Multinational microscopy manufacturer Carl Zeiss provides the perfect example of the low volume, high value, advanced manufacturing which the UK is looking to base its future economic prosperity upon. Glen Jamieson takes a closer look at some recent initiatives at the company’s site in Cambridge.
In 1964, Cambridge Instruments (now Zeiss) introduced the first Scanning Electron Microscope to the commercial market. Operations manager Daren Sheward started at the company some twenty years ago as an apprentice and has seen the business and its products evolve.
Unchanged by recession, the division has introduced new cost saving, quality and service improvement strategies with lean activities, and for the first time since Daren began, it has employed three apprentices in an attempt to blood new young talent into its development. It is clear that the company takes enormous pride in the quality of their products, which is faithfully mirrored by the care the company provides for the people who make it happen.
There are six different types of microscopes manufactured at Carl Zeiss’s Nano Technology Systems Division in Cambridge, all with different ranges of applications within the area of imaging and flexibility. These are large industrialsized Scanning Electron Microscopes, weighing up to 500kg a piece, costing from £60,000-£200,000, which are used in fields such as Materials Analysis, Life Sciences, Semiconductor Technology and Quality Assurance. Its most powerful products can pick up items up to a nanometre in size – that’s a billionth of a metre to you and me. Things that are that big tend to be DNA or atoms.
“Our products get used for a huge range of applications,” says Daren.
“Most of the products are used within Life Sciences and Material Analysis but that can mean anything from looking at brain tumours in mice to particle scanning surfaces to look for diamonds and identifying areas to drill.” The turnover for the Cambridge site last year was £24m and they expect £25m or £26m this year. As a large proportion of its customer base is made up of University research departments and laboratories, Daren says that the company “didn’t really suffer too much” from the recession. “Academia was funding lots of research laboratories in universities around the world and their budgets didn’t really go down,” he says. “We picked up lots of orders from these fields but we lost some orders as industries closed down, dropping around 10-15% in 2008 and 2009, but nothing massive.” In fact, things are now better than ever for Zeiss and this year the company expects a 30% increase on product output. Two years ago the site would make around 15 microscopes each month; last year, in the recession, it got pegged back to 13. Now it’s making between 15 and 20; next year it will be 26 plus. “That’s a massive growth over a short period of time,” says Daren.
Lean on me
The company’s lean activities – led by a decision to outsource parts of the manufacture – are accredited with enabling this progression. “Several decades ago we would build everything on site in batches of 5, 10 or 15. But now we’ve introduced this one-pieceflow system throughout the factory.
We’re trying to build one machine a day, so we’ve outsourced a vast majority of the assembly activities to make room for new products.” The company decided to outsource fundamentally 50% of the assembly – the electronic and vacuum systems.
This decision has certainly proved valuable, both in terms of cost reduction and speed of output. In the first year of outsourcing, the Cambridge division saved 4%, the second year an additional 8%, and the third an additional 12% – saving a total of 24% over the three years.
“So, quite an aggressive saving,” says Daren. “Although it wasn’t just the best price but also the best fit.” And it is not just Zeiss which benefits: “We helped the suppliers achieve huge cost reductions within the design and manufacture of the product so that they profit as well as we do.” There are a few supply issues that need to be ironed out though. “It’s been difficult sometimes getting the suppliers on board to understand our requirements and demand,” says Daren. “At the moment I’ve got more late supply than on-time deliveries.” Hence, a number of measures are now being implemented which should ensure consistency. “We’re working very hard at the moment to improve our relationship with suppliers and we are looking at the possibility of rewarding and punishing good service through our cost structure where necessary. We have production engineers who visit and train the suppliers, keeping in contact with them weekly if not daily. We arrange quality workshops in the suppliers’ site, so they can rectify the source of a problem before we even know about it.
Major suppliers from Europe and the UK also join us for workshops at our site, where we discuss ideas to be implemented within their own plant”.
Zeiss has also begun diffusing further problems by outsourcing to multiple suppliers, spreading the risk of late deliveries. “If we have a major component that we know is on a long lead time and we need lots of them what we tend to do is split the volume, give half to one and half to another”.
By outsourcing the non core activities, Zeiss can concentrate on ensuring the best possible quality on what it calls “the Crown Jewels” – the building of the electron beam column, the final testing, and the configuration of the machine to customer order. “This is the high-end assembly part of it,” says Daren, “and this is where you couldn’t give it to someone else to do. We have to be in full control of our own standards so we will always keep this in-house.”
The next generation
Carl Zeiss has very high staff retention rates. The average employee service across the company is 25+ years and the average age is 50. “I’ve got an ageing workforce, but on the plus side I’ve got lots of experience,” says Daren. “We are very good at realising employee potential, and we rarely lose any employees, except to natural attrition, which I am very pleased about it. We re-train and re-educate staff and move them across departments as required, it’s a good news story all round”.
But there are problems with an ageing workforce of course – principally, inevitably, retirement will threaten your numbers. To counteract this, the division has employed three apprentices for the first time since Daren himself was an apprentice twenty years ago. The young apprentices are students from electronics and engineering courses, short-listed by their local college. They are under a fiveyear plan where they each work in one of the four main areas of the business Production, Engineering, Spares, Logistics and with mentoring they will gain great knowledge and experience that will set them up suitably for a long successful career within the company.
They get qualifications too. They are sent back to college one day a week for three years through which they’ll earn Advanced Apprenticeship status, and then they have the option to stay on for another year to attain a degree.
Daren anticipates that the apprentices will be destined to become Technical Engineers in Operations, and wants to later take on apprentices to eventually employ in R&D. “It’s a big investment and it really pleases me. They’ve been here for four months now and it’s working really well. There are seven of us on the management team and many of us were apprentices, so clearly we see it as a valuable route to ensuring we get the right sort of talent, trained our way.” In fact, it’s the attitude of the company to its workforce and the talent they hold which Daren attributes much of the company’s success. Primarily, the managers ensure the whole team is actively involved in the forward thinking and developing of the business. “Involvement”, Daren says, “is the key. We have a great atmosphere here, and the working relations between everybody are great. Some of the older guys might struggle with change but we talk early on and come up with ideas together”. Team bonding sessions are seen as so important that every once in while they’ll even take precedent over production.
It should come as no surprise, given their industrial prowess, though we’ll still say it quietly: if the UK is looking for a light to lead the way towards an economy based largely on high value advanced manufacturing, a German company could be the answer – albeit one that’s based in Cambridge.
Carl Zeiss’s forward thinking improvements integrated within a positive working environment, will undoubtedly enhance their abilities to continue providing a high quality product at a fast and efficient output and this is something other UK companies would do well to follow.