Growing pains – overcoming competition, economic barriers and technology challenges

Posted on 3 Feb 2012

How do companies overcome competition, economic barriers and technology challenges to grow in size and wealth? Lucky breaks and good connections in the right circles provide turning points for many businesses. But there is a more precise science to success. TM investigates thought leadership on the mix of policy, strategy, investment and leadership development need for the rise of UK manufacturing.

In the face of adversity

Speaking with TM ahead of his participation in EEF’s first national conference on March 6 Sir Richard Needham, chairman of Aiden Rubber, former independent director of international and commercial affairs for Dyson and president of the British Exporters Association, talks frankly of the decisions he has taken and facilitated during his career in pursuit of success for the companies he has represented. “Much against my own emotions I fully supported Dyson’s decision to move manufacturing to the Far East and I was behind the decision to move one of Aiden Rubber’s factories from Melksham to the Czech Republic.”

Explaining why this became a necessity for these ambitious organisations Sir Richard says, “There are a whole raft of things. It costs a hell of a lot less to build a factory in the Czech lands or in Malaysia than it does here because you don’t have ludicrous building regulations. And then there is employment legislation, a lack of educational qualifications and energy costs. Add in a generally poor engineering infrastructure where all the major tool makers are overseas and it become really difficult to imagine a rebalancing of our economy.”

This summary of the challenges facing home grown British manufacturing is far from inspiring, but Sir Richard quickly clarifies that he is not planning to participate in EEF’s conference simply in order to encourage all delegates either to pack in their businesses or up-sticks overseas.

He is keen to challenge other speakers from across the UK political divide on their understanding of the industry and comments, “of course I would love to bring business back to the UK – but in order to do that I would need to have certain internal requirements and I would need to see the environment change.” Needham explains further, “I would bring back areas of manufacture that require patent protection, which are high value added, which are manufactured with highly automated processes and which fit into key parts of productdevelopment. An example of this might be Dyson’s motors. I don’t see any reason why these should be manufactured outside the UK.”

The science of success

In laying out his criteria for home-shoring, Needham neatly summarises the strategic and operational priorities delegates at EEF’s event will be encouraged to consider in order to differentiate themselves and compete with peers around the globe. In particular the need for innovation in high value added products and processes will be stressed and the means by which UK manufacturers can afford to invest in better automation will be explored.

“It is horrendous that we sell more to Ireland than we do to China and India combined” – Sir Richard Needham, Aiden Rubber

Practical advice around the former issue will be available in a group of workshops and presentations to be chaired by Professor Steve Evans of Cambridge University’s Institute for Manufacturing. “We are just scratching the tip of the iceberg with the companies we work with who are aware of the help they can get from government, the Technology Strategy Board and Research Councils to support and guide their innovation strategies,” he says. “These companies represent a privileged few who are adept, or are becoming adept, at negotiating the fragmented support landscape. They are getting to grips with techniques like technology roadmapping and inclusive design for innovation strategies that make the most of internal and external resources.”

Speaking of the approach he will take to leading EEF’s innovation sessions Prof Evans describes an intention to focus on the practical, “I will encourage speakers to lay out what they have learnt – to detail what worked for them and what didn’t, but not to advise on what they think others should do.”This, suggests Evans, is a subject for discussion in networking sessions and ultimately a decision that rests on the detailed knowledge of an organisation held by its senior management.

Barriers to improving operational excellence
Barriers to improving operational excellence

But these individuals have to take decisions in an increasingly complex environment and Andrew Kinder, director of product and industry marketing at software vendor, Infor is keen to discuss this dynamic with organisational leaders in March.

“Adoption of the right technology strategy offers the promise of easing complexity challenges and liberating innovation,” says Kinder, going on to point out the way in which certain technology choices can enable companies to leverage complexity to their advantage or, in other cases, create a disruptive shift and “allow new and different ways of working that were not conceived of before.”

Having said this Kinder is not blind to the problems that technology can cause nor to the cynicism with which many in business have come to view IT in particular as it repeatedly fails to deliver the game change promised on sale. “In some cases, technology is part of the problem rather than being part of the solution – IT complexity now appears in the top three of inhibitors to operational excellence” comments Kinder, referring to the results of recent research undertaken by Infor in partnership with manufacturing focussed branch of analyst firm IDC Insights (see chart).

In his keynote presentation Kinder hopes to explore why this is so by touching on the route of technology progression and business modelling since the 90s. Kinder’s goal is to establish a framework in which “technology strategy is pro-actively planned alongside the innovation strategy as well as the overall business strategy.” A case study from one of Infor’s customers later in the day will allow delegates to see how Kinder’s arguments have been taken on in reality.

The end game

The development of capability, throughout UK manufacturing, to cope with rising complexity, advancing technology, shifting business models and the expectation of a nation looking to rebalance is the fundamental raison d’etre for EEF’s first national conference event. This will be no easy feat and will require a significant shift of mindset in the country’s SME backbone in order to create a supply chain and industry infrastructure capable of supporting competitive manufacturing for global investors.

For the moment a primary blocker is the immense imbalance of trade in the UK and an over reliance, for those that do export, on traditional markets. Needham expresses clear views on this point. “Why is it that we do not sell anything like enough to the emerging markets? It is horrendous that we sell more to Ireland than we do to China and India combined. What do we need to do to get companies better at exporting – particularly small and medium sized businesses?” he asks.

Undoubtedly this will be a hot topic for debate at the conference itself and, with UKTI supporting the event and presentations on routes to finding export finance, there will be the chance to identify opportunities. Perhaps the most important enabler behind doing this however, will be the attitude with which delegates themselves come to the QE II on March 6. Needham says “business leaders needs to look at the moats in their own eyes.

British business tends to be middle-aged, male and middle class – not to mention culturally unaware. If we want to be successful in world markets we need multifaceted individuals – it is not just about having a product with unique selling points.” Needham challenges business leaders to consider whether they truly have the attributes to take their businesses to the next level of growth and global success.

The EEF National Manufacturing Conference

When: March 6

Where: The Queen Elizabeth II Conference Centre, Westminster, London

Further info and how to book: A full agenda for the conference can be found online at www.manufacturingconference. Please contact Benn Walsh on 0207 4016033 to book.