed. “How are you going to access that?”

Mr Parker also asked his audience of manufacturers to remain aware of economic developments outside their immediate sphere of business interest, sharing statistics on mortgage rates and the performance of the housing market and linking them to quality of life, job creation and demand for manufactured goods.

His information provided a strong sense of the social significance of the manufacturing industry and its interaction with other parts of the economy, providing a rounded foundation for the progression of business strategy for manufacturers in all sectors.

Against this background, two days of presentations and workshops helped manufacturers share experiences,

knowledge and ideas with peers in diverse sectors. Sessions were focused around key topics including supply chain management, marketing for manufacturing, reshoring and servitization. There was also a whole afternoon dedicated to the next generation of manufacturing which was led by young industry talent.

From the horse’s mouth: thoughts from ’s Next Generation workshop

Recent years have seen extensive comment, research and speculation on UK manufacturing skills gaps and

the industry’s ability to attract and retain talent due to its image with young people.

Too often however, conclusions are drawn with apparently little interaction with young people, or respect for the opinions they express.

TM decided to put young talent at the heart of the skills debate at MDC 2013 in an

afternoon workshop where they presented their reasons for entering the industry, how their current employers

managed to attract their attention and what will keep them loyal.

Speeches from David Firth, craft apprentice at Marshall Aerospace and Defence Group, John Butron, manufacturing engineering manager at Jaguar Land Rover and Cat Brownlie, project engineer at AkzoNobel confirmed that a well-established training scheme with a strong track record will give a young person confidence in stepping outside the

current education main stream to take a vocational route into industry.

Mr Firth shared how he was able to justify his rejection of a place at Sheffield University to his parents on these grounds, highlighting that Marshall has run its apprenticeship for almost 100 years.

For Mr Burton and Ms Brownlie, who both joined their employers as graduates, the promise of immediate responsibility, travel and clear career progression were primary motivators.

Ms Brownlie also stated emphatically that AkzoNobel’s commitment to sustainable and ethical business helped her pick it out as a desirable employer over and above other contenders for her attention.

While these messages are not a departure from most advice on recruitment and retention strategies, there is great power in hearing them from the horse’s mouth.

The confident and articulate presentations from these young people should have acted as

a wakeup call to delegates who do not provide apprentice training, or have wavered in their commitment to it.

It also makes clear that, whatever sceptics may say about young people’s work ethic, the best talent has high expectations around clarity of opportunity and career destination.

For a blog on the Next Generation session at MDC 2013 including details of 17 year old George Edward’s challenging presentation on the weaknesses in existing education outreach programmes go to bit.ly/Diectfromyoungpeople

Reshoring and Servitization

These were two of the hottest topics at MDC 2013 with a hands on, competitive workshop on day 1 challenging teams of delegates to develop a business plan with supply chain strategy for the manufacture of a range of products not currently made in the UK.

On day 2 a popular presentation from the animated Nikki Hesford provided insight into her experience of bringing production of her lingerie products back from China to the UK in order to launch her Made in Preston brand.

Ms Hesford’s move was primarily motivated by the trend for ‘fast fashion’ and said that reshoring had cut the concept to sale cycle time from around six months to six days as products could now respond to a fashion trend and take a design from drawing board to the hanger in less than a week.

Ms Hesford acknowledged that she was lucky that the equipment costs and facilities needed for her production processes made the task of reshoring easier than other manufacturers might find, but said that the cost of repatriating manufacturing of her products came to just £15,000. Unsurprisingly, she said finding skilled workers with good general business capability, like phone manner, was the hardest task.

The subject of servitization was first introduced by Professor Roy in his introduction to day 1 when he observed the UK’s relatively laggard approach to the provision of services around manufactured products compared to key global competitors.

The topic was tackled in earnest on day 2 however, when Professor Tim Baines guided delegates through the appearance of servitization as the new paradigm in industrial competition. He showed how organisational structure, business metrics and systems need to alter if a company is to move through the stages of providing basic, intermediate and advanced services.

Prof Baines showed profit models which demonstrated the strong growth trajectory manufacturers, large and small, can enjoy if they get an advanced service offering right. But, he warned, failure to acknowledge the need for changes to

organisational structure is likely to cause a company to “crash and burn” due to the heavy penalties usually attached to any failure to provide an agreed capability to the customer.

Baines further explained that the traditional KPIs of cost, quality and delivery were not necessarily the correct metrics

for advanced service providers because they were generally associated with the delivery of an artefact, not a capability.

Instead, Baines urged manufacturers exploring their servitization potential to build their metrics in collaboration with customers, discovering what improvements they were seeking to achieve and committing to deliver them.

In an interesting parallel to discussion at TM’s ERP Connect event – which took place concurrently with MDC 2013 – Baines highlighted that transactional ERP systems will need to integrate far more closely with technologies measuring product performance in the field in order to support profitable and efficient service provision by manufacturers.

Baines’ keynote was followed by two case studies from different sides of a servitized manufacturing business model. Mark Binns, group board director at transport and logistics company Hoyer, gave customer insight, reviewing the establishment of an advanced service contract between his business and truck manufacturer MAN.

Mr Binns was followed to the stage by Stuart Hayward-Higham, technical director at SITA (UK) who described the elevation his waste management organisation had achieved in recent years by transforming from bin men to industrial partners.

His presentation gave fascinating insight into the growing value of waste and SITA’s thirst to extend its reach and profits by putting technology in place that allows it to create new materials and energy products from a wider range of scrap.