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Home is where the manufacturing heart is

MANUFACTURING: Special Report

Steven Barr, Head of the Manufacturing AdvisoryService (MAS), reflects on why smallermanufacturers are looking closer to home

Home definitely appears to be where the heart is forEnglands army of smaller manufacturers.

The domestic economy appears to have kicked back intolife, with British GDP outperforming the entire group of G7nations for the second quarter of 2014.

This growth is being fuelled, in part, bymassive investment in automotive andoffshore wind and a surge of high-profileinfrastructure projects about to kick-off.High Speed 2 and the new nuclear reactorat Hinkley Point immediately spring tomind.

A stagnant Eurozone and global conflictsthrowing up market uncertainly are makingexport more difficult and creating an inertiain trading that is leaning back towards theUK.

Our latest Manufacturing Advisory ServiceBarometer offers the clearest evidence yetof how these trends are impacting on thethinking of SME manufacturers, nowreferred to as the driving force of ourindustrial base.

Of the 900+ respondents, more than two-thirds (67%) said they consideredincreasing domestic sales to be importantto their long-term expansion plans,compared to just 36% who felt internationalexpansion was an important main driver offuture growth.

Now this does not mean companies arechoosing not to export; in fact, 20% morefirms will be exporting in 2018 than arecurrently doing so today. We havenumerous examples of SMEs increasingmarket share in the EU, the Far East andeven international powerhouses like theUnited States.

What it does suggest is that our companiesbelieve there is more potential domesticallythan overseas at present and for theforeseeable future.

MANUFACTURING: Special Report

The 67% statistic in itself is notsurprising, as homegrown saleswill naturally make up the majorityof the turnover for most SMEmanufacturers.

However, dig beneath the figuresand the picture that emerges isthat increasingly production isbeing reshored back into the UKand creating a lot moreopportunities here. The biggestchallenge facing our firms ismaking sure they are in a positionto take advantage.

This is where MAS comes in.Working with UK Trade &Investment (UKTI), we aredelivering ReshoreUK, adedicated one stop shop to bringwork home and build capacity inthe supply chain.Our role falls firmly with thesuppliers. We have dedicatedManufacturing Advisors workingwith firms from every sectorimaginable on developingstrategies that will allow them tobid and deliver the work.

This is often simply a case ofgetting the management team totake a step back from day-to-dayactivities and giving them time tolook at theirstrengths/weaknesses, the

market opportunity and what itwill take to get there.

Interestingly, the MAS Barometerrevealed that 61% of SMEs feelthat strategy is a major strength,with the quality of their leadershipteams being its biggestadvantage.

This would not have been thecase five years ago and showsthe steps many manufacturershave taken to get away from dailyfirefighting to putting theplatforms in place for sustainedgrowth.

However its not plain sailing andthere are still plenty of challengesahead of English manufacturers.

Unsurprisingly, access to skillscame out as the biggest threat tolong-term growth, with 71% ofcompanies reporting issuesaround being able to recruit theright people or losing valuableskills as older workers retire.

This has been building for morethan two decades and a lot of theproblems are coming home toroost now our businesses arelooking to boost staff numbers tomeet increases in customerdemand.

And this demand for newemployees shows no sign ofslowing down. A record 55% ofcompanies are planning to hire inthe next six months and, lookinginto the future, firms feel thatthere will be a 32% collective risein the number of peopleemployed in industry by 2018.

This naturally is great news, buthow we manage the issue withthe opportunity will be crucial.There is no simple answer either.

It requires MAS and otherbusiness support providers likeGrowthAccelerator, SEMTA, thedifferent industry skills agenciesand education at all levels towork together to up-skill, developmore apprentices and inspireyoung children about a career inmanufacturing.

The MAS Barometer has beenanother shot in the arm for thesmaller manufacturer andoptimism, both in the short andlong-term, appears to be thecommon theme.

What it has told us is that whilstexports still offer potential, it isvery much closer to home wherethey see real growth lying.

For further information see www.mymas.org.Telephone: 0845 658 9600, Twitter: @mas_works

MANUFACTURING: Special Report Case StudiesHere we take a look at two British manufacturers aiming for expansion in 2015

Muller signs up to MAN and signals sales aimMuller Holdings Ltd, one of theUKs leading precisionmachinists, has recognised thepower of collaboration bybecoming the latest firm to jointhe Midlands Assembly Network(MAN).

Muller, which provides CNCmilling, turning, multi-spindle andconventional escomatic capacity,is looking to tap into the groupsglobal reputation and tenderingpower to smash the 15m salesbarrier for the first time in its

history.

The management team believesworking in partnership with nineother like-minded manufacturerswill give it the capability to quotefor larger, more complexassemblies and increase itsmarket share in new and existingmarkets.

They are also expecting tosecure other softer benefits bysharing best practice on skills,business planning and

manufacturing systems, not tomention splitting exhibition andmarketing costs.

Its 21 years since weperformed the MBO and the righttime to look at moving thecompany forward again,explained Paul Bethell, ManagingDirector at Muller Holdings Ltd.

Weve been growing steadilythrough a combination ofinvestment in new machinery,getting the right people in place

and looking at new opportunities. For example,we are now producing products for the gasand medical sectors, making up nearly 2m ofturnover in the last year alone.

He continued: Id seen what MAN has beenachieving and wanted to be part of a collectivethat not only promotes the regionsmanufacturing strengths, but actually works onsafeguarding contracts and bringing new workback home.

Muller Holdings, which first moved toShropshire in 1941 to avoid wartime bombingraids, currently employs 150 people andannual sales stand at 14m.

It operates from four sites in CleoburyMortimer, Wednesbury, Redditch and SouthWales, whilst also running a successful jointventure with Preciturn in India for over adecade.

MANUFACTURING: Special Report Case Studies

MANUFACTURING: Special Report Case Studies

Steel firm tackles growth plans after 15m deal

An engineering company owned by a formerEngland rugby player is projecting further growthafter securing a game-changing contract withNetwork Rail.

Loughborough-based Adey Steel is creating up to20 jobs after securing a 15 million deal to supplyfabricated overhead line electrification structuresfor the Great Western Electrification programme(GWEp). The programme will see a 150-milestretch of the track modernised to make trainsquieter, more efficient and greener as they runbetween London and Cardiff.

The family business, which is led by formerLeicester Tigers forward Garry Adey as itsExecutive Chairman, has ambitions for continuedgrowth as a result of securing the deal and willcontinue to work closely with the ManufacturingAdvisory Service (MAS) to help deliver its long-term strategy.

Robert Hall, HR, Safety and Quality Director atAdey Steel, said the opportunity to work withNetwork Rail on such large infrastructure projectsasGWEp is hugely exciting to the business andprovides the grounding for growth after a

MANUFACTURING: Special Report Case Studies

challenging five years within the constructionindustry.

Weve managed to maintain a stable businessin recent years, but our growth plans have beenreviewed as a result of the Network Rail contractand controlled expansion is now very much onthe agenda.

Being awarded the contract has allowed us toset longer term plans as it provides a baseline ofwork for the next four years and firmlyestablishes us in the rail sector, which is an areaof the construction industry with promising levelsof sustained investment.

MANUFACTURING: Special Report Case Studies

Powervamp 'Big Win' With London City Airport

Powervamp, has supplied tenmobile electrical ground power(MEGP) units to London CityAirport, as a replacement for theirmobile diesel units used to powerall aircraft in what represents aUK manufacturing first.Powervamp Ltd, based in Lutonand employing forty people, is aworld-leading designer andmanufacturer of specialisedequipment for powering all typesof aircraft and vehicles.London City Airport made thedecision to switch to mobileelectric power as part of its planto reduce Co2 emissions. Withaircraft parking and maneuveringspace extremely tight the fixedinstallation of ground power unitswas not possible. The batterypowered Powervamp GPU cartscan be moved in to place quicklyby one person as soon as the

aircraft has parked.It is estimated that Powervampsgreen electric GPUs willeliminate 2,000 tonnes of Co2annually and produce fuel savingsexceeding of 200,000 perannum.According to Director KenWalker, the deal represents amajor achievement formanufacturing in the UK. Wescore over the major multi-national companies that havetended to dominate the groundpower industry because we canrespond quickly to a customersunique requirements using ourteam of exceptionally talentedgraduate engineers.It is our ability to make decisionsquickly and work closely with theclient, backed by our engineeringand service support capacity, thatgave the customer the confidence

in the Powervamp product andcompany.Powervamp already supply itsproducts to more than 60countries and with new productsbeing continuously developed andlaunched see a growing worldmarket for its products andservices.Co-director and companyFounder Richard Roller said:Airports and Airlines are underever greater commercial andenvironmental pressures. Both areembracing electric power notdiesel as the way forward.Clean and green products arethe future and Powervamp arerecognised as the specialist in thisfield. Our products cut pollutionbut simultaneously cut operatingcosts too.