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