Manufacturing at work and play

Posted on 10 Dec 2011 by Tim Brown
Richard Noble OBE, CEO Bloodhound SSC

From November 8-10 The Manufacturer magazine held a total of seven events all centring around our annual conference and awards ceremony. From factory tours, breakfast briefings and specialist workshops the three days were packed with ‘value add’ for around 900 delegates spanned across them.

This artile will attempt to capture just a few of the key moments from the two major events held on Nov 9; The Manufacturer Directors’ Conference (MDC) and The Manufacturer of the Year Awards. While each event had quite a different feel and focus, the former supporting knowledge transfer and company benchmarking and the latter committing itself to celebration, both held surprises and provoked strong reactions from members of the UK manufacturing community.

The Manufacturer Directors’ Conference 2011

From the very start of this year’s MDC an almost aggressive pride and bullishness was evident from delegates with regards to the status of UK manufacturing.

The conference was chaired by Peter Marsh, manufacturing editor at the Financial Times, who acknowledged the role to be played by the mainstream media in communicating the triumphs as well as the tribulations of the sector. He did however, challenge the assembled delegates, who came from a wide range of manufacturing sectors including; food and beverage, heavy industry, automotive, life sciences, IT hardware and more, with the opinion that the “onus is on you, manufacturing companies, to expose yourselves,” to attract that media coverage.

The question of responsibility for the fate of manufacturing was core to the opening sessions of MDC and cause for some fraught moments. Fierce debate was provoked by John Oliver OBE, former CEO of Leyland Trucks, now turned author and consultant. Drawing his keynote presentation to a close Mr Oliver commented: “We are in a mess. The country, our economy, manufacturing.”

This statement put several vocal delegates immediately on the defensive. Edward Whittle, operations director at Whitby Seafoods, questioned: “What do you mean by ‘we are in a mess’? I don’t believe that applies to most companies here,” and Colin Larkin, plant manager at New Holland Agriculture, stated: “Manufacturing is not in a mess. Strategy is in a mess.”

This defence of UK manufacturing efficiency and prestige was a key moment for the opening speaker at MDC, Neil Parker, market strategist at Royal Bank of Scotland. “It was hugely encouraging for me that those who live and work in the manufacturing community rebuffed that statement,” he confided to TM after the event. “Manufacturers across the board are now showing that they are prepared to defend their industry and to go into battle with competition around the globe.”

According to Mr Parker’s presentation, which provided insight into forecast economic conditions in 2012 this international aspect will become increasingly central to almost every manufacturer’s plan of attack (see Fig 1). Mr Parker observed a general growth in the level of UK exports throughout 2011 and confirmed that this increase is coming both from established exporters and from companies previously focused on domestic markets.

Highlighting the size of the opportunity available through international operations Parker said: “If we take China as an example there is an overall economy worth in the region of $5 trillion. Qatar is worth $52 billion a year and has earmarked $130 billion over the next five years for investment in the development of national industry and infrastructure. There is huge wealth to be tapped here.”

However, for many at MDC, troubles somewhat closer to home currently obscure the route to taking advantage of this wealth and Parker did not shy away from discussing either the turbulence of the sovereign debt crisis in mainland Europe or the availability of finance for growth to UK firms.

Parker’s outlook on the former issue was confident. “I do not expect the slowdown caused by eurozone uncertainty to persist into 2012,” he stated.  “The situation has been serious but I am confident the right actions are now being taken. Some economies, such as Italy and Greece, will continue to suffer, but others now have a backstop and clear leadership on the route to recovery. Across Europe opposition parties and the populace have now seen what lies on the other side of the abyss.”

Moving on to tackle access to finance, Parker told TM: “We are keen to see more applications for borrowing. Our attitude now is one of partnership. We need to understand more deeply the businesses we are lending to.” Defending the position of the oft-vilified banks however, Parker said: “We are being told to lend more at the same time as being asked to build up our capital reserves and that is very difficult. We too need to know that government policy is consistent.”

Parker’s impartial scene setting proved striking for many delegates and responses to the presentation displayed a significant change in what has been an antagonistic relationship between financial services and industry since the recession took hold. A broader appreciation of individual challenges and mutual goals was expressed and as Chris Maher, MDC delegate and general manager at Hitachi Automotive Systems Europe, commented: “We all need to remain aware of the macro issues. They affect everything and everyone.”

Focus on John Oliver, OBE

Despite controversy caused in the MDC panel discussion session by Mr Oliver’s closing statements his presentation was widely acknowledged to be one of the best features of MDC 2011.

Giving practical guidance on the ‘hows’ and ‘whys’ of workforce engagement Mr Oliver pulled no punches for his audience of senior manufacturing managers and company leaders. “Leadership behaviours determine the behaviours of everyone else in the system,” he said. “If our workforce displays dysfunctional behaviours, it is because we are dysfunctional. It is our fault.”

Digging down into the magnitude of opportunity available through what he terms as “radical workforce engagement,” Oliver revealed some shocking statistics from the McLeod Report, Engaging for Success: enhancing performance through employee engagement, commissioned by Lord Mandelson during his time as Secretary of State for Business.

According to this study, 70% of UK workers said they have no natural affiliation to the objectives of the company they work for and 30% said they were actively antagonistic toward those objectives. For Oliver this is a call to arms against paying lip service to ‘organisational values’ and an indictment of the levels of effective communication being undertaken in most companies.

Recounting his own realisation of the power of engagement, Oliver showed delegates the results he achieved as CEO of Leyland Trucks. Among many triumphs for the struggling company following the implementation of radical engagement strategies was the reduction of its breakeven point from 11,000 trucks per annum to 5,500 trucks per annum in a 30 month period – an achievement Oliver says was undoubtedly critical to the survival of the company.

Oliver was clear in stating that engagement campaigns are the direct responsibility of senior management, not “something to do with HR” as he said many organisations and leaders appear to believe.

Delegate and speaker comments from MDC 2011

In addition to the insights and opinions already mentioned in this article MDC 2011 held many more ‘light bulb moments’ for those who attended. Here a just a few comments and observations from the day:

Juergen Maier, head of Siemens UK industry sector: “The UK has efficient factories. In the application of lean and six sigma techniques UK Siemens factories are often outpacing factories in Germany and other countries. But we are lagging in investment.

“We have a culture of sweating our assets in the UK. We take pride in ‘making do’ when what we really need to do is get rid of legacy equipment, innovate and invest in automation and technology.”

Colin Larkin, plant manager, New Holland Agriculture: “The Richard Noble speech was highly motivating. I also thought Masaaki Imai was enlightening and would have liked more time to ask questions like ‘if the Kaizen Institute is so effective why is it still the case that only companies connected to Toyota remain best when it comes to lean implementation’?”

George Allan, plant manager, Innovia Films: “I thought the conference was really good this year -the standard improving on the last two I have attended. The best was the session on continuous improvement by Masaaki Imai.”

Graham Patterson, group manufacturing excellence manager, Premier Foods: “The event was extremely useful, bringing together best practice ideas and innovations from every sector under one roof. The camaraderie between all the businesses and people present was great to see, it suggests greater effort for collaborations in the years to come and provided a platform for real celebration of UK manufacturing.”

Young Manufacturer of the Year

Young Manufacturer of the Year Award 2011 winner, Joe Miller of Drallim Industries

With the need to attract bright young talent into manufacturing and encourage the delivery of high quality apprenticeships in manufacturing firms at the hub of industry debate, one of the most important features of MOTY 2011 was the addition of the Young Manufacturer of the Year Award.

Judges were impressed by the high calibre of entrants to this award. Among those shortlisted, Kai Burkett of BAE Systems was already an award winning apprentice many times over having received both internal accolades from his own organisation and external recognition at the National Apprenticeship Awards.

Stealing the stage for the Young Manufacturer of the Year Award’s debut, however, was Joe Miller of Drallim Industries. With an impressive portfolio of achievements Mr Miller was finally picked by the judges due to the high level of responsibility he has already achieved within his firm.

Manufacturer of the Year Awards

The Manufacturer of the Year Awards 2011
The Manufacturer of the Year Awards 2011

With over one hundred more guests than in 2010, The Manufacturer of the Year Awards (MOTY) 2011 was always set to be a record breaking year for its hosts. As the evening unfolded however, the camaraderie and celebration among those present exceeded even TM’s optimistic expectations.

Many of the most successful companies at this year’s awards were those who, as well as taking the time to look internally at building staff engagement for increased productivity and developing operational excellence across all business areas, had also taken care to look externally. They show awareness of the UK manufacturing environment, of the challenges being faced in skills and are ready to find out what help and funding is available to the manufacturing community in these straightened times.

Triumphing in two categories and placed as runners-up for the overall Manufacturer of the Year Award, New Holland Agriculture, the tractor-making subsidiary of Fiat, was undoubtedly one of the stars of this year’s awards and a company which has made the most of the help available for staff training. (See table for awards details.)

With help and guidance from Semta as to what training to provide and where to go for funding, New Holland have put 280 employees through a bespoke Business Improvement Techniques (BIT) programme. Employees now own and drive improvement work and are increasing productivity and efficiency for the company every day. Colin Larkin, plant manager, says that the BIT training has been applied to around 50 projects in the last two, three years and attributes around £1.2m in savings to the improved workforce understanding of value added activities, quality issues, flow of materials and the implications of inventory.

During the judging process for the Manufacturing in Action category the judging panel was particularly struck by the integrity of workforce empowerment at New Holland and the clear opportunities for progression given to those who excelled on the shop floor.

The overall winners

Cosworth proved a pertinent point about the integrity and strength of SME manufacturing in the UK by scooping both the SME and overall Manufacturer of the Year Awards.

Commitment to R&D and diversification were central to Cosworth’s winning profile with the judges. Despite its relatively small size, Cosworth invested £8.1m in R&D in 2010 – up from £6.2m in 2009. The company has been lucky to have funded this investment through its own cash flow but has recently reaped ROI benefits from focussing its R&D processes. “We used to place a lot of small bets,” says chief marketing officer Rik Temmink, “but I would strongly advise other companies, particularly smaller organisations for whom a return on investment is critical, to focus on a few key projects. It can feel risky to put so many eggs into a few baskets but in the end it is far more beneficial.”

Cosworth’s strategy for market diversification follows on a desire to soothe the painful peaks and troughs of its traditional motorsport sector. One recent project, for which the company did receive public funding via the Technology Strategy Board, was carried out in collaboration with ClydeUnion Pumps. This project developed an early warning monitoring system for a new pump designed for nuclear applications and aligns with diversification intention in ‘clean tech’. The TSB funding for this project came to the tune of £107,000.

Cosworth’s investment in product development and market diversification is not all internally focussed however. Taking a deep interest in the fortunes of the manufacturing industry as a whole the company has thrown itself into projects which promote manufacturing careers and drive forward the progress of manufacturing technologies.

Most prominent among these initiatives is the Bloodhound SSC project which featured prominently at both MDC and the awards with hit presentations from Richard Noble, OBE, project director of Bloodhound. “Bloodhound is an opportunity to give back to the manufacturing community and we share Richard Noble’s concern about the future of engineering in the UK,” says Temmink.

Of course such altruism is not without its kick-backs. “We want to be a much bigger company than we are today, and we are already having trouble recruiting the talent we need to take us forward,” Temmink states, sharing a little of the bullish ambition which contributed to the company’s triumph at TM’s awards.

Manufacturer of the Year Award winners 2011

Manufacturer of the Year Award – Cosworth
Manufacturer of the Year Award Runners-up – Muntons and New Holland Agriculture
Sustainable Manufacturer of the Year Award – Muntons
People and Skills Award – Hi-Technology Group
Leadership and Strategy Award – JJ Churchill
Leadership and Strategy Award Runners-up – Accolade Wines
SME of the Year Award – Cosworth
Innovation and Design Award – G’s Fresh beetroot
Innovation and Design Award Runners-up – Ricardo
Young Manufacturer of the Year – Joe Miller (Drallim Industries)
World Class Manufacturing Award – New Holland Agriculture
IT in Manufacturing Award – Fairfax Meadows
Operations and Maintenance Award – PZ Cussons
Supply Chain Excellence Award – Cinch Connectors
Manufacturing in Action Award – New Holland Agriculture

This year marked the fifth consecutive year of sponsorship from Royal Bank of Scotland at both MDC and the Manufacturer of the Year Awards. Commenting on the 2011 events, Peter Russell, head of manufacturing at RBS, and one of TM’s Awards judges, says they give UK plc reason for optimism, celebration and vigilance.

As a judge at this year’s awards, it was an inspiration to see and hear first-hand the ingenuity, dedication and resourcefulness underpinning the UK’s manufacturing sector, despite gloomy outlooks.

Take the Leadership & Strategy Award. Nominees demonstrated just how crucial it is for visions and objectives to be communicated effectively. The commitment and excitement we identified among the presenting teams appeared to have come about largely through energetic, proactive workforce engagement by leadership teams. They showed that strategies which are explained and promoted effectively will be the most successfully delivered.

Likewise, the Kaizen principles shared with us by Masaaki Imai at the MDC conference reinforced what we’d witnessed on the judging panel. Conscious workforce engagement is what motivates people to think creatively and act productively.

Our manufacturing sector is both strong and much-admired. But to remain competitive while continuing to enhance product quality and service delivery, firms – just like those whose teams we had the privilege to meet and judge – must keep striving to improve. What’s more, they need to instil that sense throughout the workplace. Employees who feel well-informed also feel trusted and valued – and will want to add value in return, coming up with ideas that might otherwise never surface (at least not until those employees are hired by more astute competitors).

Those who attended the conference’s breakfast briefing, master classes and panel discussions can be in no doubt about one of the more immediate and specific challenges facing manufacturers: managing energy costs efficiently. It’s a real issue that threatens to fatally impact on our competitiveness if left unaddressed and, political and regulatory complexities notwithstanding, there isn’t yet an easy answer.

But there’s plenty to take heart from. This conference’s theme, A Decade of Opportunity, provided an apt backdrop to leadership, strategy and engagement concepts – and to monumental problem-solving. After all, those occupying our boardrooms in 10 years may well be among those whose creativity, craftsmanship and passion are today being nurtured – or under-utilised.

This year’s conference activities and awards provided us with reasons to be vigilant but also optimistic – and certainly celebratory. We congratulate winners, nominees and participants alike.