The military-industrial complex

Posted on 3 Feb 2010 by The Manufacturer

Having established a leading position in the military and aerospace arena, 2010 finds Amphenol Ltd taking its industryleading interconnect technologies to harsh industrial markets. Edward Machin investigates a manufacturer putting both processes and people at the heart of its success.

Whitstable-based Amphenol Ltd is a UK subsidiary of the Amphenol Group, a $3bn turnover global leader in the manufacture of interconnect systems — including electrical, electronic and fibre optic connectors, coaxial and flat-ribbon cables, among others. As one of over 100 operating sites under the corporation umbrella, Amphenol Ltd has traditionally focused on the production of circular connector technologies for the global military and aerospace (Mil-Aero) markets.

Such a remit has reaped great success, with Amphenol content found in most major platform, systems and customer-base within the Mil-Aero market — BAE Systems, General Dynamics and Thales, to name but three.

Nonetheless, recent years have seen the company’s UK division leveraging such expertise and product capabilities to diversify into adjacent markets; primarily industrial, but also renewable energy and oil & gas.

Says Sales and Marketing Director, Chris Billinge, “The decision to diversify, and therefore expand what our customers understand Amphenol Ltd to represent, is indicative of a common theme within the Group’s target markets — namely the manufacture of a variety of applications for harsh environments. As such, the company has built on the core competencies, knowledge and production techniques that have served us so well in the Mil-Aero markets and are applying them to, for example, the rail mass transit, factory automation, motion control and natural resource exploration sectors.”

“Indeed, it is this culture of diversification within the Group that represents perhaps our greatest strength. Enabling Amphenol to remain a global leader according to market share in a year where international markets have been particularly depressed, our financial strength and share of business, relative to competition, is growing healthily.” Central to Amphenol Ltd’s capacity to diversify with relative ease rests on the fact that while the 109 operating facilities within the corporate structure are largely autonomous in their operations, they remain highly interconnected. Explains Bob Thompson, Business Development Manager, “While each manufacturing site has to work within corporate guidelines, we take great pride in the fact that there exists a pronounced entrepreneurial attitude to strategic management.” Subsidiaries are encouraged to run their businesses in the way that best suits local market conditions — something that Amphenol Ltd is currently taking a strong lead on. Says Thompson, “Operating with a great degree of autonomy, we can utilise our extensive local strengths while drawing on the product diversity and capabilities of the Group as a whole. Such gives us the best of both worlds; a knowledge and technology share with our sister companies, yet retaining ultimate control over our own processes.”

Continuous efficiency
Says Billinge, “A particularly attractive feature of our Whitstable facility is the fact that it has full end-to-end manufacturing capacity. As with the majority of Amphenol operations, such capabilities highlight a sector-leading manufacturer, offering a particular advantage in the domestic military market — with a preference among clients to contract domestic manufacturers due to increased project sensitivity.” Such has been a major feature of UOR (Urgent Operational Requirements) orders in 2009, whereby production and lead times must be reduced significantly.

Coupled with the fact that Amphenol is in full control of its supply chain, the company’s cradle to grave manufacturing capabilities are seen as hugely advantageous by its military contractors and, increasingly, the industrial market.

Ultimately, says Billinge, the best of breed reputation that Amphenol enjoys would be made considerably more difficult were it not for a continued investment in both the company’s manufacturing processes and wider staff engagement initiatives. “Together with the ongoing financial outlay in upgrading processes and machinery, vital to our continuous improvement drive is the environment in which we work on a day-to-day basis. By targeting such intangibles, we have seen a steady improvement in product quality — albeit for a business already recognised for its precision of manufacture.”

To further effect this ethos of continual benchmarking, in 2008 Amphenol became a SC21 signatory — a programme designed to accelerate the competitiveness of the aerospace & defence industry by raising the performance of its supply chains.

However, says Billinge, such an initiative has enabled the company to accelerate its lean manufacturing and efficiency drives beyond simply the supply chain. “An area Amphenol specifically targeted for continuous improvement was the shop floor, where we encourage the manufacturing teams to meet regularly; in some cases on a daily basis,” he says.

“Issues are raised, ideas brought up and actions implemented, all within an open forum. Moreover, by displaying every continuous improvement advancement we make within the facility, staff — from management to those on the production lines — are given both greater responsibility and opportunities to share in the company’s successes.” Employing a predominantly flat organisational structure, Amphenol, says Billinge, “Seek to operate a culture of inclusiveness, as we understand that, above all, it is the people in our business who make the difference.

As such, the company has invested in training staff to NVQ Level 4 in Business Improvement. The course is open to all employees; the first intake of 12 are nearing completion, with the second course scheduled to start in February 2010. Such initiatives ensure we are developing the future experience and skills that will continue to see Amphenol positioned as a best in class manufacturer for both military and industrial markets.”

People power
The company-wide investment in people will, says Billinge, “Remain critical to Amphenol’s future. Indeed, developing skills across every level within the organisation is arguably the feature of this business that most represents the key to our ongoing achievements.

Andy Bragg, Managing Director of Amphenol Limited, says, “Alongside the dedication to staff advancement, we retain a balanced approach as to how Amphenol invests in manufacturing and the need of our business to be competitive in a global environment.

The company is under no illusion that there are times when it is more cost effective to manufacture components in other territories than the UK. Indeed, 70% of the Group’s production facilities are located in lower cost economies.

This enables Amphenol Ltd to create a manufacturing profile which can combine our end-to-end capabilities in the UK with imported, lower cost production for less technical items.” Accordingly, 20% of Amphenol Ltd’s component manufacturing — primarily the higher volume, more mature products — is currently undertaken on foreign soil. In the military arena, for example, the company’s contracts may include an offset requirement, i.e. a percentage of the manufacturing processes must be undertaken in the client’s territory.

Says Billinge, “Ultimately, we are able to remain an industry leader while looking after our own, so to speak — both of which have been central to the company since its inception. As well as being welcomed by the workforce, however, our customers recognise and appreciate that we are continually investing in skills and developing our processes while retaining the majority of Amphenol’s manufacturing in the UK. This has been a defining feature of both our Mil-Aero and harsh industrial interconnect operations, and will ensure Amphenol Ltd remains the leading manufacturer in our chosen markets long into the twenty-first century.”