MDC through the years

Posted on 4 Nov 2013 by The Manufacturer

Putting MDC2013 in context, TM reflects on past findings at the Manufacturer Directors’ Conference to express a picture of accumulating confidence and maturing debate.

TM launched, the Manufacturer Directors’ Conference in 2009 and, each year, the magazine has captured highlights, mood and delegate feedback to reflect the interests and concerns of UK manufacturing leaders.

Across the years, while core themes have remained largely consistent, context and maturity of debate has changed significantly:

MDC2009, November 12, London

In November 2009, in the thick of a global financial crisis, UK manufacturing was in contraction and held its first Manufacturer Directors’ Conference.

It was a somewhat sombre affair which focussed on cost cutting and where the language, though doggedly committed to the importance of UK industry, was far from optimistic.

The sustainability debate at this conference was nascent – gravitating toward discussion as to whether electric cars would ever make it big, rather than seriously addressing the imperative for manufacturers to become more energy efficient in their operations.  This is despite the inclusion of two presentations from Professor Peter Hines, then of Cardiff University’s and Lean Enterprise Research Centre, and Andy Wood, MD of Adnams, the Suffolk-based brewer, on the merit of combining green and lean strategies.

A tone of growing urgency was expressed throughout the day with regards to skills gaps, but there was little talk of apprenticeships as solution or of employer activism in taking responsibility for skills development.

One delegate from a large London further education college observed, “It’s no longer good enough to say young people are not being taught the skills they require in industry. Go that extra step and say what those skills needs are to those willing to provide them.”

It is noteworthy that subsequent years have seen the initiation of Employer Ownership of Skills and a broad effort to reform the funding and training design mechanisms for apprenticeships, and other vocational training, in order to give employers more control.

Former Trade Minister Lord Digby Jones gave a rousing speech to award winners at the Manufacturer of the Year Awards in 2010 following an upbeat, but efficiency and austerity focussed conference.

MDC 2010, November 18, Warwickshire

The coalition government was bedding-in, promising cuts to corporation tax, the introduction of a Patent Box and enhanced capital allowances.

The mood was lifted at this MDC by a period of recovery in UK manufacturing output over several consecutive months. The PMI result for October came in at 54.9.

Early hints of the potential benefits to industry of a new education model were communicated at this conference where Jim Wade, principal of the JCB Academy talked about the establishment of what we now know as University Technical Colleges.

There was a lot in this day’s agenda that addressed the engagement of workforce in change and execution of strategy.

There was also an early attempt to acknowledge the dawning of a new era of manufacturing in which production was not the central concern of the manufacturing enterprise. Chris Daffy, founder of the Academy of Service Excellence spoke about the growing importance of an integrated service culture in manufacturing operations. However, delegate feedback showed that attendees were still primarily concerned with lean manufacturing techniques and enablers.

MDC 2011, November 8-10, Manchester

MDC expanded to include factory tours and ancillary workshops in 2011.

This conference included a serious acknowledgement of exports and the need for a global outlook as fundamental to UK manufacturing’s success.

While previous conferences had addressed global manufacturing trends, the attitude had generally been more defensive than offensive – prone to seeing globalisation as a threat rather than an opportunity.

The atmosphere of camaraderie between manufacturers was notable. There was a distinct step up in the dynamism of networking and the readiness of delegates to take the opportunity to meet peers in their community, either for exchange of best practice, or simply for alternative perspectives on business outlook.

There was also defiance. When one speaker commented that “UK manufacturing is in a mess,” several delegates got to their feet with reposts like “Manufacturing is not in a mess. Strategy is in a mess.”

While lean manufacturing remained a core element within the 2011 agenda, speakers like Juergen Maier, MD of Siemens UK Industry Sector, began to hot up debate on the need for more capital investment and automation.

He remarked on the non-competitive consequences of a “make do and mend” philosophy to sweating assets in UK manufacturing.

This remains a key issue for UK industry – with the notable exception of the automotive sector which has invested significantly, driving a record year for automation sales in 2012.

MDC 2012, November 21, London

Senior manufacturing leaders joined TM's sector focussed round table debates on challenges and opportunities in 2012. These round table sessions will repeat at the 2013 event.

September 2012 saw the announcement of a manufacturing strategy by the Department of Business Innovation and Skills and at MDC2012, newly appointed business minister Michael Fallon promised that government was making fresh effort to coordinate departmental objectives so the “every department is a department for growth”.

The was agreement at this conference, straplined Navigating today, ready for tomorrow, that UK industry was on the brink of better times, but optimism was still tentative – largely due to extreme unrest in the Eurozone and not only in Italy, Greece and Spain.

As Ross Walker, senior economist at Royal Bank of Scotland pointed out there were “clear signs of contagion in semi-core countries such as Belgium and France.”

With UK exports beyond the Eurozone still struggling to grow, this fear remained a confidence inhibitor. Mr Walker urged cash rich “non-financial corporates” and midsized firms to help consolidate confidence by investing the “unprecedented cash piles,” on their balance sheets. A year on, there has been little movement on this with banks confirming that firms are sitting on around £500bn which might be ploughed back into business investment.

There was a notable increase in the maturity of debate around energy and sustainability at this conference. One delegate noted, “there was an advance from a focus on reducing consumption – through steps like switching to energy efficient light bulbs and optimising voltage – to looking a total energy strategy and reducing exposure costs and security of supply”.

MDC 2013, December 3-4, Birmingham

In the lead-up to MDC2013 there is a bigger spring in the step of UK manufacturing.

Leaders are still cautious, but they are more confident of their industrial environment. Many are praising the positive work of the Catapult Centres in accelerating the commercialisation of scientific research and the TSB in helping smaller firms bridge the so-called valley of death, in order to grow in scale and capability.

Skills gaps remain a core issue, but there is far more industry ownership of this challenge in 2013 than in 2009. At MDC2013 hopes this will be demonstrated through a dedicated skills workshop including involvement from around 30 under 25 year olds who have been invited to clarify the remaining perception barriers about the industrial careers and what really helps in breaking them down.

On investment, while intentions are strong, realisation – especially in capital equipment – remains low. As was predominantly the case in 2009-2011, some continue to blame access to finance for this, though figures released in October showed that British SMEs are increasingly resourceful in finding non-bank finance thanks to a proliferation of alternative finance options.

As escalating energy costs hit the headlines this year, MDC2013’s focus on integrated manufacturing strategy, not through the narrow definition of production, but inclusive of skills, supply chain, product, process and service development, is highly relevant.

This year’s agenda reflects and supports a proactive sector finding innovative, strategic solutions to its challenges within an industry infrastructure which is undoubtedly better enabled that the one we knew four years ago.

TM would like to thanks Royal Bank of Scotland for its steadfast sponsorship of MDC from 2009-2013.