Meggitt: braking good, building great

If roads could be awarded commemorative blue plaques, Swallow Road in Coventry would deserve one. It is the nondescript drive that bisects what was once a huge industrial estate, and today leads to Meggitt Aircraft Braking Systems (MABS).

Decades ago, it ran past the Swallow Sidecar Company, forerunner of Jaguar cars, but today there is no trace of those old factories that formed the history of one of our greatest brands; they have all been knocked down and the acres of ground on which they stood ploughed up.

At the end of the long Swallow Drive, however, Meggitt’s assorted factory units are very much alive, even if some of them do look well-worn. However, their rather faded exteriors belie the importance of what is happening inside, where you will find some of the most ground-breaking technology in UK manufacturing.

You will also discover a culture of innovation and bottom-up management that is welding together the disparate parts of a global company that has operations in Asia, the US, Latin America, Europe and of course the UK, where Meggitt plc is headquartered.

Because the company is a Tier 2 components supplier, the Meggitt name may be unfamiliar to anyone outside the world of civil and military aerospace, defence systems, power generation or oil and gas exploration.

Within those arenas, it is a global player of some significance, with an annual turnover of £2bn and growing. Its customers include the US military and all manufacturers of jet aircraft from large, through to regional and business.

If there is a residual sense of wondering how this company ‘came out of nowhere’, it is because its rapid growth has until now largely been the consequence of acquisition.

Deep in the corporate DNA you will find old British brands going back over 160 years, with new additions bringing fresh expertise and technology, to the point where the Bournemouth HQ’d company has strength in depth across all sectors.

So far so good – but a patchwork quilt is not the same as whole cloth, and it is in the transition from one to the other that Meggitt offers revealing insights into how management techniques and a focus on corporate culture and advanced technology can achieve far-reaching goals.

Spinal cord

It is 09.30 on a typical workday morning at Meggitt Aircraft Braking Systems in Coventry. Department heads from around the plant are gathering around an array of microphones suspended from a gantry above their heads. (MABS is a busy place, so amplification is important.)

Site Operations Director Keith Jenkinson leads the meeting, which is called the DLA – Daily Layered Accountability – a structured process by which reports on safety, quality, delivery, inventory and productivity flow from the ground up, informing immediate tactical decision making and long term strategic planning.

It is a classic inverted pyramid management system and is the core event in the Meggitt daily calendar across the globe. The company describes it as its spinal cord. “From workbench to boardroom, the agenda is always the same,” company literature states: “Safety, quality, delivery, inventory, productivity.”

The DLA is, in turn, part of the Meggitt Production System (MPS), which was introduced in 2013 and championed by the newly-installed CEO Stephen Young, who had joined the company as group finance director in 2004.

The MPS deploys techniques familiar to students of lean manufacturing, focusing relentlessly on delivering high quality products to customers with minimum waste.

The early part of Young’s tenure at the top was marred by profit warnings and plunging share prices as global declines in their key aerospace and energy sectors hit revenues.

His strategy for shielding the company against future shocks revolves around stripping out some of the weaker parts of the global corporate patchwork and galvanising the rest into an integrated whole through the MPS. Additionally, he ringfenced funds for technological innovation and formed a new, centralised, aftermarket services business to leverage additional revenues.

His team’s success in delivering this programme across the board has calmed shareholder nerves.

“There was a certain amount of impatience,” he told me, “but a couple of years in, we are able to demonstrate really tangible progress on all fronts. The investors are saying we’re doing the right things, and we’re seeing the right results.”

A key part of this was Young’s hiring last year as chief operating officer Tony Wood, formerly president, aerospace at Rolls-Royce plc. Wood brought with him a total focus on high performance culture, which has helped drive the MPS and other operational initiatives deep into the fabric of the global group.

Cooking with carbon

Touring the MABS facility provides an insight into the kind of long-term thinking required in the aerospace sector. The manufacture of carbon discs for aircraft brakes is long and consumes vast amounts of energy.

Flexible carbon fibre precursor (OPAN) is made into a two-layer non-woven cloth, then carefully converted completely into carbon fibre in a specialised oven. The carbon fibre cloth is then die-cut into circles of carbon matting.

Dozens of layers are loaded into jigs and then cooked in a giant furnace for a month at very high temperatures (the exact temperature is commercially sensitive, but I can tell you it is several hundred degrees Celsius. It consumes a staggering 100 cubic metres of gas every hour.)

Next, the discs are compressed and then re-cooked for another month, at which point they are heat treated at an even higher temperature. They are then machined into full aircraft brake discs that can withstand heat of up to 2,000ºC when brakes are applied.

The proof of Meggitt’s excellence in carbon discs is that it has been awarded the contract to provide wheels and brakes to the new Airbus 321Neo.

The NuCarb technology on which the award was based was developed at Meggitt’s Danville plant in Kentucky. It is an illustration of Meggitt’s global spread, as well as the wisdom of streamlining the various disparate elements of the group into a cohesive and coherent whole.

The company announced earlier this year that is considering its next major step towards making that a physical reality, the creation of what CEO Stephen Young calls a ‘supersite’ in the West Midlands.

This will be a £125m aerospace manufacturing and technology centre, bringing together, and upgrading, many of the operational functions currently based around the UK.

“You’ve been around this factory, full of stuff happening in little corners, with so many walls,” he said. “Just imagine the opportunity to be able to take not just one, but several factories in a region, throw them all up in the air, and start again, using everything we have learned from MPS, everything we’ve learned about factory layout, efficiency, productivity: all those things we’ve always wanted to do, we’ve now got a chance to do.”

“We could do a lot more in the UK than we currently do,” he added. “If the environment is right, if we get the working practices, if we get the support from government, then the UK is a very attractive place to invest.”

Young was at pains to point out that the recent government’s attitude to industry was a vast improvement on what it had been (and he credits former Business Secretary Vince Cable for getting that ball rolling.) That is why all eyes will be on the Industrial Strategy white paper, due this autumn, to see if the current government merits such confidence.

Meggitt’s strategic drivers

Critical to Meggitt’s revival of fortunes in recent years was Stephen Young’s decision to ring fence money to fund the Applied Research and Technology (AR&T) unit, under the direction of chief technology officer Keith Jackson, who promised he could get match-funding from government and the EU to develop ground breaking technologies.

Working with the Advanced Manufacturing Research Centre (AMRC) in Sheffield, the Manufacturing Technology Centre (MTC) in Coventry, the Aerospace Technology Institute (ATI), and with IBM providing the digital architecture, the AR&T has developed new technologies, such as the M4 digital factory programme, which enables each plant to make a much wider array of low-run products (low-runs are typical for many Meggitt products).

Central to this is the Closed Loop Adaptive Assembly Workbench (CLAAW), which uses sensors to inform and record the operator’s work. This data is then fed back into the system to create much greater efficiency and productivity. The CLAAW was spec’d and developed by members of Meggitt’s graduate programme.

One of the key products using CLAAW is the EBrake, which is operated by electric signal rather than traditional hydraulics, allowing for greater operational speed as well as sensor feedback to inform cloud-based maintenance and QC systems.

When I met Keith Jackson at MABS, he proudly showed me his latest development, a 3D printed replacement for the traditional valve that bleeds off excess pressure during reverse thrust landings. The weight saving is 30%, which given its relatively small size may not sound much, but it is a critical step forward in lightweighting aircraft.

The other key growth driver is Meggitt’s Aerospace Customer Services & Support (CSS) division, a new initiative that consolidates Meggitt’s activities in the aircraft spares and repairs market.

Aircraft spares is a huge global business, as cost-conscious airlines increasingly repair or scratch around for used parts from decommissioned aircraft, rather than buy new ones.

Meggitt decided it wanted to be a key player in both repairing and buying and selling its own second-hand parts, so it began to use brokers to buy these parts in the global aircraft parts bazaar (dealers would never have sold to a company that is, effectively, their competition), refurbish and sell them at premium prices to airlines.

Meggitt is now creating global spares distribution and repair hubs in Singapore, Miami and Coventry which offer 24/7/365 service to airline customers. By overlaying the MPS culture of customer-driven service and quality, CSS is beginning to carve out a significant new stream of revenue for the group.

Shrinking supply chain

The final part of the streamlining/integrating process is the supply chain. Meggitt’s translation from a holding company into an integrated manufacturing group coincides with the development of technologies that have radicalised supply chain operations across all industries.

As a Tier 2 supplier, Meggitt is feeling that impact as its OEM customers demand greater connectivity in the supply chain and much tighter terms and conditions.

“We’re getting more standardised contracts coming down from the OEMs that contain tougher performance conditions, with penalties if we fail to deliver the right quality, on time,” Young said, “and that means we need the right kind of supply chain below us.

“We’ve got a lot of mom-and-pop shops currently, whereas what we need is a much smaller number of the right kind of supplier to whom we can flow down the terms and conditions that continue the drive for productivity.

“For instance, we have a thousand suppliers of electronic components, with whom we spend £100m a year. We’re now going to buy most of that £100m worth of components from four.”

From 1,000 suppliers to four – there could be no starker message to SME manufacturers, including mom-and-pop shops, that they need to get with the 4IR programme and massively increase collaboration with, and in many cases consolidation with, peers and competitors.

This supply chain shrinkage is taking place right across the Meggitt group, just as it is across many industry sectors. While that may make it sound as if all the power is flowing up and concentrating at the top of the pile, there is a quiet counterbalancing movement underway in terms of technology.

Simply put, the OEMs are not as agile, nor as innovative, as their suppliers in developing new technology.

“We’re finding increasingly that whereas we used to go to the OEM and say, ‘What do you want in your new engine, what kind of technology are you thinking of?’ they’re actually saying to us, ‘Well why don’t you tell us what you’re working on?’ In the past, the suppliers were OEM-led, we were followers. The pendulum is indeed moving.”

Which might have been a rather fitting metaphor for what is happening to the company, except pendulums eventually swing back. Stephen Young has no intention of that happening to Meggitt.