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Chevening ForumInnovation Centre, University of Bath
Is there a future for UK Is there a future for UK Manufacturing?Manufacturing?
Professor Andrew Graves30th April 2010
Creating and Sustaining Performance Improvement
Catalyst for ChangeCatalyst for Change
I.M.V.P. - MIT’s International Motor Vehicle Programme
A.C.I. - AgileConstructionInitiative
5DAYCAR / ILIPTProgramme
UK L.A.I. with MITLean Aerospace InitiativeDisseminating Disseminating
research research ideas & ideas &
results to results to other other
industriesindustries
LFILean Flight Initiative
Creating WealthCreating Wealth
ManufacturingManufacturing AgricultureAgriculture Mining Mining
Why Manufacturing ?Why Manufacturing ?
Infinite Demand for Manufactured Goods
Drives Innovation and Technical Change Powerful Internal Dynamic - Drives other Sectors
Generates Exports - Balance of Payments
Creates High Value Jobs and Support Industries
KEY TO SUSTAINEDKEY TO SUSTAINED GROWTHGROWTH5 Unique Characteristics5 Unique Characteristics
Queen Mary 2
Ducati 916
Space Shuttle
Concorde
Bullet Train
Per
cent
age
%
Year
13
17
21
25
29
33
37
41Contribution of UK Manufacturing to GDPContribution of UK Manufacturing to GDP
Balance of Payments UK deficit widensBalance of Payments UK deficit widens ---- £ Billion
0.00
2.00
4.00
6.00
8.00
10.00
12.00
2004 Q1
Q2
Q3
Q4
2005 Q1
Q2
Q3
Q4
2006 Q1
Q2
Q3
(£) Billion
Key Success Factors Affecting IndustryKey Success Factors Affecting Industry
Finance Market
Distortion
InternationalCollaboration
Technology Competitiveness
GovernmentPolicy
Operating & Skills Competitiveness
Relationshipswithin Industry
IndustrialIndustrialCompetitivenessCompetitiveness
GovernmentGovernmentIndustryIndustry
World Class Manufacturing & EngineeringWorld Class Manufacturing & Engineering
Reduced CostsReduced Costs Improved QualityImproved Quality Reduced Cycle TimeReduced Cycle Time Minimise Waste & Minimise Waste &
Environmental Pollution Environmental Pollution
UK MANUFACTURERSUK MANUFACTURERS
Not all World-classNot all World-class Productivity / Quality CrisisProductivity / Quality Crisis Too few ProducersToo few Producers
How did we get hereHow did we get here
Crisis ManagementCrisis Management
1. Denial
2. Anger
3. Prozac
4. Resolution
The BIG BANG !The BIG BANG !19861986
Deregulation of Financial Markets
20082008 Collapse of Lehman Brothers
The “Lending Game” finally stops.. !The “Lending Game” finally stops.. !September 2008September 2008
Takeover of Merrill Lynch by Bank of America ‘Nationalization’ of Fannie Mae & Freddie Mac –
50% of the $12 trillion mortgage market in the US Bank of England offers £5 billion emergency lending £50 billion wiped off London shares FTSE 100 FALLS over 212 points Lehman London (over 5000 job losses) –
highest since Rover
UK has £175 billion budget deficit (£1.3 trillion by 2014)
HM Treasury spent £117 billion buying bank shares
UK taxpayers liable for £850 billion of liabilities
Family liability £5,530 to £40,000 !
WW II debt repaid – December 2006
The “Lending Game” finally stops.. !The “Lending Game” finally stops.. !September 2008September 2008
What is to be doneWhat is to be done
Financial Institutions ?
Knowledge Economy ?
Manufacturing?
The Reality:The Reality: “ China & India train more than 500,000 Engineering graduates per year and the UK train 20,000”
“ The Steam Engine was the Knowledge Economy! ”
The Knowledge Economy DelusionThe Knowledge Economy Delusion
The Myth:The Myth: “ Economy based on creating, evaluating & trading knowledge
”
“ The UK sells knowledge and makes nothing - but has skills
that other countries will pay for ”
INTELLECTUALINTELLECTUAL
PHYSICALPHYSICAL 1stTIER
2ndTIER
FOUNDRY MINES
OUTSOURCE CAPACITY OR KNOWLEDGE ?ASSEMBLER
INDUSTRY &UNIVERSITIES
R & D
UNIVERSITIES
SCHOOLS &COLLEGES
REGIONALSOCIALINFRA-
STRUCTURE
Two Supply Chains - Physical & Intellectual
Industry ChallengesIndustry Challenges
““You learn by TRYING – You learn by TRYING – not by BUYING” not by BUYING”
To establish a national network of internationally-recognised Institutes for the creation of world class knowledge in the areas of Innovation, Competitiveness and Product Development.
To increase the intellectual capital and capability of business, through an industry-government-academia partnership for Knowledge Creation and Transfer.
To improve peoples lives through the innovation of real world products, systems and services.
The VisionThe Vision
Aerospace
Automotive
Construction
Food
Medical Instruments
I.T. / Software
Materials Processing
Multi-Media
Pharmaceuticals
Telecommunications
Industries TargetedIndustries Targeted
Government Local Agencies
Government Europe UK
Industry UniversitiesColleges
Develop &Demonstrate NEW
INSTITUTE INSTITUTE PROVIDES THEPROVIDES THEINTEGRATING INTEGRATING
FUNCTIONFUNCTION
Proof of ConceptScale-up
Real Costing
• MATERIALS• PROCESSES• SKILLS
COMPLEMENTARY SKILLS
Institute for ManufacturingInstitute for Manufacturing
World-class Institutes designed to:
Develop innovative ideas for organisations dependent upon advanced technology for manufacturing or proficient, agile operations
Provide a focus for knowledge creation, technology transfer and innovation
Support both public and private sectors
An exemplar of advanced education / training in applied engineering science and technology
MissionMission
VisionVision
Professional Professional knowledgeknowledge
IntegrityIntegrity
VISIONVISION
Right Vision & Goals
Targets – clearly articulated
Build: short, medium and long-term strategies
Not “joined-up” tactics
“ Strategy without tactics is the slowest route to Victory
Tactics without STRATEGY is the noise before defeat ”
Sun Tzu5th BC Military Strategist
The Century of Revolutionary ChangeThe Century of Revolutionary Change1900’sFrom Craft to Mass Production
- From Steam to Oil- Telecoms- Automobile- Flight- Radio- Electricity
1940’s Nuclear Power Television Jet Engine Medical Science Space Exploration
2000’s1960’sFrom Mass to Lean Production
- Mass Transport (Boeing 747)- Man on the Moon- ICT, Internet, Telecoms- Globalisation