Aerospace sector shows the way forward for UK productivity

Posted on 7 Nov 2018 by The Manufacturer

Sharing in Growth (SiG) conference examined how manufacturers and government can work together to show they’re ‘Beating the Productivity Challenge.’

Business Secretary Greg Clarke speaking at the Sharing in Growth conference - image courtesy of SiG.
Business Secretary Greg Clarke speaking at the Sharing in Growth conference – image courtesy of SiG.

Aerospace companies gathered yesterday to learn and share stories of how the Sharing in Growth (SiG) programme is radically transforming the productivity of the British aerospace sector.

Greg Clarke, the BEIS Secretary and one of the conference’s keynote speakers, said SiG’s cooperation with the aerospace sector showed that ‘when industry and government work together, you can crack problems that were insuperable.’

“Sharing in Growth continues to deliver exceptional results – securing contracts worth more than £3bn, boosting productivity, creating quality jobs and helping companies grow by five times the industry average.

“The UK is a world leader in aerospace manufacturing and this programme is a fantastic example of our modern Industrial Strategy in action – bringing the Government and industry together to build on our excellent reputation and ensure we reap the rewards of future opportunities.”

His comments were echoed by Andy Page, CEO of Sharing in Growth, who said SiG was “Red Bull for productivity.” But he warned that though the world aerospace sector is set for inexorable growth, the British aerospace industry cannot afford complacency if it is to fight competition from low-cost rivals in China and India.

“We’re behind in the supply chain” he warned, citing the UK’s higher labour costs. He said the British aerospace sector must be as innovative as their foreign rivals if they’re to stay in business.

He said that SiG showed the way forward and that companies who had taken advantage of the programme bettered their peers in sales, net worth, sales per person and operating margin. For every £50m of support provided by SiG, the UK economy benefits by up to £3bn in extra economic value.

Andy Page, CEO of Sharing in Growth (SiG) - He describes SiG as “Red Bull for productivity,” - image courtesy of SiG.
Andy Page, CEO of Sharing in Growth (SiG) – He describes SiG as “Red Bull for productivity,” – image courtesy of SiG.

SiG is particularly vital he said, because the lack of productivity growth in the UK is one of the most serious issues affecting the UK economy. According to SiG, companies that have participated in their programme have grown their productivity at five-times the national average. Since 2008, productivity has increased by only 0.2% per annum compared to 2% a year pre-crisis.

Colin Smith CBE, Chair of Aerospace Growth Partnership, said that companies cannot afford to rest on their laurels when it came to productivity. It’s no longer acceptable he stated to have a 99% efficient supply chain or to design weaker technology, because “if you’re an A350 flying to Perth, and you’re one-tenth less fuel efficient, you end up in the Atlantic.”

The conference also saw the announcement of a major contract secured thanks to Sharing in Growth; an £80m six-year deal between Rolls-Royce Civil Aerospace and Glasgow-based Castle Precision Engineering.

The Scottish firm’s Company Director Yan Tiefenbrun, whose grandfather started the firm, says Sharing in Growth had been a vital catalyst behind his company’s growth:

“SiG shows you what good looks like and they give you a framework for what an absolute ideal business model looks like.”

He added that SiG was “almost like seeing a corner of a painting, someone tearing off the cover of the whole thing and relaying the whole thing and how it connects all together. That’s best practice being revealed, and it’s been a gamechanger for us.”

Rolls Royce CEO Warren East (L) with Castle Precision Engineering's Yan Tiefenbrun (R) - image courtesy of SiG.
Rolls Royce CEO Warren East (L) with Castle Precision Engineering’s Yan Tiefenbrun (R) – image courtesy of SiG.

Furthering his comments, Produmax’s owner Mandy Ridyard said SiG “gives us that burning ambition. It says your painting can be in this gallery and that gallery. It can be in galleries all over the world…SiG gives us that confidence to start delivering contracts like Jan’s delivered.”

Earlier in the day, she told the audience gathered at the BEIS how her company had been transformed by SiG. She said that before Produmax signed up to the programme, her company, which makes components for the aerospace industry, were beset with problems like productivity, a lack of factory space, and weak communication between staff.

The lack of factory space was such that in the company’s old headquarters, any new large equipment installation would require the factory’s roof to be taken off, because the doors were all too narrow through which to fit the equipment.

With Sharing in Growth’s help, the Yorkshire business made a complete physical transformation of their office and factory. They moved into a larger factory, started to share best practice with local companies, and became more brand-driven.

But more importantly, it was the mental change instituted by SiG – as Mandy describes it, “to change decisions based on gut feel to data-driven,” – that most influenced the company’s ethos.

The improvements have been revolutionary. Produmax has won or retained £53m in contracts; turnover and headcount have risen by 55%, set-up time is down by three-quarters 75%, and more radically, lead time has decreased from 31 days to 27 hours.

The changes brought by SiG’s guidance have made Mandy Ridyard optimistic that her company, and the British aerospace sector, will continue to grow.

“There are loads of threats that could stop us, halt us, or delay us, but the tools that we’ve got through Sharing in Growth will help us identify ways to overcome them…There’s no reason why we can’t compete with other low-cost economies. We’ve onshored work from India, China and the Philippines and that’s great for UK manufacturing.”

Reporting by Harry Wise