How to achieve growth: it’s debatable

Jane Gray wraps up key discussion at the National Manufacturing Debate 2012.

Now in its third year, Cranfield University’s National Manufacturing Debate took on the topic of ‘Enhancing the supply chain for growth’ last month. Discussion showed this to mean different things to ‘the’ academics, industry representatives, trade body spokespeople and training and education specialists in attendance, but three overarching themes emerged as essential to support the supply chain: skills, innovation and access to finance.

Skills
It never takes long for talk to turn to skills gaps at a UK manufacturing event but this year’s National Manufacturing Debate dived straight into this emotive issue with little preamble.

Discussion of the importance of skills development in Britain’s manufacturing supply chain was kick started by delegate Roger Kings, business mentor at ball bearings manufacturer, JH Richards. “I thank this morning’s speakers,” he said “but now that I have heard from the academics and the big manufacturers I think it is time to hear the voice of the SME. It is the companies employing less than 100 people, arguably less than 50 people, who need to be heard here today,” Mr Kings asserted.

Key among Kings’ complaints was the lack of an appropriate and trusted training structure for SMEs to support finding new staff, with recognisable qualifications, and training existing employees.

Lord Broers talks to Prof Raj Roy about ways to enhance UK supply chains

Lord Broers and Professor Raj Roy of Cranfield University discuss how British industry might improve and grow its supply chains – especially in nanotechnology – at the National Manufacturing Debate 2012.

See the video here: http://www.youtube.com/watch?v=W12w_5jDrC4&feature=relmfu

Iain Gray of the Technology Strategy Board at the National Manufacturing Debate

Enhancing the supply chain for growth: CEO of the Technology Strategy Board, Iain Gray, tells The Manufacturer what the TSB does to help companies and why it is doubling its funding pot in high value manufacturing.

See the video here: http://www.youtube.com/watch?v=l330NdlBmq0&feature=relmfu

Kings stated that the current apprenticeships qualifications are now outdated and irrelevant but this was rebuffed by Tata Steel’s Jon Bolton. A board member at Semta, the manufacturing sector skills council, Mr Bolton maintained that modern apprenticeships are employer led and that new processes introduced by the Semta Apprenticeship Service means that the niche needs of smaller employers are being met better than ever before by colleges, while the administrative burden of training is reduced.

To further improve matters however, it was agreed by several delegates that large organisations ought to reignite past schemes of over-fulfilling their own apprenticeship needs and directing trained individuals into their supply chains. Bolton agreed that this was something which could be bettered.

The emerging network of University Technical Colleges provided a new flavour to the well traversed topic of industry skills pipelines. However, with only around one third of delegates saying that they had heard of UTCs, subsequent conversation proved that understanding of their purpose and curriculum development mechanisms was hazy.

The ERA Foundation’s Sir Alan Rudge interviewed at the National Manufacturing Debate 2012

The ERA Foundation’s Sir Alan Rudge interviewed at the National Manufacturing Debate 2012. Sir Alan talks about the importance of the Debate – with follow-up reports – and how the UK is taxing industries like steel production out of the country with carbon reduction taxation.

See the video here: http://www.youtube.com/watch?v=ienSoIcE9OI

Martin Smith, PA Consulting, National Manufacturing Debate, Jane Gray, The Manufacturer, sustainable growth

Martin Smith of PA Consulting tells TM’s Jane Gray about the technology consultancy’s six-month study for unlocking sustainable growth in the UK.

See the video here: http://www.youtube.com/watch?v=XOzu6jqTU8g&feature=youtu.be

As delegates began to pass judgement on whether or not UTCs have the capacity to fill skills pipelines and precipitate industrial growth in the UK, Bill Williams, CEO of the east London-based Centre for Engineering and Manufacturing Excellence, which gained approval to become a UTC only the day before the Cranfield debate, begged manufacturers to remember that the UTC model is in its infancy.

Dr Mark Claydon-Smith talks to The Manufacturer about how the EPSRC can help develop supply chains

Dr Mark Claydon-Smith talks to The Manufacturer’s Jane Gray about how the Engineering and Physical Sciences Research Council (EPSRC) can help develop supply chains. Filmed at the National Manufacturing Debate 2012.

Watch the video here: http://www.youtube.com/watch?v=H1z30dY4vbw&feature=relmfu

The British Chamber of Commerce’s Martin Pellew speaks to Prof Raj Roy about growing supply chains

British Chamber of Commerce, Martin Pellew, Raj Roy, Cranfield University, supply chains, UK, National Manufacturing Debate.

See the video here: http://www.youtube.com/watch?v=OEt2Ba-3GYA&feature=relmfu

“UTCs are an experiment which is in its very early stages,” said Mr Williams. “Their potential is huge, but it will be employers themselves who determine whether or not they are a success.” UTCs derive their curricula through consultation with local and national businesses. Each UTC has a STEM specialism in addition to a core focus on preparing 14-18 year olds for ambitious vocational careers.

For more information on the Semta Apprenticeship service and its services for manufacturing SMEs go to: www.semta.org.uk/employers/ semta-apprenticeship-service

For more information on UTCs and employer engagement in curriculum development go to: www.utcolleges.org

Panel members take questions from the floor to kick start debate
Panel members take questions from the floor to kick start debate

Access to finance
As talk turned towards difficulties accessing finance, a strong desire for a round of bank bashing became apparent. This was disappointing given the opportunity for intelligent assessment of recently launched schemes designed to cure SME problems with access to finance. There was little acknowledgement of the Business Growth Fund, the Enterprise Finance Guarantee or the National Loan Guarantee schemes, let alone the products being offered by a variety of banks to facilitate working capital and exports.

Instead, Mark Lee, head of manufacturing at Barclays and a panel member at the debate, bore the brunt of criticism based on anecdotal accounts of manufacturing peers that stated they had been unfairly denied finance despite having bursting order books. Multiple delegates, including panel member Victor Higgs, MD of nanotechnology SME, Applied Nanodetectors, claimed that small companies received “the dregs” when it came to banking relationship managers.

Mr Lee’s assurance that lending money was the raison d’etre for banks was brushed aside as was his advice to look at the full spectrum of finance options available to assist growth – not just debt, but also equity and asset finance options.

Tim Routsis, CEO of Cosworth, says ‘be bold, be different’ at the National Manufacturing Debate 2012

Cosworth had to reinvent its entire business when key customer Ford pulled out of Formula One in 2004. CEO Tim Routsis gives Jane Gray his view of what makes a company successful, urging companies to keep reinventing themselves to stay in business.

Footage can be seen here: http://www.youtube.com/watch?v=SSatSmIwk3Y

Barclays’ Mark Lee says that banks are helping to fund supply chains. Speaking at the Cranfield NMD

The notion that UK banks are not lending to companies is popular, yet banks claim reasonably strong lending commitments to manufacturing. Mark Lee talks about two areas where his bank offers a good service: de-risking the supply chain and efficiently funding the supply chain.

Click this link to see the video: http://www.youtube.com/watch?v=JTMeKxBs48w

Providing a thoughtful middle ground, Tim Routsis, CEO at engine-maker Cosworth, suggested that there was a language barrier between manufacturing SMEs and banks. “Just because a company cannot express their case in the correct terms, does not mean that their prospects are not bankable,” he said. It would benefit manufacturers to better understand how to apply for different types of credit and explain the technology and payback periods that banks, which often adopt a short-term outlook, can sometimes struggle with.

For information on The Business Growth Fund visit: www.businessgrowthfund.co.uk

For information on the Enterprise Finance Guarantee visit: www.bis.gov.uk/efg

For information on the National Loan Guarantee visit: www.hm-treasury.gov.uk/nlgs

MD of Applied Nanodetectors, Victor Higgs, talks about the absence of strategy in the UK

Managing director of Applied Nanodetectors, Victor Higgs, talks about the absence of an industrial strategy in the UK. His field, nanotechnology, had a great science base but in the last decade the sector failed to develop as a proper industry. (Interviewed at the National Manufacturing Debate).

Watch it here: http://www.youtube.com/watch?v=OtizNTIUrM0&feature=youtu.be

Invitation and collaboration
Delegate questions on the workings of collaborative collectives, the balance of power in large company-SME innovation partnerships and the challenges associated with market entry revealed a pro-active interest in pushing innovation harder and faster in manufacturing supply chains.

Although Roger Kings claimed that “Catapults don’t want anything to do with you unless you have money to bring to the party,” there was a great deal of positivity about the options available for facilitating innovation at an SME level.

Grants from the Technology Strategy Board and participation in its Advanced Manufacturing Supply Chain initiative were singled out as particularly helpful.

The potential of manufacturing collectives to foster and share innovation was also discussed but found to be in its infancy in the UK. Professor Raj Roy of Cranfield University suggested that there was work to be done in modifying the collective models used on the continent to better suit British business culture.

For information on the Advanced Manufacturing Supply Chain fund visit: www.innovateuk.org

The morning sessions

Warming delegates up for their participation in an afternoon of debate Cranfield University organised an impressive morning programme of presentations. Highlights included:

The launch of the Technology Strategy Board’s High Value Manufacturing Strategy: Iain Gray, TSB chief executive made this announcement in his presentation. Among other commitments the strategy pledged to double the TSB’s direct investment in HVM innovation projects to £50m.

Hollowed out supply chains are limiting the potential of off-shore power generation industry: Tata Group is the UK’s largest foreign investor but Jon Bolton, business director of Scunthorpe-based Tata Steel Long Products, warned that lack of supply chain strategy for the UK off-shore wind industry is leading to lost wealth creation opportunities. Reports say that as little as 10% of the value of a wind farm is manufactured in the UK.

Finance diversification should ease access woes: Mark Lee, head of manufacturing at Barclays, spoke of the choice of financial products now available to UK companies. Mr Lee highlighted the Enterprise Finance Guarantee Scheme, Business Growth Fund and the National Loan Guarantee Scheme, as well as support for exports in products which free up working capital.

Reliance on public sector is a burden to growth: President of the British Chamber of Commerce Martyn Pellew rounded on a public sectorheavy economy where the bureaucracy required to administer some schemes, such as the Regional Growth Fund, costs more than the growth they were designed to generate.

Market diversification spreads risk and opens up new business: Tim Routsis, CEO of Cosworth, proved to be the archetype for market diversification and showed that this is achievable even at SME level. Thanks to its diversification strategy in the aerospace and defence sectors Cosworth is predicting its third consecutive year of 20% compound growth in 2012.