Redesigning Manufacturing

Reimagining the Business of Making in the UK

M. Beverland, B. Nielsen, V. Pryce, Kenneth A. Loparo, Ellen Hellmann

• Publisher: Palgrave Macmillan
• Year: 2015
• Print ISBN:
  9781137465214
• eBook ISBN:
  9781137465221
• Topic: Business
• Subtopic: Business General
• Index: Business

Manufacturing in the UK has an image problem. Although this image problem is more fiction than fact, it nonetheless has an impact on the sector's ability to attract staff, capital, and policy interest. This book redresses this situation by focusing on the real successes of the sector and the strategies used by makers to achieve sustainable results.

1

Introduction

A modern manufacturing morality tale

By all accounts the 2012 London Olympics were a triumph. As well as heroic sporting performances, fantastic organization and wonderful opening and closing ceremonies, the Games were also a triumph for the British creative sector (broadly construed), including architecture, arts, business and design. The design of the Olympic torch was a high-profile example of what Britain’s creative sector could do. Edward Barber and Jay Osgerby’s triangular design drew inspiration from three trinities – the Olympic motto “Faster, Higher, Stronger”, the fact that the 2012 Games were the third to be held in London, and the vision for London 2012 which was to unite sport, education and culture. The torch (made from gold PVD-finished aluminium) involved an innovative design balancing weight, an easily viewed fuller flame and, of course for safety, dissipation of the flame away from the handle. The design included 8,000 holes to represent the same number of runners and the miles run in the Olympic torch relay. Such was its success that the torch was listed among the Design Museum’s 2012 designs of the year and Barber and Osgerby each received an Order of the British Empire for services to design.

The triumph of genius designers is a common twenty-first-century story and one that owes much to heroes such as Jonny Ive at Apple, Chris Bangle at BMW, the success of Dyson, as well as a cast of hundreds of architects, fashion designers, creatives and commercial artists. However, this official account of the torch is incomplete – who and what is left out reflects the modern-day image of another economic sector, manufacturing.

Although the genius of the Olympic torch is attributed to designers who in essence broke the rules of physics – a problem resolved by the engineers in determining how to deal with the displacement of mass as a shape collapses from a wider cone into a narrower tube – the transformation of this inspiring concept into a real product required some significant engineering, metal craft and making skills. A quick Internet search on the London Olympic torch fails to uncover this part of the story, and it appears nowhere in that bastion of historical fact, Wikipedia. Without the skilled West Midlands team bringing together Premier Group in Coventry, producing the body of the torch, Black Country foundry Alucast Ltd producing the top and bottom caps, and Bullfinch (Gas Equipment) Ltd in Birmingham who produced the LPG burners, Barber and Osgerby’s design would have remained little more than an interesting concept.

Although the design concept is ingenious, bringing it to life in many ways was an engineering nightmare. The process involved a skilled team of including designers, engineers, machine operators, quality controllers, casters, craftspeople and metal finishers. In fact, so complex was this design that reverse engineering proved impossible as the scanners were unable to form a point cloud as a result of the 8000 holes on the prototype. Premier Group’s making solution came down to experience and understanding of metals, drawing on artisan and craft skills to manipulate the metal, machine out the 8000 perforations, generate press tools, forming the shape through trial and error to reach the stage where they were able to weld it together with a laser, drawing on an aluminium alloy to create the lightest torch ever made at 1kg.

Delivering the torch also involved supply chain management, financial and quality control expertise in order to ensure the torch was delivered on time and within budget, and at a standard acceptable to the Olympic Organising Committee. The project drew on traditional craft and metal-cutting skills as well as a range of more modern business capabilities including flexibility, quick prototyping and problem solving. While the design studio leveraged this project to achieve further success, and Alucast was recognized as Made in the Midlands Manufacturer of the Year in 2012, the companies that together made arguably the most striking and globally recognizable design of the 2012 Games a reality were not fully recognized for their extraordinary creative making capabilities.

In contrast with the inspirational designers, the Midlands manufacturing team did not win OBEs, various magazine design awards or institutional legitimacy courtesy of London’s Design Museum. These contrasting fortunes reflect the different popularly held images of the two sectors – Britain’s once glorious manufacturing sector fading quickly into irrelevance while the present (and presumably the future) belong to creatives solving intractable problems through design thinking. Despite the tone of the previous paragraphs, this book is not an attack on design (which we view as essential to manufacturing and value creation). Rather, we want to attack the popular image of manufacturing as dead, dying, a sunset sector, in perpetual decline, part of this country’s glorious industrial past, or something of little relevance to a post-industrial economy built around services, biotechnology, information technology and the creative sector.

Reimaging manufacturing

Although the negative image of manufacturing is a far cry from the reality of the sector’s success, nevertheless image matters. A sector’s image affects its ability to attract employees (not to mention the very best talent this country has to offer), capital, policy support, media interest, encourage universities to develop specialist programmes to support the sector and so on. American manufacturing researchers have identified how an “industrial commons” is essential to sustained sector success (Pisano and Shih 2012). However, as firms locate production and even more proprietary capabilities such as design, marketing, and research and development offshore, the industrial commons declines. This decline is exacerbated by the fact that the sector struggles to attract the best minds, not just those from STEM (science, technology, engineering and maths) subjects but also from business, design, creative arts, social sciences and the humanities (which as we will make clear are just as, if not more, crucial than their STEM counterparts).

The image of manufacturing may not reflect reality, but it certainly has real world effects. For this reason, we argue manufacturing needs to be rebranded. In this book we examine the reality of modern UK manufacturing. We look behind the statistics, we interrogate the assumptions underpinning many policy analyses and initiatives, and with reference to a broad range of exemplar cases, identify how UK manufacturing competes globally and draw on these strategies to identify policy options as well as opportunities for other stakeholders including universities and training organizations. Our aim is to not only to give the sector an image makeover, but also to reframe some of the debates around manufacturing. We believe economists, operations management and STEM researchers have driven much of the historic debate regarding the future of manufacturing. Although important, disciplinary experts bring with them a set of assumptions and tools that constrain as much as they explain complex subject matter (we hope our multi-disciplinary team avoids at least some of this). As well, many of the value-creation activities behind the UK’s manufacturing success stories such as design, creativity, craft and, critically, branding are left out of this debate.

In highlighting the practices, strategies and frustrations of the UK’s manufacturing stars, we draw heavily from examples from the broader Midlands area. First, one of the co- authors, Beverley Nielsen, is intimately acquainted with this area, having spent many years working for AGA Rangemaster and more recently as the “making” champion for Birmingham City University, launching the university’s “think and do” tank Idea Birmingham as a collaboration with brand-led Midlands’ manufacturers and hosting among other things industry events such as Birmingham Made Me Design Expos (2012, 2013 and 2104), showcasing the Midlands excellence in innovation, design and production. Second, the Midlands represents a significant amount of the UK’s manufacturing base and output from this region has steadily increased (Moffat 2013). Although we scarcely touch on important sectors such as aerospace and even pharmaceuticals, these have already been well covered by other authors who have highlighted the success of these sectors over the years.

We were lucky to have so many companies willing to talk to us. We conducted 30 reviews of manufacturers and other leaders in skills and economic development for this book. The results were a real insight into the actual and specific – and in many cases urgent – needs of manufacturers. It was clear that all the manufacturers spoken with are looking for creative and STEM skills combined – whether they are larger businesses like JLR, Rolls-Royce and GKN, or the amazing start-ups, or the considerable number of middle-sized businesses forming the core of our manufacturing heartland.

For these businesses design and innovation form the bridge between, as Will Hutton put it, “the consumer questing for the experiential and the business trying to provide that”. Because we need to remember that consumers these days are not buying because they need products but, as Ian Callum has said, “because they like them”. And it’s probably a bit more than like – it’s that people want products that they think say something about who they are, that are imbued with personal meaning (Beverland and Farrelly 2010).

What was also clear is that the business community is looking for people who are very specialist in terms of science and technological capability but are also highly “creative”. They want “thinking doers” which means that for educators the old divide between academic and vocational is not so relevant any longer to their competitiveness.

Now we have an industrial strategy, after some years of lobbying by the Confedereation of British Industry (CBI) and Trades Union Congress (TUC) and others, and this is seen as a “good thing” by business. But it is relentlessly STEM focused. There is one mention of design – indeed within automotive the UK’s excellence in car design is mentioned. However, what is immediately evident is that there is no further view on how to develop more of the design talent that has led to new product introductions enabling new market share acquisition – at home and abroad.

Our survey made it clear that what businesses want is to see the scope of the industrial strategy extended beyond the 11 sectors identified. In fact, business wants all manufacturing to be valued by policy-makers and supported, whether they be low tech or high tech, if they are delivering high-value returns. They believe that this recognition is lacking even though in their view our manufacturing base is now highly productive and competitive, indeed more so in the Midlands than in Germany, France and even in parts of China – showing that the sector can indeed “do it”. It is not just what they think – interestingly the case studies assessed in preparation for this book suggest companies as diverse as Amtico and Acme Whistles are adopting strategies enabling them to compete directly against the Chinese in lower priced or lower value added market segments. Companies are facing many new trends and challenges in globalized markets. New technologies including digitization are enabling rapid product development and growing consumer expectations have fuelled demand for new product introductions which have rapidly accelerated over the past decade. For example, 50 per cent of AGA Rangemaster’s revenues in 2014 were composed of products not introduced before 2011. New products introduced by Jaguar Land Rover have opened up new overseas markets with the Evoque in particular being responsible for great growth in China as sales there have grown from 431 vehicles in 2003 to over 77,000 cars in 2013. The small specialist education chair producer Hille have seen sales and profits grow over the past six years through highly targeted new product launches each year.

The new reality is that increased connectivity demands a combination of “hard and soft” skills in response to increasing complexity around, for example, the development of user-focused haptics involving the development of attractive interface options for consumers, especially in the higher value added consumer markets. Consumers themselves expect products that they are able to customize increasingly to meet the requirements of their own lifestyles, whilst also enabling them to make public statements about who they think they are and how they see themselves within society – not just in higher price brackets but from very competitive price points.

At the same time new challenges are arising that require a different approach to meeting them. The focus on developing low carbon sources of energy and products that have lower energy consumption is becoming even more pressing, along with the search for lightweight materials. With a greater proportion of the world’s population living in cities, urbanization is a trend businesses are grappling with, whilst the internet has brought challenges around the fragmentation of retail routes to market and the ability to micro specialize and compete in increasingly focused market segments.

This requires also a rethink of funding of academia – arguably it would suggest an urgent need for a shift away from traditional basic research-focused universities to more applied research. Mike Wright’s 2014 report shows that less than one fifth of all research funding is on applied research and this primarily through tax credits and patent assistance. And within academia fragmentation is creating a lack of transparency and ease of access with the result that industry is unaware of pockets of specialism they could access, thus constraining collaboration and investment.

What our survey demonstrates, as the case studies spread across this book testify, is that businesses overwhelmingly believe that greater collaboration lies at the heart of the future proofed economy. Centres of excellence within universities making clearer to business the degree of technology readiness of research developments and a greater focus on impact measures in assessing applied research would be beneficial in incentivizing a greater market focus for academics. The gains for the economy cannot be underestimated.

What this book is not

We also feel the need to identify what we are not trying to achieve. First, in promoting manufacturing we do not wish to be seen as being against other sectors. We are not arguing for a move away from services, denigrating the UK’s global expertise in advertising and marketing, design, primary or creative industries, or all the other sectors that contribute to a vibrant post-industrial economy. Services, in particular, are crucial to the UK economy in terms of value and relative employment. Services are critical to manufacturing export success, both in terms of their inputs and also the recent move towards “servitization” where much of the value of goods sold overseas includes significant services components. Manufacturers are also significant purchasers of services, and if this analysis has taught us anything, it is the interconnection between sectors that is vital to understand.

Neither are we attempting to turn back the clock on globalization and naively argue for a return to the past where the UK was the world’s manufacturing powerhouse. Much of the “decline” of manufacturing reflects a relative shift away from this sector to others. Manufacturing output and value in many economies worried about manufacturing decline is actually higher than it was 40 years ago; it is just the relative shares of output, value and employment that have changed. Not surprisingly, manufacturing in the UK has declined faster relative to other countries partially because as the first nation to go through an industrial revolution we started from a higher base. Therefore we are not arguing for some form of protectionist industrial policy.

As a result of these disclaimers we are not arguing for “rebalancing” in the purest sense whereby jobs will flow from services to manufacturing, and off-shored plants will be re-shored (although we recognize that for a variety of reasons some shift in the latter is already occurring). That is, we are not arguing for reindustrialization. While we want to ensure that manufacturing in this country remains viable, replacing existing employees (many of whom are near retirement age) and/or just meeting the sector’s requirement of 800,000 new employees by 2020 is a big enough challenge. We are more interested in ensuring that the wider contribution of manufacturing to the rest of the economy is well understood and appreciated and that as a result policies and attitudes towards the sector ensure its long-term sustainability.

We are not alone in thinking that. Peter Marsh in his 2013 book The New Industrial Revolution argues that a resurgent manufacturing sector can help sustain a lasting UK recovery and that there are increasing signs that a cadre of strong and globally focused production businesses based in Britain can prosper for a prolonged period with the right strategies at the level of business and also of government. We are not seeking large-scale shifts back to making, simply because much of the UK’s manufacturing success (and that in developed economies) is due to increases in productivity, primarily through the replacement of labour with machines and the greater use of digital technology (thereby further increasing worker productivity) (Rowthorn and Coutts 2013b).

What we are seeking is greater understanding that a focus on narrow manufacturing alone – even a sectoral focus alone – often ignores the importance of the surrounding ecosystem to sustain it. And we argue that the ecosystem itself, properly defined and observed, forms a very substantial part of what makes manufacturing and the economy succeed, that it has spill-overs both ways – from and back to manufacturing – and creates world-class “industries” in its own right which are exportable and highly productive. Ignoring this is a sure way of ensuring that manufacturing is unable to compete internationally and will slowly wither further with negative impacts on growth, skills and ultimately prosperity.

Redesigning manufacturing

This book is split into nine chapters. Chapter 2 will explore the manufacturing image problem in detail. Various politicians, relevant ministers, industry insiders and experts have identified that manufacturing’s crisis is more myth than reality. That said, image matters, and negative images are particularly hard to shift given the media (and our) predilection for dwelling on the negative r...

Table of contents

• Cover
• Title
• 1  Introduction
• 2  Why Manufacturing Needs an Image Makeover
• 3  The Future of Manufacturing Debate
• 4  How UK Manufacturers Create Value
• 5  Branded Businesses
• 6  Innovation Pathways
• 7  Manufacturings Business Model
• 8  Ecosystems: Supporting Manufacturing Success
• 9  Conclusion and Implications
• References
• Index