How does a charity operate several commercial businesses, promote the image of manufacturing within education and deliver government contracts while teaching and awarding numerous nationally recognised qualifications? Will Stirling talks to an organisation performing an impressive juggling act.
The Manufacturing Institute (TMI) is a registered charity that promotes operational excellence in manufacturing and helps companies build competitive advantage through innovative thinking, process improvement, skills enhancement and leadership development. It operates the contract for the Manufacturing Advisory Service (MAS) in the North West, operates several commercial subsidiaries and administrates the Shingo Prize, an award devised in the US that recognises waste reduction and lean manufacturing practices. So far TMI has worked in over 4,000 manufacturing companies and over 30,000 manufacturers have attended educational programmes focused on driving productivity.
The Manufacturer spoke to TMI’s chief executive Julie Madigan, and head of programmes Adam Buckley, both passionate advocates of manufacturing in the North West, about the charity’s main remit, commercial activities, educational goals, the Shingo Prize, the NW manufacturing sector’s resilience to recession and more.
What is the mission statement of The Manufacturing Institute (TMI)?
Madigan: TMI is an independent charity and that status drives the values of the organisation. Our charitable objects are education for the public good with a particular emphasis on manufacturing and advocacy, added into the remit about eight years ago. Advocacy is saying that manufacturing is a good thing to do, while also advocating the development of the sector as a beneficial thing for the region and business. In a charitable remit we’re talking about public benefit. One aspect of this is the schools group — promoting manufacturing as a positive career destination for young people.
TMI holds the contract of the Manufacturing Advisory Service in the North West. Does your remit go beyond the normal MAS functions and how?
Madigan: MAS is a contract which is tendered for and delivered in each region by different organisations. We’ve been fortunate enough to tender for and win that contract for the last two terms in the North West. It’s one of the trading subsidiaries we operate. As a charity, we can do things which are contract-based and in public sector activities, but this are not our core remit — that is to fulfil our charitable objects. But there’s a lot of alignment between MAS and our overall charity aims.
Delivering public sector contracts does sit with our remit of promoting and advancing manufacturing. Any profit made from that is dissipated back to the charity and profits are reapplied to do more of things that require money, like the schools work.
MAS is just one of the things we do as a commercial activity, but beyond that we do a range of educational programmes and we have links with a range of universities. For example in the diploma (TMI’s Diploma in Manufacturing), which has been running since 1996, we have fifteen universities continuing to do that combined with manufacturing companies and consultancies.
How is TMI financed?
Madigan: There is no membership fee; we are not a trade association. There is a membership — we have moved away from just organisations as members and now include individuals that are high achievers in manufacturing, they exercise their authority on us through the articles of association.
We have to pay our way. Manufacturing is not a readily identifiable charitable cause, so we have quite a challenge: we have a duty to promote manufacturing as a sector with young people and we’ve got to make some money to spend it in that domain, so we do things through commercial subsidiaries which are owned by the charity. Those organisations exist to make money to put back to the charity — a bit like the Oxfam shops. Commercial activities can be anything that we feel is a beneficial activity that is aligned to our remit and capability which is around manufacturing excellence and education.
Education is one, we’ve been running education programmes for 15 years now so we’ve got a block of income around that. We’ve got the Shingo workshops we administrate. There is a diploma, a masters degree, a team leader development programme, we’ve got accelerated route to lean manufacturing programmes which have been running the longest. We’ve got a consultancy division that conducts operational excellence, then the public sector activities.
In terms of income most money comes from the trading activities, and we spend any profit on things like our schools work.
[As well as commercial work, TMI receives funding for specific projects like ‘Agenda for Change’ from the North West Regional Development Agency and has received funding from the European Regional Development Fund]
Education: Provide some examples of how TMI promotes manufacturing in schools
Madigan: Over 10,000 young people have participated in our activities which have been designed to make them think more positively about manufacturing as a career destination and which our evaluation process show are proven to change negative perceptions of the sector.
Buckley: We transfer knowledge to support the development of manufacturing. We devote reserves to promoting manufacturing as a target for schools and colleges as a career choice. For our ‘Make It in Manufacturing’ programme, designed to encourage young people to consider manufacturing, about half of our charity surplus is spent on that.
For example, at Wiseman Dairies, we brought school children in to design a new carton. The kids take on the roles of different jobs like MD, ops manager etc, then they submit their idea to a Dragons Den-type panel, they test it, get short-listed and one team wins. The children then comment on how much of the manufacturing they understood fully.
Kids have no preconceptions or paradigms, they’re open to new ideas — this has proven to be of real value to the host companies. A similar activity was done with McBride [cleaning product manufacturer] in Barrow-in-Furness. Now more school children in Barrow understand more fully about what manufacturing is.
Which educational establishments do you partner with?
Madigan: Five universities were part of the founding membership back in 1995 together with a range of manufacturing companies. We’ve expanded the article since that point so we also have individuals in manufacturing who are members as well.
It’s not only local universities — we run the Shingo Prize at TMI at a charity level.
What is the Shingo Prize?
Shingo is a prize acknowledging operational excellence. It is most known and recognised by what I call the lean cognescenti, the people who really look into lean and operational improvement, who recognise it as an important international standard. Interestingly, this is now travelling through to other sectors that are looking to manufacturing as the benchmark for operational excellence.
We’re linked with Utah State University School of Business to deliver the prize for the UK and Ireland.
We see Shingo as firmly sitting in our advocacy remit which is why the charity is funding the administration of the prize. It links us to an international dimension for operational excellence which is exciting because lots of benchmarking is done, such as factory awards and MX2000, which is an example of where we can look at excellence across different countries, to benchmark our companies internationally.
It also links tightly to the education agenda, the idea that companies’ progress in improvement must not be on a 6 to 12 months scale but is a long term commitment. Shingo is based on tools, systems and principles — most organisations know about the tools, but there aren’t that many that have made it through to the principles level.
If you look at the US the public sector is becoming more and more competitive around that sort of Shingotype agenda, so most of the growth in this area in the US has been on the public sector side.
Training: What are the most popular training modules and courses and have you noticed a shift in the type of companies that are applying for such training?
Buckley: We’ve had good, strong demand for both certificate programmes and the MSc (in manufacturing leadership). Companies are recognising a need for strong management and leadership in plotting a course through the recession.
At the other end we’re also seeing increased popularity for our Train2Gain products such as the NVQ Level 2 and 3. It’s based on a process of ‘learn, do, assess’ — this means it develops the skills of the workforce but also provides immediate returns and productivity benefits to companies. They have to produce evidence of their learning, cast that out within their workplace and therefore the business benefits as well as the individual. Train2Gain is heavily subsidised for the delegate and 12 months ago we didn’t have it.
So: top academic qualifications like the MSc, there’s a strong demand because business is recognising a strong need for leadership. At the bottom end they’re seeing they need to increase the skills and capabilities of the workforce. What is suffering is probably the ones in the middle.
Delegates on the current MSc run include BAE Systems, Johnson Mathey, Kerry Foods and Honeywell. We’ve seen a 30%-40% increase on delegate numbers.
Regional differences: What companies are representative of those that come to TMI and MAS NW?
Buckley: We’re fortunate in the North West to have a very diverse manufacturing sector and economy. Three sectors stand out in the region: food and drink, the pharmaceutical/process industries sector, and we’ve got a reasonably robust and growing environmental sector — wind, both offshore and onshore, and tidal and wave. The renewable sector is really buoyant.
Those are pretty resilient in recessionary times because of what they manufacture — people still have to eat, and the demand for drugs and energy is steady. Yes food and drink is suffering but not in an aggregate way, i.e people are not buying premium products now but are shifting down to the value products.
The region has sectors that are reasonably recessionproof, but there are sectors like automotive which is suffering quite badly. Perhaps some regions, such as the North East with Nissan, have a highly reliant supply chain servicing on one or two very big companies. We would like to think the diversity of the region here in the North West provides a reasonable level of resilience against the recession.
Recession: Are you getting more enquiries from manufacturers now compared with 12 months ago? Do you attribute this interest to the recession?
Buckley: It’s not a straight increase. Demand was high for MAS before the recession from companies looking to apply lean to drive competitive advantage. Due to the recessionary environment there are now more enquiries about looking to lean to reduce waste and increase efficiency. The outcome of that is it actually positions manufacturers well, to help them weather the storm but at the same time equip them with a competitive advantage when the recovery comes.
The strategic requirement now is different. In buoyant times it’s looking for that extra edge, where competitive advantage is concerned, whereas today it’s more about survival instincts, by reducing costs and increasing efficiencies.
Madigan: We have made a survey of 500 manufacturers over the last few months. It was done internally to inform the Survive & Thrive series of events; we wanted to flow results through to interventions once we understood the big issues for manufacturers. The results were interesting; for polling the outlook for business for the next few months, the vast majority say it’s contracting slightly or is static, the next group say it’s growing and the minority say it’s contracting severely. That’s redolent of what we’re seeing. There are obviously big headline cuts and but most people seem to be battening down and trying to get through it. That is the distinctive flavour of this survey — so organisations that might have been investing quite heavily in innovation are retrenching and saying lets just survive, perhaps to capitalise in the recovery and claim market share accordingly.
Interestingly in this study, everybody expects capital equipment spends, staffing levels and acquisitions to be lower, but marketing and sales efforts to be higher. But with NPD actually the majority say they put more effort into that and more effort into staff and leadership development.
We work closely with Business Link to generate those offerings and that’s why the flavour of the Survive & Thrive series has come through with cash, customers and markets and winning through innovation and with leadership as the key mix when we analysed this data.
We’re hoping to take the feedback that we got from Survive & Thrive and to work with Business Link to provide interventions around each of these issues. For example, providing the £1,000 grant support that’s available for the leadership and management training.
Lean: Do you think more manufacturers understand what lean is today, compared with e.g. two years ago?
Buckley: I don’t think manufacturers are getting more familiar with lean because of the recession. As you progress down the supply chain there is reduced awareness and, more importantly, less adoption of lean. You will get a lot of primes, and maybe tier one and tier two organisations implementing what they believe is lean which is a set of tools and techniques. But only a small number of companies recognise the value of lean thinking, that it’s not a set of tools, it’s making a cultural and behavioural change. Here we get into the Shingo Prize criteria; lean is a long term journey, about changing with the external environment. It’s about continuous improvement, empowerment of people, involvement and ownership of continuous improvement by the individual. That’s not fully understood by many companies.
Energy and sustainability: Give examples of your involvement with the renewable energy sector, such as wind, and sustainable manufacturing
We have nuclear capability in the North West and we have more than a fair share of both offshore and onshore wind, and we have two really good tidal areas as well. With wind turbine manufacture, the first thing you’ve got to do is increase awareness in the manufacturing base of the opportunities. My belief is that manufacturing tends to only see the legislation and directives associated with environmental opportunities to commerce. The opportunities that exist, the diversification for some companies, are immense. Take a wind turbine: it’s got an engine, propellers, gearing, a fuselage — suddenly you’re talking about automotive and aerospace supply chain capability. It is the risk, as well as identifying the opportunity, that we need to encourage manufacturers to take: to see the opportunity and to adopt, adapt or modify their products for that sector.
The North West as well as the UK in general has a good marine background, we have marine technology. If you think about the capability and the skills we’ve got
to build and deploy oil rigs — that technology could be applied to a wind turbine that doesn’t have to be physically attached to the sea bed, we could create that floating wind technology. Here we have also got a great shoreline for planting such technology on the sea bed, if you take Southport and Morecombe, there is such a low tidal element.
We’ve a fantastic case study for sustainable manufacturing, a company who needed a lot of glass splinters. We helped them match up with an organisation, Carlton Design, which produces a lot of this glass as waste, so one company’s waste has become another company’s raw material.
Importance of TMI activities looking ahead:
Madigan: We’re looking to invest in setting up several digital manufacturing activities [the Manchester FabLab] to engage talent in the community for a model of democratic innovation and we’re linking to MIT [Massachusetts Inst Tech] for that, starting in April.
We are developing the charitable activities, starting to drive an agenda about manufacturing being forward thinking and innovative and a place where people actually want to go to work, that fits very well with the current economic predicament — the whining on the black pad is that the share price of manufacturing has gone up somewhat and financial services has gone down.
‘Agenda for Change’ has been important to us over the last few years, which was MAS and more than MAS, with our charitable status assisting to make it bigger.
We’ve have a capital equipment scheme that’s been very successful, again matched by the Agenda for Change programme. Promoting the Shingo Prize is very important to us. The charity is where we see all the growth happening in the next few years.
