MAS WORKS Advanced Manufacturing & Supply Chain Opportunities

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1 MAS WORKS Advanced Manufacturing & Supply Chain Opportunities TVU Automotive Industry Supply Chain Event, Nifco 21st November 2012

2 PRESENTERS RACHEL EADE - Supply Chain Specialist JIM BARR & ALAN WHITTAKER Manufacturing Advisors

3 AGENDA MAS Overview Advanced Manufacturing Automotive Sector and Opportunities Rail, Aerospace & Defence and Nuclear Sector Opportunities Other Supply Chains SME Requirements and Support

4 MAS SUPPORTS ENGLAND FROM JANUARY 1 st 2012 A National service to all manufacturing businesses in England Single common delivery model Delivering strategic and technical support to SMEs Driving business growth. Developing advanced manufacturing capabilities.

5 MAS SUPPORTS ENGLAND Image area WMMC (West Midlands Manufacturing Consortium) PERA (Production Engineering Research Association) SWMAS (South West Manufacturing Advisory Service Grant Thornton

6 MANUFACTURING ADVISORY SERVICE (MAS) If you buy products & put them together... you re a manufacturer If you make any kind of physical product... you re a manufacturer We work with all companies who make any kind of product Printers, Bakers, Furniture Makers!

7 PLANNING YOUR BUSINESS MAS can help you take a business-wide strategic view of your company We ll guide you in creating clear business and product strategies that are built on a sound understanding of your current situation and future opportunities. MAS support is essential in helping our business to implement our growth strategy. Richard Crocker, Managing Director, Lantoom Slate and Granite Stone Quarry

8 DEVELOPING YOUR NEW IDEAS To succeed in today s global market you need to be constantly thinking, how can we do things differently? How can we do things better? MAS will help you generate and realise new ideas, identify new market opportunities, consider new materials, products and processes and develop new business models. If you have an idea about something you want to improve in your business, speak to MAS first. Paul Waldron, Managing Director, EDM Precision Technologies Ltd

9 IMPROVING YOUR PROCESSES MAS works with you to identify the obstacles that are limiting the performance of your business. We have the tools to reduce your waste and transform your efficiency and profitability. This is often referred to as lean manufacturing. MAS offers long term practical help which makes a real and measurable difference. Guy Atkins, Managing Director, Jo Bird & Co Ltd Manufacturers of specialist storage cabinets

10 GROWING YOUR SUPPLY CHAIN In response to competitive pressures, major manufacturers are buying an increasing quantity of goods from external suppliers If you are a small or medium sized, growing manufacturer, MAS can help you maximise this opportunity Our advisors have extensive experience in this area They will look at Supply Chains from your company s perspective and ensure that you maximise the potential and avoid the pitfalls. With the help of MAS, we attained SC21 and are in a better position to win new contracts, not to mention being in a much better position to effectively introduce new products and technologies. Mark Robinson, Quality Manager Thermacore Europe Ltd

11 HOW MAS WILL ENGAGE WITH YOU Your MAS Advisor will: Contact you for an initial discussion and if appropriate arrange to visit your manufacturing business Undertake a short business review, during the visit, and talk through identified improvement areas Identify the priorities with you, quantifying and qualifying the anticipated outcomes and benefits Signpost relevant sources of support and expertise If required, support you in identifying and selecting a consultant, trainer or supplier. Support you with easy to complete, grant application paperwork - if required Measure the benefits to your business when the project is completed

12 PROJECT CRITERIA Those demonstrating a good fit with at least one overarching objective: Driving business growth Developing advanced manufacturing capabilities Creating high value jobs Improvement of resource efficiency

13 ELIGIBLE PROJECTS Developing a medium to long term strategy for growth Developing and/or introducing new products/processes Reducing operational costs Application of lean principles (especially beyond the shop floor) Introduction of advanced manufacturing techniques. Servitisation In-house, bespoke training courses with no qualification/accreditation attached

14 NON ELIGIBLE PROJECTS MAS CANNOT OFFER FUNDING SUPPORT FOR Sales lead generation, Identifying selling agents (UK and overseas) Generation of marketing and selling materials Advertising, PR, Marketing Materials, Logos & Branding, Brand Management Intellectual property fees Anything related to websites or social media Open training courses, NVQ courses Anything that is a statutory requirement Preparing annual accounts, Tax and VAT consultancy Capital Equipment or material procurement

15 OTHER MAS SUPPORT Free Helpdesk and Research Service Free on-site Manufacturing Review Events, including Training, Best Practice and other network events Signposting and referrals Identifying potential suppliers and customers

16 ADVANCED MANUFACTURING Advanced manufacturing describes business which use a high level of design or scientific skills to produce technologically complex products and processes. The global transition to low and ultra-low carbon technologies and fuels provides the UK supply chain with new opportunities UK advanced manufacturing sectors include aerospace, automotive and chemicals. But we also target newer growth areas where the UK is well placed to take a global lead, such as energy renewables and other low carbon sectors.

17 WHY IS ADVANCED MANUFACTURING IMPORTANT? In the two years since the recession ended, the sector has accounted for a fifth of economic growth. Are more export intensive than companies in other sectors, with nearly 50% looking for growth in emerging markets. Almost 45% are focusing on new product development for new markets and customers. Two thirds of advanced manufacturers are either involved with or plan to be involved with low carbon technologies.

18 WHAT IS A SUPPLY CHAIN? The network or system created amongst different companies producing, handling and/or distributing a specific product. Specifically, the supply chain encompasses the necessary steps it takes to get a product/system or service from the supplier to the end customer.

19 UK AUTOMOTIVE SECTOR The UK accounts for 7% of European vehicle assembly and 1.8% of worldwide vehicle output, ranking it fourth in Europe and twelfth globally. 7 volume car manufacturers 8 Commercial vehicle manufacturers 11 Bus and Coach manufacturers 8 Formula One Teams More than 10 niche and Specialist vehicle manufacturers All of the above is supported by around 2,350 component manufacturers, a highly sophisticated retail and service/ maintenance sector, which in generated some 22 billion value added to the UK economy, and comprises some 66,000 businesses employing 518,000 people.

20 AUTOMOTIVE OPPORTUNITIES The Automotive Council recently published research that identifies more than 3bn pa of opportunities for UK automotive suppliers, and overseas companies wanting to invest in new facilities in the UK. The government survey identifies key components that vehicle The government survey identifies key components that vehicle manufacturers are looking to source in the UK to support new and existing model programmes

21 AUTOMOTIVE LOCAL HEADLINES 420 million confirmed investment in Sunderland for the production of the Nissan Leaf from 2013 and for a new stand-alone facility to produce lithium-ion batteries for Renault and Nissan vehicles. A 192 million investment to design, engineer and build the new Qashqai; safeguarding 6,000 jobs, and 43% UK sourced parts. In December 2011, Nifco UK took ownership of a new 8.5 million state of the art factory based in Eaglescliffe, and MAS is currently working with TVU (Local Enterprise Partnership) to better understand the supply chain opportunities within the Tees Valley for SME s who with further support may have the capability to diversify into or to expand their current activities. In August 2012, Vantec Europe in Sunderland announced the creation of 81 jobs adding to the 230 jobs the company is creating by 2015 as part of its 22.5m investment in a new 421,000 square foot building at Turbine Business Park, Sunderland. North East England is at the centre of electric vehicle manufacturing industry in the UK and its vision is to become a world leader in research and development for the industry. It is envisaged that the automotive sector and its related supply chain could soon be worth close to 1 billion in the North East, with access to further opportunities across the UK.

22 RAIL THE OPPORTUNITIES (Department of Transport) Over the next four years, the government will provide 14 billion of funding to Network Rail to support capital maintenance and infrastructure investment; and 750 million for high speed rail. They will also fund the Crossrail project, the Tube upgrade programme, light rail projects in Birmingham, Tyneside, Nottingham and Sheffield; and provide additional funding to franchisees for extra rolling stock. LOCAL HEADLINES Hitachi will create more than 900 jobs and thousands more within the supply chain after securing a 4.5bn contract to supply Britain with the next generation of intercity trains. Commencing in Nov 2013, through to June 2015, register at Construction at the Newton Aycliffe site is expected to begin in Nov 2013 and will be fully operational by June 2015, with the first IEP trains entering revenue-earning service on the Great Western Main Line in 2017 and on the East Coast Main Line by 2018.

23 AEROSPACE & DEFENCE THE OPPORTUNITIES (BIS) The UK has world s largest aerospace industry outside the USA with 17% share of global market, and in 2011 revenue totalled 24.2bn, representing a 4.7% increase over the previous year, which was mainly in civil projects. Directly employs around 101,000 people, supporting a total of 230,000 jobs across the UK economy. Highly-skilled workforce: 36% of all employees have University degree or equivalent. LOCAL HEADLINES MAS is already engaging with a number of local SME manufacturers in support of SC21, including Analox, Thermacore and Merlin Flexability, and is about to embark upon a number of other similar projects both in the North East, but also in North West and Cumbria, with BAE Systems.

24 NUCLEAR THE OPPORTUNITIES (Source: NIA) The UK needs 60GW of new electricity generating capacity and associated infrastructure by The Government has estimated that 110 billion of investment in generation infrastructure is needed over the next 10 years. Nuclear accounts for 16.5% of UK Electricity Supply and 9 of 10 plants are scheduled to close over the next 15 years. Main opportunities exist within the clean up of sites, however tendering for groundworks and civils at Hinckley Point C is at the pre-qualification stage. LOCAL HEADLINES Darchem Engineering has won a multi-million-pound contract - its first in the nuclear sector for two decades - creating 20 new jobs within a new 8Million new factory. Nuclear Institute NE branch, is a local charitable organisation who are very knowledgeable in this sector and who also run bi-monthly events for members (

25 OTHER SUPPLY CHAINS Other supply chain sectors with a significant presence in the North East Oil & Gas There are thought to be in the region of 66,000 workers and around 1,500 supply chain companies in the region which supply the sector while the 200 NOF Energy members in the region have a combined turnover of 2.5bn. 70% of all UK Platforms are built within the North East Region. Food Greggs the bakers is the best example of an organisation who have embraced an improvement culture and reaped the benefits. Ten regional bakeries supply 1,500 shops using a fleet of 375 delivery vehicles, and this is set to grow by 500 outlets and another 6000 jobs in addition to the 20,000 already employed Renewables NAREC based in Blyth has invested over 150 million to create UK s national translational research centre for accelerating the deployment of offshore renewable energy technologies. LEP s in both Teesside and Tyneside are very active in their support for this sector. Service Within all of the key sectors there is also a requirement to ensure that post sales service is delivered in a way that ensures customer retention and also attracts new business.

26 SME SUPPLY CHAIN REQUIREMENTS Strong and committed leadership, and vision within the business Fully understanding the needs and expectations of their customers, in order to create value. Nurturing Creativity and Innovation (Products & Processes) Structured and strategically aligned Processes. Robust Performance Management System, and staff accountability Train and empower their people to deliver the customers and business requirements Build strong partnerships with organisations, academia and other support groups Establish strong relationships with their customers and suppliers but also their requirements and thinking. Accredited Quality Management System Cultivate and Continuous Improvement Culture within the business Talk your customer s language, and be quick to spot opportunities Excel at what you do and build your customers capability Harness available technology at both a business and process level Awareness of legislation requirements within sector.

27 SOURCING FROM LOW COST ECONOMIES? LONG LEADTIMES BATCH SIZES (BULK CONTAINER RISING WAGE COSTS SUB STANDARD MATERIALS & PROCESSES ETHICAL & ENVIRONMENTAL CONCERNS WHAT ARE THE KEY ISSUES OF SOURCING FROM A GLOBAL SUPPLY CHAIN? CUSTOMS AND TRADE BARRIERS VOLATILE CURRENCY MARKETS NATURAL DISASTERS LANGUAGE DIFFERENCES POOR QUALITY

28 SUPPORT / APPROACHES TO ADDRESSING? IDENTIFY SUPPLIERS & CUSTOMERS BEST PRACTICE EVENTS GRANT FUNDING CERTIFICATION & ACCREDITATION THERE IS A WEALTH OF SUPPORT AND FUNDING AVAILABLE TO HELP SME S WHO ARE AIMING TO BECOME PART OF A RECOGNISED SUPPLY CHAIN DEVELOP NEW PRODUCTS & MARKETS QCD IMPROVEMENT DEVELOP A CLEAR BUSINESS STRATEGY TRAINING & SKILLS NEEDS PROCESS IMPROVEMENT RELATIONSHIP MANAGEMENT

29 QUESTION TIME Find out more on: Call us on: Any questions?

30 THANK YOU for manufacturers

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