Manufacturing

Manufacturing News, May 2017

 

Organisations which have introduced advanced automation into their workplace are seeing revenue growth, job creation and greater employee satisfaction, according to a new global survey.

 

By 2018, almost half of companies (46) said they would need greater automation to handle the volume of tasks being generated.

By 2020, nearly nine in 10 companies (86%) are expecting to hit breaking point. More than three-quarters (78%) said data from mobile devices and the Internet of Things was compounding the issue.

 

Intelligent automation – such as artificial intelligence or machine learning, could help increase productivity, said almost all (94%) of those surveyed, streamlining decision-making to increase the speed and accuracy of business processes.

 

Executives believe automation can create jobs, contrary to popular perceptions of related job losses. The message isn’t being clearly communicated, however, with the vast majority (87%) of execs stating that employees worried about automation eliminating jobs.

 

The top obstacles to automation were cited as: committing the resources (both budget and personnel) required; employees’ resistance to change, and redundancy fears. If those barriers can be overcome, nearly half (48%) of executives said that work levels had increased by 20% or more since investing in automation. Nearly all (93%) believe that reducing mundane, administrative tasks opens up employee creativity, yet almost the same amount (91%) said their skilled employees spent too much time on admin duties.

 

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Lightweight casting company Sarginsons Industries, is investing a six-figure sum in new energy efficiency measures at its Coventry foundry. The company is in the process of Installing two new gas furnaces, a new air compressor system and new LED lighting across its facility.

 

The £130,500 investment, which Includes grant funding of £26,365, will see Sarginsons reduce its C02 emissions by as much as 335 tonnes of C02 per annum as a result of the significant savings in the company’s annual electricity consumption.

 

By securing this grant funding, Sarginsons has become the first company to utilise the Coventry and Warwickshire Green Business Programme, which is part financed by the European Regional Development Fund and is being delivered by Coventry City Council, Coventry University and Coventry University Enterprises Ltd.

 

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A new platform designed for low volume, continuous production and mass customisation has been unveiled by additive manufacturing and 3D printing company, Stratasys. Revealed at the RAPID + TOT show, the Stratasys Continuous Build 3D Demonstrator could represent a significant step forward in low-volume, continuous production using additive manufacturing technology.

 

The new platform is composed of a modular unit with multiple 3D print cells working simultaneously and driven by a central, cloud based architecture. It has been designed to produce parts in a continuous stream with only minor operator intervention, automatically ejecting completed parts and commencing new ones.

 

 

Each 3D print cell can produce a different job to help enable mass customisation projects. Additional cells can also be added to increase production capacity as and when demand requires.  Additionally, integrated automatic queue management, load balancing and architecture redundancy aim to accelerate throughput as jobs are automatically routed to available print cells.

 

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Manufacturers agree that data collection from sub-components will drive incremental performance improvement. A gathering of senior manufacturing executives including from JLR, JCB, Nissan, Unipart, Yamazaki Mazak, and Coty – has highlighted the role that the Industrial Internet is set to play in eking out incremental performance Improvement in their operations.

 

Executives – sharing, under ‘Chatham House Rules’ – noted that manufacturing’s fundamentals were broadly unchanged over the past couple of decades, and that more attention needed to be focused on manufacturing process innovation, and not just product innovation. Data collection from manufacturing equipment, down to the level of sub-components, created both opportunity and challenge.

 

The opportunity centred around the ability to build more accurate physics models, and drive manufacturing optimisation through Incremental improvements. There was agreement that a global best practice performance benchmark of 85% still left a lot of room for value creation – as fractional Improvements delivered compounded margin gains.

 

The challenge was identified as being whether data collected from connected manufacturing equipment was fit for purpose. As an industry, manufacturing creates – and then discards – more data than any other industry. If data is not valued by a company, it will not be able to take advantage of the step change in performance promised by 4IR (the Fourth Industrial Revolution).

 

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Britain could build on its position as a modern manufacturing powerhouse if the newly elected government commits to a long-term, ambitious industrial strategy, says EEF in its manifesto published.

 

In the manifesto, Making the Future, Making Britain Great, EEF is urging a new government to use the opportunity to fully commit to a comprehensive industrial strategy, building on the momentum created by the surge in recent manufacturing performance in recent data including GDP and PMI Figures.

 

Setting out the organisation’s key aims for a new government, EEF calls for:

 

A comprehensive industrial strategy to boost economic growth and social wellbeing across the UK driven by the office of the Prime Minister with all government departments accountable for delivery.

 

An ambitious Brexit deal that retains the benefits of the single market and enables seamless trade between Britain and the EU with minimal cost to business.

 

A new immigration system giving employers the ability to manage work permits ensuring they have access to the people and skills they need.

 

A boost for innovation, enhancing research and development incentives and making a solid commitment to improve digital technology, including the expansion of fast broadband.

 

A clear commitment to deliver the third runway at Heathrow and improve road and rail links.

 

An extension of devolution deals across England with a focus on improving transport links.

 

A renewed commitment to reduce regulatory cost on business including an enhanced role for the Regulatory Policy Committee.

 

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Activity in the UK’s manufacturing sector grew at its fastest pace for three years in April, according to a closely-watched survey. The Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) rose to 57.3 from 54.2 in March, well above economists’ expectations. Reading above 50 indicates growth.

 

Markit said the sector enjoyed “solid improvement” last month, with new orders being received at the fastest ate since January 2014. The survey found the main source of new work came from the domestic market, but there was a “solid increase in new export business” due to a combination of better global economic conditions and the awakening of the pound.

 

Markit said price pressures faced by manufacturers remained “elevated”, but noted that input cost inflation had “eased significantly” since January.  Official figures from the Office for National Statistics last week indicated that the UK economy grew by just 0.3% in the first three months of the year, the slowest rate since the first quarter of 2016.

 

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Historic company Sheffield Forgemasters has turned its performance around in a breakthrough year, narrowing losses by more than £6m.  Last year it posted pre-tax losses of more than £7.6m, narrowed from the year before when the firm posted £10.6m in losses. Now, Forgemasters has reported that pre-tax losses have narrowed by £6.7m to £900,000.

 

Efficiency measures, continued investment and an aggressive drive towards new markets were behind the turnaround, said the company. It has also undertaken a major restructure, and invested in its facilities during the year, including a £6.5m investment in machining centres to reduce production bottlenecks. The Sheffield Local Enterprise Development Fund contributed 10% to the capital cost. Net debt increased as a result of the investment programme, to £7.9m.

 

Tony Redder, chairman at Sheffield Forgemasters International Ltd, said: “Despite a pre-tax loss, we accrued exceptional restructuring costs of £1.7m and with that non-recurring expense taken into account.  We posted a modest post-tax operating profit, which is a major step in our recovery programme from 2015. “We are addressing all aspects of governance, we have a new chief financial officer, James Tate, and I am pleased to welcome three new non-executive directors to the board. Janice Munday, Jon Bolton and David Duggins who bring a breadth of experience and will be valuable additions to our team as we go forward.

 

Graham Honeyman, chief executive at Sheffield Forgemasters, said: “The financial results for 2016 demonstrate that our efforts to turn the business around have delivered and we are clearly heading in the right direction. “The cost cutting measures which have taken place over the last eighteen months together with increased gross margin have helped to secure an operating profit sooner than anticipated. “Depreciation of the sterling currency, which resulted from the Brexit decision in June 2016, has also had a positive impact on the company’s results due to the proportion of sales made outside of the UK. “And continuous improvement initiatives involving lean manufacturing techniques together with fundamental changes to the organisational structure are bringing significant operational efficiencies.

 

The program of organisational change is set to continue and we expect further improvements to be made over the coming years.”

 

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The UK’s small and medium-sized (SME) manufacturers have reported strong growth in domestic and export orders in the three months to April, according to the latest quarterly CBI SME Trends Survey.  The survey of more than 370 UK manufacturers found that total new orders growth was at a three-year high, driven by solid rises in both domestic and export orders, with the latter growing at the fastest pace since mid-2011. Output growth was at its highest for 6 years, and orders and output are expected to strengthen more in the coming quarter.  As a result, sentiment amongst SMEs is upbeat. Optimism about the business situation rose at its fastest pace in almost three years, with export optimism climbing at a record rate.

 

The weak pound is continuing to stoke inflationary pressure, with SME manufacturers reporting the strongest rises in unit costs and prices for more than half a decade.  Investment plans for the year ahead deteriorated, particularly those for buildings and plant & machinery, after improving over the previous two quarters. Though, Investment intentions remain a little above their long-run averages.

 

Key findings:

 

Domestic orders rose at their fastest pace (+19%) since October 2013 (+20%). Export orders growth accelerated (+20%) the highest since April 2011 (+23%).

 

38% of businesses reported an increase in total orders, and 18% a decrease, giving a balance of +20%, the highest since April 2014 (+20%).

 

34% of UK manufacturers said employee numbers were up, and 11% said they were down, giving a balance of +23%, the highest since July 2014 (+24%).

 

31% of firms said they were more optimistic about the general business situation than three months ago and 15% were less optimistic, giving a balance of +17%. Optimism about export prospects for the year ahead rose at a record pace (+32%).

 

Average domestic prices (+26%), average export prices (+28%) and average unit costs (+38%) all rose at the fastest rates for 6 years.

 

Manufacturers intend to spend less on buildings (-15%) and plant & machinery (-10%) over the next 12 months than they did over the previous twelve months.

 

Key findings – looking ahead:

 

Total new orders (+26%), domestic orders (+19%), export orders (+27%) and output growth (+23%) are expected to continue to grow strongly over the next quarter.

 

Average domestic prices (+27%), export prices (+28%) and unit costs (+32%) are all expected to rise quickly again over the next quarter.

 

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