Making the right noises to advance manufacturing
Advanced manufacturing and aerospace have been badly hit by the Covid-19 pandemic. We brought sector leaders together with the Lancashire Enterprise Partnership to examine what the future will look like for these vital industries
GS: The key issues for aerospace are the continuing uncertainties arising from the Covid-19 crisis, Brexit and net zero climate change demands.
With Covid-19 we’ve seen the collapse of commercial air travel and that cascades through the supply chain into massive reductions in airline purchases. We’ve seen the progressive reduction of stocks and then parts through the chain.
With Brexit, we see increased costs associated with preparation of paperwork, the additional logistics costs of stockholdings.
- Richard Slater – Lancashire Business View (chair)
- Paul Armstrong - VEKA
- Steve Fogg – Lancashire Enterprise Partnership
- Phil Heyworth – JD Engineering
- Khalid Saifullah – Star Tissue
- Gordon Smith – North West Aerospace Alliance
- Annette Weekes – PDS Engineering
- Wayne Wild – WEC Group
Then we see the impact of climate change, perhaps more for the medium-term, in terms of how that might affect demand for air travel and indeed the responses. All those things also have opportunities, but there are ongoing challenges both from the immediate effects and the continuing uncertainty.
If we let a section of the supply chain drop away it will be almost impossible to rebuild so we need to be re-energising.
I know the Lancashire Enterprise Partnership is working and mobilising the aerospace task force in the county and its report is key to actually showing how we can secure future investment.
Looking at the longer-term, the question is, what do we need for airlines to buy new aircraft that meet the requirements of climate change commitments? That gives you a whole new pipeline of innovation.
The infrastructure, both in terms of skills and assets like the AMRC NW, means the sector and the region are really well placed, if we have the ambition.
WW: Apart from the extensive Covid challenges that everybody has had to deal with, the short-term issues we face are material supply and prices.
Steel prices have increased dramatically, 30-40 per cent over the last few months, mainly down to low supply chains, and 50 per cent of our outgoing sales are input costs of steel. We don’t know what will happen after January.
In the medium and long-term, the challenges are continuing to keep up with latest technology and innovation and the funding needed for that, whether from the business or from organisations such as the LEP.
When it comes to skills, a lot of companies seem to expect people just come off a production line, all skilled and ready for work. It’s the government’s responsibility to get students educated to a particular level and after that it is companies’ responsibility to train.
We created our own academy in Darwen over a decade ago with no government support. It started with one or two apprentices a year and we’re now taking 20-30. It cost us a lot of money and we’re now building a state-of-the-art academy that will train the wider industry as well. You’ve got to do this for yourself.
I feel very positive about 2021 and there will be some fantastic opportunities, you’ve just got to go and find them. We spent £5m on new state-of-the-art equipment in 2019 and that has put us in a more competitive position than most companies in the UK.
People think automation means a reduction in jobs; we’ve seen an increase in jobs in the automation areas to keep up with the increased production.
PA: In March, within a 48-hour period we went from working almost flat out to nothing, so we shut the factory for around eight weeks.
We started back at around 25 per cent capacity. The pace of recovery in construction was far greater than we expected, and the challenge was to then bring people back to work in a way to keep up with that demand.
Over the last three months we’ve actually exceeded our original budget levels. That has brought with it supply chain and raw material supply challenges.
We’ve also been working to pull together our five-year plan and we’re looking to grow the business by 25 per cent in that period. How are we going to do that? By looking at market share growth but also by diversifying into ‘outdoor living products’; fencing and decking.
We also made a big investment in a mixing plant in 2013 and we’re starting to supply mixed compound to other extrusion organisations in the UK, so that’s a real opportunity for us.
Where do we need some help? There’s a lot more we can do around digitalisation. We don’t have much automation other than in our warehouse operation. We need help in knowing what is state-of-the-art in that field and how we can apply it to our business.
To find the headroom to invest in things like automation to move forward is a challenge, but we will face that challenge.
When it comes to investing in skills, we are starting to work with Burnley College to look at developing formal qualifications and craft-type apprenticeships recognised in the industry.
KS: As a business we have invested more than £5m in 2020 and built two new warehouses in Mill Hill. We’ve also put a whole new production line in.
We’re hoping to increase our business by 20 per cent in the next year. We believe that once we’re post-Covid there is going to be a lot more demand for our products.
We have diversified our range and we are producing a lot of medical hygiene products and increasing the consumer retail side. One of the things in our pipeline is the possibility of building a new manufacturing division focusing on retail hygiene products.
In terms of training, we are working with machine manufacturers and some of our senior technicians to build a programme. We have a new production line, and we need to have qualified people.
It’s great spending a couple of million pounds on a machine, but equally important to invest in the people so you can get the best out of your machine and your resources. People seem to forget that a lot of the time.
We’re engineers and we can make anything so we’ve asked, what’s required?
I’m really excited by some of the new technological developments around cobots and automation. We are looking at robot palletisation, we’re looking at more automated loading and unloading, huge areas of development.
We are going to be making some serious investments aimed at boosting productivity, efficiency and data. What we’re finding is understanding what the machines produce, how they operate and having a central base where all the data is managed, we can make decisions a lot quicker.
PH: The opportunities are out there you have just got to look for them. We’re currently in communication with the HS2 rail project team and others about getting on their supply chains.
For a small engineering firm, the reach we have is superb, we’re working with companies like Siemens, Avanti West Coast Rail and Vivarail and sometimes I just sit and think we’re punching above our weight. But there is no reason we can’t go out and work with the big companies and groups.
We need to do a little bit of industry 4.0, we do need to automate and look at modernising the workshop.
Everyone wants investment, it’s getting that support as well, so we recently joined Make UK and are looking for mentoring and guidance and getting information.
I hate it when manufacturing as a whole says we’ve got a skills shortage; we’re always going to have that skill shortage unless we address it.
We’ve been working with a lot of primary schools in the area to try and present engineering and manufacturing a viable career. If we want to get these youngsters into the sector, we need to inspire them at an early age.
There is a lot to address with skills. We want kids coming out of school to join our apprenticeships but we want them with 20 years’ experience. We have got to be a little more realistic when we’re looking at those skills as well.
AW: Within the aerospace sector it is not good and looking forward this year I can’t see it improving any time soon. The loss of work at Rolls-Royce in Barnoldswick is a massive blow to East Lancashire.
I hope that it doesn’t have a knock-on impact. It’s on the rest of us to pick up the slack and be the innovators and push growth going forward.
In terms of diversification, we’ve done a lot of that. As a business we have always been that way inclined. So, we’ve made hospital and mortuary equipment, we’ve worked in the food industry. We’ve had a totally flexible approach, we’re engineers and we can make anything so we’ve asked, what’s needed? That has massively helped us as a business.
There are some big opportunities coming, if you look around HS2 and rail, the push for the green agenda. There’s nuclear and the Eden Project North at Morecambe coming our way and that potential means it is quite an exciting time.
We are a county of makers and doers and inventors and if we can’t seize some of these projects and make it happen, I’d be amazed.
We have done work with the AMRC NW around digitalisation, 3D printing, cobots and increasing the tech of businesses, particularly small businesses in the supply chain. If they can engage with lots of the manufacturers that are suffering, we would see gains in productivity, which would also help with the skills shortage.
SF: The civil aerospace market will come back, but we did a report jointly with the NWAA and businesses across Lancashire that talks about it taking between three and five years, and at an extreme seven, before we start to see it. We’ve got major issues but you have to stay optimistic.
As we head towards the future the green economy is going to kick in. We’re going to have to invest in that green economy and there are going to be new opportunities for manufacturing. New businesses will emerge from the process.
Electrification, hydrogen, nuclear, all those things are going to start to emerge and we’ve got to get that centred in Lancashire if we can.
We’ve got three amazing universities in Lancashire that can also support this whole process.
The opportunities are rich, the world of digitalisation and automation is going to transform what we do and the businesses that lead and invest will see a huge difference. That is why we’ve invested in the AMRC to get it set up at Samlesbury.
We have to decide in Lancashire whether we want to lead or follow and I’d encourage us all to be the advanced manufacturers of the future, to get into the new markets.
Government will help us; we’ve just got to give them the golden opportunities to do so.
We’ve set up an advanced manufacturing sector group and an aerospace one, we’ve brought business leaders together to define the future.
Don’t sit there quietly, shout up, come and join us, get involved and let’s get a powerful voice for Lancashire, because that’s what we’ve got to do.
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