The revenues of companies in the aerospace industry are growing, but companies in the supply chain aren’t benefitting from the OEM revenue boost in the same way. Andy Page, the CEO of Sharing in Growth (SiG), explains how SiG helps aerospace suppliers to tackle this problem.
Data published by the Office for National Statistics (ONS) has shown over the years that the revenues of companies in the aerospace industry have been growing, mainly because large companies like Rolls-Royce, Airbus and GKN are dominating the industry.
These OEMs control a considerable share of the global aerospace market. However, despite the growing revenues of these OEMs, the valuable work being undertaken in the UK’s aerospace supply chain has remained relatively flat over the years, at least this is what Andy Page, SiG’s CEO, says.
A reduction of that share is symptomatic of the fact that a large part of the work in the supply chain is not sticking to the UK.
Page stated: “But to create a healthy ecosystem of aerospace in the UK, we need to make sure that the supply chain can retain its value, which is the employment, the people.
“The industry needs to make sure that not only the large companies are generating market share, but that wealth can be created in the deeper supply chain too.”
The Manufacturer asked Page what actions needed to be taken to help aerospace manufacturers in the supply chain to better benefit from growing OEM revenues?
He said that the concept of Sharing in Growth UK Ltd was first conceived in 2011 as an ambitious response to the deteriorating competitiveness in the UK aerospace supply chain.
Since its launch in 2013, the programme has secured over £2.5bn in contracts and 22 thousand man-hours of work for some 60 UK suppliers by driving improvements in operational competitiveness, leadership behaviours, and business strategy.
The views in this response draw on the experience of working intimately with their leadership teams and their 11.000 employees across the UK.
Page said that Sharing in Growth is well ahead of its commitments to the Department for Business, Energy & Industrial Strategy (BEIS) and is also ahead of the commitments made by the beneficiaries in their investment proposals.
Throughout the programme, all beneficiaries submit data to enable progress to be monitored and to provide a snapshot of the overall health of the participants.
It is evident that the beneficiaries have achieved a positive impact, including:
- The growth of the top 70% of companies is 12% per annum, versus their peer group which is at less than 4%.
- Demonstration of reinvestment into their business with a doubling in capital spend, and they are on track to treble that during the programme. Consequently, their net worth has increased by 23% while their peers have remained relatively stable.
- Demonstrating stronger leadership, evidenced by the fact that over 90% of them have now established and actively use a vision, mission and values. Also, more than two-thirds of them have already seen increased employee engagement, with the top third demonstrating excellent levels of engagement.
Sharing in Growth UK Ltd was set up by the industry as a non-profit organisation with industry sponsorship and public funding support.
To deliver the current programme, Sharing in Growth has assembled a group of ten world-class delivery partners and a team of 120 full-time professionals covering the critical business topics that SiG trains and coaches.
This resource pool enables SiG to deliver business improvement programmes tailored to individual company needs – with significant cost benefits being realised through long-term agreements with delivery partners and economies of scale.
Page says: “We believe the structure is unique in the UK and is seen with great interest by other countries. It is scalable and applicable across many sectors and can play a significant part in the government’s productivity drive, potentially linking with capital institutions (e.g. BGF) and technology institutions (e.g. ATI) to leverage benefits.”
Steve Kirk, managing director at CW Fletcher, said: “The degree of change we have undergone in four years with Sharing in Growth is unprecedented in our 126-year history and has played a big part in transforming our company into a globally competitive organisation securing 200 employees.”
Ray Doyle, director at StandardAero, explained: “A key strength of the programme is the way Sharing in Growth engages with our organisation at a strategic, tactical and cultural level; helping us set a clear direction, solve day to day issues and develop the confidence and ambition of our people.”