In partnership with

Evalua on of the

and Engineering (IME) ProgrammeInnova on in Manufacturing

Table of Contents Executive Summary

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1. Introduction

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2. Programme Overview 2.1. UKCES Futures Programme 2.2. Innovation in Manufacturing and Engineering (IME) Programme 2.3. North West Advanced Engineering and Manufacturing (AEM) – Target audience 2.4. Learning Model 2.5. Components of the IME Programme

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3. SME Recruitment

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4. Discussion and analysis 4.1. Induction Day and Overnight Experiential 4.2. Skills Workshops 4.3. Departmental Visits and Student Project Option 4.4. Visit to the AMRC 4.5. Visit to BAE Systems 4.6. Visit to Siemens 4.7. Masterclasses 4.8. Graduation Event

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5. Impact and Outcomes of IME

5.1. Impact on Innovation 5.2. Impact on Management and Commercialisation 5.3. Productivity Agenda 5.4. Development of the North West AMRC 5.5. Science and Innovation Audits 5.6. UKCES Parliament Reports & Future Collaboration

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6. BAE Systems Objectives and Collaboration Between BAE Systems and Lancaster University

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7. Conclusions

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Case Studies 19

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Executive Summary

The Innovation in Manufacturing and Engineering (IME) programme was a collaborative initiative with co-investment from the UK Commission for Employment and Skills (UKCES), led by Lancaster University in partnership with BAE Systems (Operations) Ltd. The programme ran from October 2015 until June 2016. The IME programme aimed to increase the innovation capacity of owners and managers of small and medium sized enterprises (SMEs) in the North West of England. Focusing on the Advanced Engineering and Manufacturing sector, the university’s renowned former leadership development programme, LEAD, has been adapted to help develop non-technical skills required by firms to support and drive innovation.A cohort of 19 participants from 18 SMEs completed the IME programme. Through active, experiential learning comprising masterclasses, workshops, peer shadowing, visits, exchanges and action learning groups, participants developed their strategic thinking, growth planning skills, innovation capacity and leadership and management skills. The IME programme also supported access for SMEs to regional and national innovation infrastructures, including BAE Systems at Samlesbury, Siemens at Congleton and the Advanced Manufacturing Research Centre (AMRC) at Sheffield. IME recognised the important role that regional anchor institutions, such as large corporates and universities, can play in attracting and encouraging regional SMEs to develop their skills, improve their workplace practices and learn from each other in a trusted peer network. It also played an important role in raising awareness of innovation infrastructure, such as Catapult Centres, including the AMRC at Sheffield, and how they can be accessed by SMEs. From expertise developed through the delivery of IME, Lancaster University will continue to be a conduit, connecting SMEs with anchor organisations such as BAE Systems, Siemens and innovation infrastructure such as the AMRC or other catapults.

1. Introduction This report provides results of the evaluation of the Innovation in Manufacturing and Engineering (IME) Programme which is part of the UKCES Futures Programme productivity challenge 4: Skills for Innovation in Manufacturing. The evaluation was undertaken at the request of the UKCES Futures Programme.

2. Programme Overview

The IME programme was focused on the development of the non-technical skills required to support innovation. The programme concentrated on the business itself and the personal development of the participant, providing a framework to increase profitability, innovation and business growth.

2.1. UKCES Futures Programme In 2015 UKCES launched the productivity challenge 4: Skills for Innovation in Manufacturing through the Futures Programme. The challenge focuses on new ways of developing the skills and business practices needed to maximise the value of innovation to the UK economy. Creativity and innovation are critical in British industry, but the evidence suggests that we lack some of the skills to get the best out of our creative people or to commercialise innovation.

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2.2. Innovation in Manufacturing and Engineering (IME) Programme

The Innovation in Manufacturing and Engineering (IME) Programme is a collaborative initiative with co-investment from the UK Commission for Employment and Skills (UKCES) and is led by Lancaster University in partnership with BAE Systems. Lancaster University Management School (LUMS) and the Engineering Department, in partnership with BAE Systems (Operations) Ltd, has developed IME to focus on developing the innovation capacity of small and medium sized enterprises (SMEs) owner managers, in the Advanced Engineering and Manufacturing sector, in the North West of England. BAE Systems in partnership with Lancaster University developed and delivered a peer network and management programme designed to foster an innovation-oriented culture for ambitious growth-oriented SMEs in the advanced engineering and manufacturing (AEM) sector. The programme also engaged with the Engineering Department at Lancaster University. The project gave the capacity to build on the University’s track-record of supporting the growth of advanced manufacturing SMEs across Lancashire, the Northwest and beyond, through innovation and collaborative R&D programmes. The IME programme was based on LUMS’ integrated learning model employed with success in the renowned, former, flagship leadership and management programme, LEAD. An independent evaluation of LEAD showed that participants experienced an increase in profit, turnover, employment and productivity. Since 2004 the LEAD programme has up-skilled 1,700 businesses across the UK.

The aims of the IME programme for North West AEM SMEs:

- Focuses on the development of non-technical skills required to support and drive innovation - Encourage focus on the business itself (strategy) along-side the personal development of the

owner-manager - Draw on the experiences and knowledge of participants, and enables them to learn from each

other - Integrate active learning, supported by Lancaster University, BAE Systems, Siemens and the High

Value Manufacturing Catapult, the Advanced Manufacturing Research Centre (AMRC) at Sheffield

The IME programme attracted a broad cross section of SME owner-managers and key decision makers from the advanced engineering and manufacturing (AEM) sector in the North West of England. The businesses recruited to the programme all have an identified need to expand innovative capacity whether through product or people development. 2.3. North West Advanced Engineering and Manufacturing (AEM) – Target

audience A recent UKCES Insights report identified key challenges facing AEM SMEs:

- Acquiring strategic management skills which enable them to grow - Identifying longer term drivers of change that could impact upon their businesses - Inbuilt resistance to change at a strategic level.

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The lack of innovation capability in AEM SMEs is particularly relevant to the North West due to significant employment in the sector which is worth £16Bn (North West Manufacturing 2012). The recent Hauser Review of the catapult network highlighted the limited SME engagement due to both physical distance and a lack of clarity regarding their value. BAE Systems had been leading the development of the £12.5M Pilot Advanced Engineering and Manufacturing Technology Exploitation Centre (AEM-TEC), now known as the North West Advanced Manufacturing Research Centre (NW-AMRC), on the Lancashire Enterprise Zone at Samlesbury. This Centre is seen as critical to address the innovation and operational efficiency challenges facing Lancashire’s AEM sector (with a focus on SMEs). The AEM-TEC, now NW-AMRC, has been identified in the Lancashire Strategic Economic Plan and has a commitment in principle for future Local Growth Deal funding. Lancaster University and Sheffield University are now collaborating to take the concept of the NW-AMRC forward. The development will build upon Sheffield University’s well established Advanced Manufacturing Research Centre (AMRC) and it is proposed that it will act as a gateway to the High Value Manufacturing Catapult (HVMC). The absorptive capacity of Lancashire and North West based AEM SMEs to be innovative needs to be improved to effectively engage with NW-AMRC once it is established. The IME programme was aimed at North West based AEM SMEs lacking strategic innovation and management capacity To qualify for attending the IME programme, SMEs had to fulfil the following criteria:

- They had to be an established SME located in the North West - They had to have fewer than 250 employees and less than £34m annual turnover - They had to be an Independent Enterprise (i.e. not owned by another company or group)

2.4. Learning Model

The LEAD Programme was tailored for AEM SMEs to ensure innovation is part of the programme. The programme draws heavily on foundational research into management and entrepreneurial learning undertaken by the Lancaster University Management School. LEAD has been rolled-out successfully across the UK, and recognised by national and international awards. LEAD’s integrated learning model uses different formats to maximise the fact that people learn in different ways giving equal priority to experiential learning and reflective practise. Typically participants have come from a diverse range of sectors. External evaluation of previous LEAD participants found around half of the survey respondents indicated an increase in sales turnover since joining LEAD. Across all businesses, the mean annual change in sales is £105,000, which corresponds to a growth rate of 3.5% a year in real terms. Lancaster University was recently recognised for its excellence in SME engagement through the attainment of the Small Business Charter Gold Award, one of only five universities to achieve this nationally. The University has a track record in delivering innovation programmes that promote openness and confidentiality among participants that, in turn, enables trust to accrue and long-term relationships to emerge. The specific purpose of IME was to provide an environment for sharing

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knowledge and stimulating interactions within the innovation system leading to increased growth and productivity. The programme drew upon the expertise of the Engineering Department at Lancaster and built upon their significant track-record of supporting the growth of advanced manufacturing SMEs across Lancashire, the North West and beyond, through innovation and collaborative R&D programmes.

The pedagogy of the programme is that we are asking large organisations to set innovation challenges which the SME participants will work on and we anticipate quantifiable benefits for both parties.

2.5. Components of the IME Programme The IME programme activities ran from October 2015 until June 2016 and were tailored to meet the needs for AEM SMEs. This innovative programme integrated active teaching with practice, encouraging participants to relate their learning to their own situations. In addition, it drew on the personal experiences and knowledge of participants, enabling them to learn from one another as part of a trusting peer network. 18 companies (19 participants) of North West based AEM SMEs took part in the IME programme with the objectives to enhance:

Leadership and management skills Innovative capacity Strategic thinking and growth planning skills Insights into innovation and management processes Inspiration to test new ideas/ more creative approaches Understanding of how the proposed NW-AMRC and HVMC Network can help them to recognise

market opportunities and develop cost effective responses Key elements of the programme included:

1. Overnight experiential – designed to bond the cohort and start to build trust in the peer network

2. Business Growth Masterclasses – concentrating on issues such as operations, marketing, financial planning, employment law, strategy and intellectual property.

3. Leadership & Innovation Masterclasses – delivered by inspirational business and academic speakers who share their own leadership and innovation journeys and experiences

4. Action Learning Groups – who met to discuss real business issues in a confidential and trusting environment, supported by a skilled facilitator

5. Shadowing and Exchanges – focused on both behavioural and cultural learning but also process driven shadowing would focus on operations and manufacturing

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6. Innovation Challenges – will challenge participants to identify new approaches, such as open innovation, to increase absorptive capacity and drive growth within their own businesses

7. Workshops - to address the key issues facing SMEs supported with a range of business tools including strategic planning sessions. These workshops included for instance a workshop on LinkedIn, additive manufacturing (3D) and protecting intellectual property.

In the development of the programme we included activities to enhance innovation capacity within AEM SMEs including facilitated visits to BAE Systems, Siemens and the AMRC at Sheffield, part of the High Value Manufacturing Catapult. The visits were an opportunity to enhance the approach larger and smaller organisations can adapt to working together and we found that both the SMEs and large companies benefitted from this. There was the further aim to develop a larger network of 100 AEM SMEs via less intensive involvement focusing on masterclasses. The IME programme was able to recruit an additional 76 SMEs into a wider network. These SMEs had access to innovation processes, a peer network and awareness of NW-AMRC and HVMC network capabilities.

3. SME recruitment Recruitment of the 18 companies (19 members) of the cohort took place from July – September 2015, utilising the networks, contacts and data that existed within the partnership and at Lancaster University. Of the 19 participants 7 are owners of the company. The other participants are either in the role of the Managing Director or in another managerial role. The diversity of the SMEs engaged ranged from a manufacturer of pressure-sensitive safety products, with 17 employees and a £2 million turnover, to a micro business with three employees and a £100k turnover who manufactures tools for the aerospace industry.

Supply chain networks were involved in this programme with the main emphasis being on those networks provided through BAE Systems, which included the North West Aerospace Alliance, Advanced Manufacturing Research Centre, Manufacturing Technology Centre, Manufacturing Advisory Service and Lloyds Banks and, via the University’s networks, Lancashire County Council and NatWest Bank. The supply chain network reaction has been positive with the main feedback being that there is a gap in the market such as this to engage large anchor organisations with SMEs.

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The overnight experiential – Nov’15

4. Discussion and analysis The following section of the evaluation report summarises the success of the programme and discusses challenges the delivery team and the delegates have faced during the programme. Key elements of the IME programme process will also be discussed and analysed more deeply.

4.1. Induction Day and Overnight Experiential Prior to the programme commencing the Programme Director delivered a half day induction workshop at Lancaster University which involved setting the scene for the programme and the delivery team’s expectations for delegate participation. This was an opportunity for the group to find out more about each other, to share something about them personally and help in the building up of trust and confidence to be part of a new network. The Overnight Experiential was attended by all delegates and delivered by an experienced external tutor and the Programme Director. The main objectives were the following:

- Construct a healthy balance of discussion and debate about leadership within each of the businesses.

- Take part in team building exercises designed to accelerate trust.

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- Provide an opportunity for delegates to get to know each other and each other’s businesses within a ‘confidential’ and ‘safe’ environment

- Form a platform for future interactions within the IME programme as well as on LinkedIn and connecting outside of the structured IME timetable.

- Through a series of activities different forms of leadership and management were identified, explored and discussed. Delegates were also introduced to theory surrounding SME leadership and explored personal time-lines.

- Delegates were introduced to reflective practice and began to understand why this is important, in order to constantly learn from experiences.

- Business models, innovation theory and the concept of open innovation were introduced. - Delegates were introduced to key staff from BAE Systems

Overnight Experiential, IME delegates and the external facilitator

4.2. Skills workshops As part of the IME programme the following skills workshops were organised for the participants:

- LinkedIn - Access to Lancaster University student talent - Introduction to Innovation and the Innovation Exchange - Defining and enhancing innovation capability - Operations & Theory of Constraints - Engineering; Additive Manufacturing - Launching new products and services - Protecting Your Intellectual Property - The rise of the machine delivered by James Whittaker, Technical Evangelist, Microsoft

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4.3. Departmental Visits and Student Project Option

To enable delegates to engage in wider networks and opportunities available to them throughout Lancaster University a series of departmental visits were organised in Chemistry, the School of Computing and Communications and Engineering, with presentations also from the Physics Department. Individuals were shown the facilities, equipment and business resources available to them as part of the IME programme. The delegates were also given information on Student Consultancy Projects and the benefits of these to their business. The IME delegates had the opportunity to develop Student Projects to support innovation activity. Student Projects can assist SMEs in a predefined area and are a good opportunity to engage with Lancaster University. Five members of the group have used the opportunity to take up a Student Project or have worked directly with technical staff.

4.4. Visit to the AMRC The IME visit to the AMRC in Sheffield explored the benefits and opportunities associated with collaboration. The AMRC is an environment in which SMEs can participate in consortia looking to innovate. There are several other possibilities of engagement such as the AMRC Forum or simply the use of the AMRC on their own. Over 100 SMEs have apprentices currently in training at the AMRC Apprentice Training Centre and AMRC-Castings has a membership that includes most of the foundries in the UK, many of which are SMEs. BAE Systems shaped the agenda for the day in dialogue with the AMRC, in order that focus could be given to how the AMRC can support collaboration between large and small organisations. As a precursor to the SME industrial visit to BAE later in the IME programme, the tour included examples of BAE innovations developed at the AMRC and then delivered to BAE Samlesbury. The visit was hosted by the AMRC’s SME Liaison Manager who explained their role in the facilitation of research networks and helping SMEs to access external funding opportunities. The owner of a local Sheffield SME shared his first-hand experience of the benefits associated with the research centre and collaborative innovation, and where the potential opportunities lie. The tour of the AMRC campus explored machining science, composite development and a number of case studies demonstrating the benefits of previous SME engagement. A discussion was held on ways the AMRC could improve its reach into the SME sector and the main barriers / risks to be considered in collaborative innovation. The visit ended with a tour of the new AMRC Factory 2050, an iconic UK facility aiming to explore flexible manufacturing. A number of technologies were demonstrated including BAE Systems’ development technologies, linking the visit to the subsequent BAE Systems Samlesbury visit.

4.5. Visit to BAE Systems The visit to BAE Systems Ltd, MAI Samlesbury site, was extremely successful, not only on the day, but

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also regarding the future access that the group gained to the representatives of the company. Part of the BAE Systems visit was the innovation challenge. BAE Systems’ representatives, asked the cohort to reflect on the forthcoming months on the cultural change demonstrated in large organisations; how could smaller companies support the goal of increased flexibility and increase efficiency in such a large company? Continued engagement would be predominantly focused on the delegates’ potential awareness and involvement in the Training Academy and the proposed North West Advanced Manufacturing Research Centre (NW AMRC) at the Enterprise Zone Samlesbury. The NW AMRC would have particular relevance, as it is proposed that this facility is being designed and developed to encourage SME involvement and engagement in innovation across the manufacturing sector. As an interim measure the project points of contact for BAE Systems are currently based within the Manufacturing and Materials Engineering business, focused on the development and delivery of innovation, hence it would be beneficial to the SMEs if they continue to use these contacts as inroads into the wider BAE Systems business.

BAE Systems visit

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The following feedback was recorded:

4.6. Visit to Siemens

The visit to Siemens Industry Automation and Drive Technologies, Congleton was a very successful day. Participants got a lot of input from Siemens starting with M.D. Andrew Peters’ articulation of Siemens’ vision, mission and strategy. Alan Norbury, CTO, provided some insightful information about Industry 4.0 with the developments on Big Data, the Industrial Internet of Things and Robotics. The funding story from Carl German, Product Engineering Manager was very well received followed by a presentation describing LEAN from Siemens view and how they work with their supply chain. During the Siemens visit the focus was not on the shop floor but rather Siemens’ business strategy and a tour of the management and reporting infrastructure, as these elements are considered novel and quite innovative. The tour also included a glimpse into how technology can help manage change in a business in an innovative way, i.e. Virtual Reality for factory reconfiguration plus access to senior business and technology managers, which really engaged with the cohort. The overall theme of the day was ‘culture’. Siemens have a very mature culture and this helps the business achieve challenging targets and improves acceptance of new technology and methods of working. The comment below was given by a delegate through LinkedIn and summarised the successful day at Siemens Congleton:

‘A most informative day. It was illuminating to be given such access and information about the company, management, quality and manufacturing processes. I am amazed at the levels

of detail considered and how they are embedded into the company ethos at all levels…. Some great cutting edge design technology I had never seen before. Amazing. Many thanks

to all involved in making the day so open and informative.’

‘I thought it was very

informative, BAE Systems should be praised for “opening its doors” to visiting companies and

sharing their issues’

‘I am in awe at the

access granted to us by BAE Systems’

‘I really enjoyed the BAE visit; I thought the whole day from start to finish was a success. It was very informative and inspiring. [T]o be

given the level of access (…) and to see the way they work[] and how

BAE [is] building their products was outstanding’

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4.7. Masterclasses

The Masterclass series has been very well attended by the cohort and the delegates provided feedback on their preferred speaker. The speakers that were preferred were so because the owner managers following their talk could relate to the challenges, opportunities, threats, etc. to their own businesses, irrelevant of the size. They could also relate to where someone had then taken their business to. Many IME delegates also said that they would like to attend the masterclasses in the future since it is a good opportunity for them to meet after the programme has ended and exchange experiences and continue to identify opportunities to support business growth. Masterclass speakers included: Jonathan Warburton – During his time as Chairman of the family business, Jonathan has seen the company transition into a national brand. He has seen growth of over 60% to a turnover in excess of £500m

John Timpson – The Timpson family business was taken over in 1973, but 10 years later John Timpson led a £42m management buy-out. In 1987 he sold the shoe shops and concentrated on building the shoe repairing and key cutting business Michael Finnegan – Founder of i2i, a motivational speaker which helps businesses achieve objectives and maximise potential – Michael works with businesses, helping them to understand how to unleash the power lying dormant within their people One delegate’s comment was recorded as:

4.8. Graduation event

The graduation day featured a masterclass by Pete Goss MBE, a sailor and adventurer turned entrepreneur and author of the bestselling book “Close to the Wind”, who relates his experiences of courage and determination to business audiences. This followed a networking lunch, and was open to all of the 100 SMEs engaged in the IME network. Prior to the masterclass, the Lancaster University’s Deputy Vice Chancellor spoke about the importance of SME innovation for the economy and the significance of programmes like IME, and then presented certificates of attendance to the participants of the IME programme. It was very positive that all but one participant attended the final event, demonstrating the high level of engagement that was demonstrated by all the delegates throughout the programme.

‘Excellent. The quality of speakers has been impressive. Great that they are so open around how they achieved success. Very clever mix of topics – wouldn’t want to miss any as so

useful’

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IME graduation event, featuring programme delegate Lyn Pitt, DTG Engineering with Lancaster University’s Deputy Vice-Chancellor Professor Andrew Atherton.

5. Impact and Outcomes of IME Outcomes are likely to be realised 1-3 years post-project completion with impacts likely to be realised up to 5 years after the project. However, a number of ‘softer’ impacts and outcomes are already achieved as outlined below. The programme has been of great benefit for the majority of participants. The most important individual benefit was probably having formed a peer group of like-minded participants (both in owner-manager roles and other senior managerial roles) across the cohort. Especially through the action learning groups, delegates were able to share their experiences, problems and thoughts with each other in a trusting network which was of great benefit. Those who participated in the innovation exchange benefitted from the insights and feedback received observing the management, operations and culture within their IME partner organisations.

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Feedback gained from IME participants following the programme included the following:

5.1. Impact on innovation

After the programme IME participants have an improved absorptive capacity for innovation and are better placed to understand market opportunities, infrastructure, such as the AMRC in Sheffield and funding which supports innovation. IME delegates have a greater understanding of the value of open innovation and collaboration. Also the Intellectual Property workshop has led to greater awareness of commercialising innovative products. Some comments we received from participants showing that the IME programme had an impact on their innovation capability or potential absorptive capacity:

5.2. Impact on management and commercialisation

The second phase of enhancing absorptive capacity can be considered as its achievement or the transformation and exploitation of knowledge. To date we cannot fully analyse the findings on management and commercialisation. However, already we have received some feedback which suggests positive change. When delegates were asked about changes they could report from beginning of project the following responses were received:

‘Looking to reflect on my action in the longer term’

‘Checking that I am not micro-manging and am

delegating properly’

‘Need to develop a long term strategy’

‘Programme is helping me

clarify my thoughts and behaviours around

leadership and I am looking to embrace this change in

the future’

‘I feel I will be better prepared when I take on

new employees which will result in happy employees’

‘Looking at process improvement and

considering future product developments through

collaboration’

‘Starting to think about Industry 4.0’

‘I am moving more into digital technology’

‘I want to innovate the business in the future and

develop my own products in parallel with what we do

day to day’

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5.3. Productivity Agenda

Sir Charlie Mayfield (Chairman, John Lewis Partnership) has established a business-led action group to address the productivity challenge within the UK economy. The group will report to the Chancellor and the Secretary of State for Business. The Better Workplace Practices (BWP) strand of work, led by Nigel Whitehead (Group Managing Director of Programmes and Support, BAE Systems), explores how different models of employee engagement can contribute to raising productivity in the workplace, including using skills effectively. It focuses on aerospace and defence, but will draw lessons from and be applicable across all sectors. The output from this work will be practical and grounded, driving direct action to enhance productivity in different sectors and workplaces across the UK. Working with Airbus, Rolls Royce, TUC and other partners such as the North West Aerospace Alliance (NWAA), the BWP has sought to identify practical examples and actions that could be applied through the supply chain and in other sectors to build a wider community of practice to share learning and insights, build capability and improve performance on the ground. Drawing upon the knowledge developed delivering the IME programme, Lancaster University in collaboration with other organisations and working with the BWP group has developed a proposed programme which could help address this matter if appropriate funding can be identified to deliver this. Lancaster University has engaged with all the partners identified above and given them details of a productivity programme for SMEs, which has drawn upon the learning of IME in its development. Discussions have arisen around how the programme could be tailored to meet the needs of different industry sectors and regions across the UK. Discussions are also ongoing with BAE Systems Submarines at Barrow, regarding how Lancaster University might support the development of its supply chain. The work of the Productivity Leadership Group can be accessed via the following linkhttps://howgoodisyourbusinessreally.co.uk/leadership/ which includes a summary report which can be accessed through: https://howgoodisyourbusinessreally.co.uk/downloads/reports/how-good-is-your-business-really.pdf.

‘Still early, but the programme has encouraged

the development of alternative routes to market for us with the development

of much better platforms for on-line selling.’

‘I am now in a position where my business is

potentially scalable and before it was not.’

‘I am looking to try to find areas of growth’

‘Looking to expanding into new markets’

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5.4. Development of the North West AMRC To improve access for businesses in the North West of England, it is proposed that a NW-AMRC will be developed in a partnership led by Lancaster University and the University of Sheffield and in collaboration with key regional manufacturing businesses, sector representative bodies, the LEP, County Council and local universities. The location of the site will be adjacent to the BAE Systems Samlesbury site on the Enterprise Development Zone. The NW-AMRC is planned to test modern manufacturing processes and evaluate their levels of efficiency and suitability. Small batch manufacturing is planned to take place on the site and should be primarily used by SMEs. The NW-AMRC would mainly support SMEs to adopt best practice in manufacturing and technology utilisation, offering access to facilities to test prior to implementation in the factory. The business model for the NW-AMRC site will be significantly different from the existing AMRC in Sheffield as it will be focused on an SME audience. Learning from IME is supporting the development of a business case for this proposed investment.

5.5. Science and Innovation Audits These are designed to map out local research, innovation and infrastructure strengths across the UK, and are undertaken by universities, research and innovation organisations, businesses, and Local Enterprise Partnerships. The audits will help identify and build on the potential of every region across the country by making sure investment is properly targeted and uncovering opportunities for businesses to tap into.

Business Secretary Sajid Javid and Universities and Science Minister Jo Johnson selected five applications to pilot the audits including the Sheffield City Region and Lancashire. The Advanced Manufacturing Corridor (AM Corridor) was proposed by a consortium which represents key innovation partners in the Sheffield City Region and Lancashire Local Enterprise Partnerships (LEPs) and is led by the University of Sheffield and Lancaster University. The focus will be on the globally relevant science and technology areas that underpin advanced manufacturing now within the AM Corridor and as it evolves in the future. It will also look at new forms of higher education that can be rolled out to support the adoption of new technologies in both original equipment manufacturers and supply chain companies including new apprentice based approaches to higher education.

Professor Stephen Decent, Lancaster University’s Pro-Vice-Chancellor for Research, said: “Lancaster University is delighted to be in the first wave of the Science and Innovation Audits, in partnership with Lancashire LEP, BAE Systems, and the University of Sheffield, University of Central Lancashire, the Sheffield City Region and others. This puts Lancashire and Sheffield, in partnership, at the centre of the Northern Powerhouse. The Science and Innovation Audit will enable us to demonstrate the world-leading research in Lancaster University Management School and our Department of Engineering, in collaboration with the Advanced Manufacturing Research Centre in Sheffield, and to further develop the support of innovation and skills in the manufacturing small and medium sized manufacturing businesses supply chains in Northern England, which are vital for economic growth and jobs in the UK.” Ourlearning from IME will obviously help inform this exciting opportunity.

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5.6. UKCES Parliament Reports & Future Collaboration

Following the AMRC visit and participation in the IME programme, BAE Systems and Optima Control Solutions, one of the SME participants, are now investigating collaboration with the AMRC in Sheffield. After the IME AMRC visit, Optima’s MD Michael Hill returned for an in-depth overview of the centre. This has led to two parliament reports, one written by Optima Control Solutions and one by BAE Systems. These complimentary papers have now been published to support the UK Parliament’s Science and Technology Committee inquiry into Robotics and Artificial Intelligence.

Further details can be found via this link: http://www.parliament.uk/business/committees/committees-a-z/commons-select/science-and-technology-committee/inquiries/parliament-2015/robotics-and-artificial-intelligence-inquiry-15-16/publications/

6. BAE Systems’ objectives and collaboration between BAE Systems and Lancaster University

As part of BAE Systems’ future manufacturing strategy there are a number of activities underway, including the development of a Samlesbury Enterprise Zone, a training academy and a manufacturing research centre. These three initiatives reflect BAE Systems’ aspiration to work differently and engage other original equipment manufacturers and SMEs as well as research centres in open innovation. This approach requires BAE Systems to better understand SMEs and their innovation barriers or threats. Understanding how the training academy and research centre might benefit SMEs is key to the success of these ventures. Helping SMEs get more involved in manufacturing innovation would ultimately create a strong North West manufacturing sector and therefore a strong BAE Systems supply chain. In order to help BAE Systems’ understanding of SMEs, build stronger relationships with leading North West academia and to help inform the government and council SME strategy BAE Systems decided to lead the IME programme. BAE Systems faces significant challenges in the future, primarily associated with productivity and cost. These challenges need to be addressed in order for BAE Systems to operate in a competitive global market. Strong, innovative, cost effective supply chains are critical to BAE Systems addressing these challenges. BAE Systems aims to leverage the strength of research centres i.e. catapult centres, which are able to achieve significant steps in manufacturing capability when companies collaborative in an open manner. BAE Systems aims to pursue collaborative manufacturing R&D programmes in an open manner, and needs like-minded SMEs to participate. Open innovation of this type and the use of research centres to primarily drive manufacturing R&D is a cultural change for BAE Systems. Additionally the use of more advanced or automated manufacturing technology requires a cultural change in an industry that has historically been very reliant on craft based skills.

The IME project is considered a success by BAE Systems. Overall the cohort feedback was very positive with obvious collaboration between participants as well as a growing interest in the HVMC and innovation in general. This helps fuel interest in the North West for the proposed AMRC NW and hopefully drives an innovation agenda in the SME base. The project has helped BAE Systems understand the barriers and issues faced by SMEs. This goes toward informing our future SME engagement strategy. The project and its objectives were disseminated across the company, and a message from Dave Holmes

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(manufacturing director) was posted on the intranet at the start of the programme. The progression and success of the project has been visible at a very senior level within the business and as a result additional opportunities have been identified. BAE Systems and Lancaster University are now working to realise those opportunities, contributing further to the UK productivity challenge. BAE Systems aimed to provide the SME cohort with an insight into the needs of large organisations and encourage SMEs to innovate, work collaboratively and work with the HVMC. BAE Systems committed to the project and so identified resource early to ensure its success. The project was supported at a senior level within the company and so securing senior managers as speakers for the industrial visits was not an issue. This support came as a result of BAE Systems’ need to evolve its culture and manufacturing strategy. BAE Systems and Lancaster University’s relationship is much stronger after the IME programme. Opportunities for future collaboration have been derived as a result, and the programme has helped Lancaster University to understand the benefits and opportunities presented by collaborating with manufacturing research facilities and specifically the HVMC. This has further encouraged Lancaster University and BAE Systems to collaborate on the proposed NW AMRC. Future collaboration with BAE Systems includes a masterclass delivered by Nigel Whitehead (Group Managing Director of Programmes and Support, BAE Systems) at Lancaster University in October 2016. He will reflect on “Productivity in the advanced engineering and manufacturing sector and its contribution to the economy (with emphasis on North West)”. Additionally there is the planned programme on productivity referred to in the previous chapter.

7. Conclusions Lancaster University has developed a programme for SMEs in advanced engineering manufacturing, in partnership with an anchor organisation (BAE Systems) which is very unique and innovative. The objective of the IME programme was to deliver a programme to SMEs in the North West enhancing non-technical innovative capacity and boosting productivity. This form of collaboration has demonstrated success through a number of important outcomes which have been discussed. SMEs have a wider and more detailed understanding of new technology and know-how to draw on support from the University and wider community. The group have bonded extremely well following good attendance at all of the workshops which has contributed to the successful programme. The IME group also plans to continue to meet in the future to share their experience. From expertise developed through the delivery of IME, Lancaster University will continue to be a conduit, connecting SMEs with anchor organisations such as BAE Systems, Siemens and innovation infrastructure such as the AMRC or other catapults. It is an important part of the programme to ensure that we continue to engage with SMEs as part of their continued development and to ensure we facilitate the strong links that have been developed through the programme and site visits. We will offer the opportunity for the group to continue to meet at Lancaster University and organise other visits where appropriate to BAE, Siemens and the Catapult Centre. We will also inform the group of the HVMC developments and any future events or programmes at Lancaster University. The IME participants will be further invited to attend the masterclasses in the new academic year which continue to be sponsored by a large organisation, NatWest Bank, for the benefit of SMEs.

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Cumbria Crystal Case Study

Company Background Information Cumbria Crystal based in Ulverston, Cumbria is the last producer of hand-blown and hand-cut, full-lead, English crystal in the United Kingdom. Using only traditional methods their team of 22 artisans create crystal using techniques that have barely changed since the Roman era. Cumbria Crystal is used by many royal families and can be found in British embassies and luxury stores worldwide. Customers include Linley, the luxury design and homeware organisation founded by David Linley, the Queen’s nephew and Kevin Glancy also an exclusive luxury brand. It has been also showcased extensively in Downton Abbey, James Bond and many period dramas as it epitomizes luxury living. The business is owned by a philanthropic local entrepreneur who has demonstrated his commitment to keeping this business going over a number of years. The company was without a Managing Director for a period of 15 months, however in March 2015 a new Managing Director, Chris Blade, was appointed who brought with him specialist skills in the glass industry. Chris felt he had little support within the company which faced several key challenges, including improving productivity and developing a clearer marketing strategy. Chris Blade took part in the IME programme as he was looking at ways to increase the company’s efficiency and productivity through innovation. In order to increase efficiency, there is a need to improve production through streamlining the manufacturing cycle; reducing waste (sold as seconds at discounted prices) and building a bigger team of glass makers. There is also a need to develop a better marketing strategy to increase sales in existing markets as well as to enter new markets such as the Far East and US. About Chris’ experience with IME Chris enjoyed participating in the IME programme and overall benefitted from his participation. Prior to starting the programme, Chris was fairly new to his appointment as the Managing Director and he had relocated from Sunderland’s National Glass Centre to Ulverston, Cumbria. The programme helped him to build a network in the North West and to engage with Lancaster University. Chris found a workshop on operations and theory of constraints run by Dr John Mackness, an associate of the Management School, particularly useful. Following the workshop, John Mackness visited Cumbria Crystal and helped Chris to look at some of the issues challenging his business. Chris found the masterclasses were very engaging and inspiring, especially Mike Armstead, Chairman of Wax Lyrical, who had turned several businesses around. Chris commented that the overnight experiential was a great way to get to know the other delegates and provided a useful icebreaker. This helped to build trust between the delegates and to have successful action learning groups later in the programme. Chris enjoyed the action learning but he would have preferred to have been more involved in selecting the members of the group with whom he worked. It would have been beneficial to have had several more meetings within the action learning group but this was restricted as the programme was condensed to seven months from the originally proposed ten months. For Chris, it was difficult to understand how a business such as Cumbria Crystal could engage with the Catapult; he felt the content of the visit was targeted at bigger businesses. He suggested having more content on possible funding opportunities and supporting the development of funding applications. Although he had felt the BAE Systems visit was not very relevant to his business, he could apply parts of

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it to health and safety issues in his company which helped him to improve the standards associated with tracking this. As Chris found the IME programme overall very beneficial, he has subsequently decided to take part in the Cumbria Forum, which is a business support programme delivered by Lancaster University Management School and funded through the European Regional Development Fund (ERDF), as a part of the Cumbria Growth hub. The programme is a peer network and business growth programme designed specifically for growth orientated small and medium sized businesses in Cumbria, starting at the end of June 2016. The IME programme also opened his eyes to new ways to become more innovative and seek funding for innovation projects. Chris is currently exploring funding to develop a prototype, through Innovus in collaboration with a client. Innovus, a partnership between the National Nuclear Laboratory (NNL) and The University of Manchester, give grants to support the development of new creative products. Cumbria Crystal is aiming to develop a new technique for making high-end wine bottles. www.cumbriacrystal.com

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Fitzpatrick’s (UK) Ltd Case Study Company Background Information Fitzpatrick’s (UK) Ltd is a small advanced engineering manufacturing business with 25 employees that specialises in sheet metal fabrication and welding from purpose-built premises in East Lancashire, contributing to the North West manufacturing base. Work is undertaken to the highest professional standards (accredited to ISO 9001, Quality Management Systems standard) in stainless steel, mild steel and aluminium. The company pride themselves on work that is both quick and accurate, fulfilling the expectations of customers, leading to repeat business and new sales. Fitzpatrick’s (UK) Ltd is changing part of their manufacturing and operations process from a one-off prototype environment to longer production runs for clients. Mark Fitzpatrick, the owner and Managing Director of the business started his business in 1996 and first employed staff in 2002. Turnover has constantly grown over the years (turnover for financial year 2015/2016: ~ £1.8m). Customers include the Natural History Museum in London, Topshop and as well as a number of other retail organisations. About Mark’s experience with IME Mark Fitzpatrick took part in the IME programme because he was looking for ways to innovate and diversify his business. Fitzpatrick’s (UK) is dependent on producing prototype units for retail businesses on the high street. As retail sales move to online purchasing, Mark is aware that this market is diminishing and therefore he needs to diversify both his customer and product base. A large part of the business is devoted to producing steel fabrications to help lay international pipelines across land and sea. This was until recently very lucrative but with the fall in the price of oil recently many projects have been mothballed. Mark has enjoyed and appreciated participating in the programme. He found particularly beneficial the industrial visits and the opportunity to connect with BAE Systems, and was pleasantly surprised to take away knowledge that he could apply back within his organisation, having assumed prior to the visit that he would not be able to learn from such a large organisation. He also hosted an engineering student project, whilst being on the programme, who worked upon the development of a batch-laser engraving system. Mark was very happy about the work of the university and the engineering students and said “They have done a very professional job.” Getting the opportunity to engage with students who acquire the latest engineering skills and technology during their studies, accompanied by an engineering supervisor of Lancaster University was of great use for his business. It was very beneficial for Mark and his staff to see students using the state-of-the-art skills in engineering. In terms of how the programme could be improved Mark made the following suggestions; he felt the programme was too short to deliver all the content. Mark enjoyed being a part of a peer network but he felt it would have been more beneficial to be only with owner-managers as decision making is different depending on the participant’s role in the business.1 Prior to starting IME, he thought the programme would be more focused on innovation but felt that the onus was actually more upon leadership, which although of interest did not map with his expectations of the programme. He also felt there was too much emphasis upon reflection and not enough time spent developing future action plans around

1 Of the 19 participants 7 are owners of the company. The other participants are either in the role of the Managing Director or in another managerial role.

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innovation. He would have preferred to have more focus on the discussion of possible innovative products.

Mark Fitzpatrick commented on the programme that “I am more now than before and overall I am glad I participated in the programme.” Prior to taking part in the programme Mark did not feel very confident about the structure and organisation of his business. The course empowered him and made him aware how well managed and successful his business actually is. He also made a lot of new contacts through the programme and got some new business from other IME participants. Mark is now keen on further developing his business structure and is trying to identify key performance indicators (KPIs) which correctly measure the value any change makes. He wants his business to be ready for a changing environment, through diversification. Mark is also interested in hosting a further student project with Lancaster University in the near future. He would like to improve his marketing activities as so far his business lacks a formal marketing strategy and he hopes Lancaster University can help him with this, through a student project.

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Playdale Playground Ltd Case Study

Company Background Information Playdale Playgrounds Ltd was established in 1978 however the original family business dates back to 1735. Prior to manufacturing playground equipment, it was a woodmonger and timber merchant business. Playdale is a family business with four directors; two from the family. The head office is in Cumbria, near Ulverston with two other sites in the area. The company has about 130 employees. The key customers are local authorities, schools, leisure facilities and local community groups. The market is very competitive with around 60 other playground manufacturers in the UK. Margins are relatively low. When the government started to cut public spending in 2008, Playdale decided to export its playgrounds to other countries. Around 15% of the Playdale’s turnover comprises export to 24 countries with relatively strong markets in Korea, the UAE, Australia and Singapore. The annual growth rate for the export market is 50% while the growth rate for the UK market is only 1-2%.

Paul Mallinson, Technical and Operations Director, started to work for Playdale in 1991. He has worked as a Director for 12 years. Paul decided to take part in the Innovation in Manufacturing and Engineering (IME) Programme as he would like the business to be more efficient through being more innovative.

Paul’s IME experience Paul has enjoyed and appreciated participating in the programme and has been a committed and open-minded delegate. Paul thought the amount of content, delivered in the seven-month programme, was excellent. He sometimes found it challenging to fit the IME programme into his work calendar; however, he thought it needed to be relatively time-consuming to be successful. Paul commented that the masterclasses were “absolutely brilliant and very inspiring. To get the chance to listen to many different, very successful business people is both very interesting and inspiring.” Ideas he got out of the masterclasses will help him in the future to be more innovative and a better leader. He thought the Siemens- and BAE-Systems visits were ‘excellent’ and he was impressed that the Managing Director of the Siemens, Congleton Plant spent several hours speaking with the 18 SME delegates on the IME programme. He also found the tour of the production facilities very informative. He observed that large companies face similar problems to SMEs. Paul felt the Catapult visit was a bit disappointing as most of the delivery was classroom based, when he would have liked to interact with the ‘tremendous’ facilities. He appreciated the tour of the Factory 2050, but would also have liked to see the 3D-printing facilities. Paul and his selected partner were very committed to the shadowing exchange. During the exchange pairs of IME participants went into their partner’s organisation and carried out a series of mini projects. Paul valued the “free consultation” and the “different set of eyes” which he gained through the exchange. Paul and his exchange partner also produced a SWOT analysis on their businesses. Overall Paul thought the exchange was very successful and gave him a different point of view which will help him with Playdales’ business in the future. He felt one of the main advantages of the IME programme was the peer network which he gained through the programme. He felt that the environment was very supportive. For instance, during the programme one of the participants visited his company to speak to Playdales’ marketing manager to help to improve his marketing.

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Paul summarised that he thought innovation is a difficult topic to grasp but the course managed to point people in the right direction and to be more innovative in their business.

In terms of how the programme could be improved he suggested having a firm schedule in place at the beginning of the programme, which did not change, is very important, as it is very difficult to accommodate changes in a very busy job. Another weakness, according to Paul was that some of the participants were sent on the programme and may not have been ideal delegates for the programme. In future, he felt it would be better to only invite owner managers or other key decision makers in a business as participants input is highly dependent on their level of responsibility within the company. As a result of the programme, Playdale is currently trying to change processes to utilise technology wherever it is possible. This includes manufacturing, business or IT processes. The programme highlighted the importance of change and taught him how this might be achieved. To summarise Paul concluded that the programme was “Tremendous value” and a big time commitment but he advised “I felt I got back what I put in”.

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