Automation is already starting to cause the next big industry shake-up in the logistics sector, and, when the dust settles, the leaders will be those that get it right. However, many large companies are caught between, on the one hand, the need to automate across their operations in order to meet client demand and reap the rewards of being an early adopter, and, on the other, the fear of getting this big, strategic investment wrong.

This creates a dilemma about whether to dive in now, even though some questions about the best approach to take still remain unanswered, or wait on the side a while longer, watching what others do and how they fare before taking the plunge.

We looked in some detail in our article What lessons can the logistics sector learn from the automotive industry? at the factors driving the inevitable automation of this industry. It’s clear that it’s not so much a question of whether to automate but rather when and how to do it and which parts of the business to prioritise. However, a number of issues are holding companies back.

Risky decisions

E-commerce has been disrupting the retail and logistics sectors in a number of ways for some time and continues to do so as it solidifies its status as an established and maturing distribution channel. While it is an automation driver, it has also complicated the marketplace, with customers competing with their suppliers in some cases. Large e-retailers are increasingly bringing their distribution functions in house, if they weren’t already, starting with the most lucrative and easiest to fulfil. This is driving third-party logistics companies (3PLs) into higher cost, lower margin areas, at the same time as their customers are pushing for shorter contract lengths to enable them to adapt with agility to the fast-changing retail environment.

Meanwhile, e-commerce itself is just one facet of a wider omnichannel retail environment, in which consumers can purchase and receive goods via any combination of channels – for example, buying online and collecting in store or receiving delivery at home, buying in store and leaving with the goods, or having them delivered elsewhere. This, combined with extreme seasonal peaks and troughs and the unpredictability caused by factors like COVID and Brexit, demands exceptional flexibility, which can make it difficult to right-size operations capacity across the supply chain. Supermarkets and other retailers saw a huge increase in home delivery requests during the Coronavirus lockdown. This is prompting some to reassess current systems that involve picking goods in store for home delivery, and look instead at a more centralised approach to distribution.

Another complication is that there are a large number of automation technologies available to choose from, with new developments coming out all the time, and none has yet proven to be the de facto solution or gained a wide market share.

All of this increases the risk and complexity for logistics companies looking at investing in automating their operations, even as it pushes them to do so.

Incremental approach

It makes good sense, therefore, to automate operations incrementally, site by site, on a regional basis, beginning with functions that involve a high proportion of manual labour. In this way, companies can test different approaches and then roll out only best-of-breed solutions.

Similarly, deploying hybrid systems that partially automate manual operations and make them much more efficient can be a lower risk steppingstone to fully automated warehouses, distribution centres and delivery mechanisms. This might include things like exoskeletons for super-charged manual lifting or retrofitted forklifts that can be operated both manually and autonomously.

But how do you work out what’s right for your business? The temptation is often to over-specify in order to be able to meet any future peak in demand. However, that can result in excessively costly and complex solutions that can actually hold you back.

Scoping out exactly how to successfully introduce automation requires a methodical and analytical approach. It’s essential that you ask the right ‘what if’ questions, make the right decisions in the right order and ensure you have the right skills and expertise in place to make it all happen. The end game is automated systems that will give you the flexibility and agility to respond to all kinds of changes over the next ten years. That means you need to be confident you’re making the right choices now.

Fortunately, there are some tried-and-tested techniques you can apply here that will help to ensure you do it well and reap the associated rewards for your business.

Early Management for rapid success

Total Productive Maintenance (TPM) provides a structured approach to eliminating all kinds of losses across a whole organisation and throughout its value stream. However, it can also be used to solve specific business challenges or introduce new products and processes quickly and effectively. As such, it can be extremely helpful in formulating and implementing an automation strategy.

Early Management is one of TPM’s eight pillars of activity. It enables companies to build on lessons from previous experiences in order to eliminate potential for losses throughout the planning, development and design stages of new systems and services. That includes, for example, zero equipment breakdowns baked into the design process and rapid development lead times, with different teams working on activities simultaneously. This results in cost savings and efficiency improvements, both during the introduction phase and throughout the equipment life cycle.

Avoiding equipment issues

The more your business relies on automated equipment, the more important it becomes to ensure it works reliably and effectively, with minimal downtime. The introduction of TPM methodologies to your business should go hand in hand with automation. As well as helping you ask the right questions early enough in order to specify, implement and roll out the best automated systems, TPM can ensure their ongoing absolute efficiency through Autonomous Maintenance – a step-by-step process to optimise equipment and prevent accelerated deterioration.

How well equipment is operating is calculated using TPM’s Overall Equipment Effectiveness (OEE) measure, the de facto standard for gauging equipment performance by looking at its availability, performance and output quality. These three factors are then broken down further into types of losses, such as breakdowns, changeovers, minor stoppages and speed loss.

By looking in such granular and methodical detail at every type of potential problem and solving it before it happens, you can reduce costs while offering a top-quality service to customers.

Lean machines

If you’re just embarking on your automation journey, lean management methods are also likely to be helpful in enabling you to precisely specify the approach you need to take. Equally, fully automated businesses can make big improvements to their productivity and profitability through lean techniques.

Lean helps to eliminate everything that does not add value to your business. It works on the principle that the key to reaching and sustaining world-leading competitiveness is to have a vision of the desired future state of a process or product and a strategic plan for making that vision a reality. It then helps companies achieve this by unleashing the potential of each individual employee, unlocking their problem-solving capabilities and reinforcing management skills. Everyone then engages in applying specific improvement tools and techniques designed to make change happen in a sustainable manner. It’s not hard to see how this could help with the introduction of new automated systems that require people to change their ways of working.

Picking the right tools for the job

Every company is different, and there is no one-size-fits-all approach to automation. However, the same kinds of questions need to be asked in every case. Both TPM and lean offer tried-and-tested methodologies to guide you through complex or risky business transformations, helping you make good decisions, confidently.

If you’re not sure which methodology to apply, we can help. In many cases, a mix-and-match approach works best, picking the elements from each that will be most helpful for your business at different stages. We can work with you to understand your current situation and prioritise your needs, then help you develop and implement a plan of action, drawing on TPM and lean management techniques as needed. In this way, the methods you use to get your automation right will also have positive repercussions across every part of your business, standing you in good stead for the challenges ahead.

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Article written by: Simon Carr, General Manager SMMT Industry Form

Simon has 24 years engineering and operations experience gained within aerospace, industrial processing, automotive, food and drink, defence, electronics, fabrication, petrochemical, offshore systems, pharmaceutical, healthcare and banking. Simon was one of the original Industry Forum recruits and was trained by the Japanese Master Engineers.  Recent assignments include significant capital projects for the Ministry of Defence and in the Oil & Gas sector.

If your business works in low batch volumes but with a high degree of product variety, or if other aspects of your work are characterised by uncertainty and change, it can be tricky to respond with the speed and agility your customers need. Understanding how to improve efficiency and reduce lead times can make you far more productive and competitive. An approach called Quick Response Manufacturing (QRM) can help.

QRM is a dynamic formula that focuses on reducing queues and bottlenecks to optimise flow in manufacturing processes characterised by lots of product variation. It can be used in conjunction with other methodologies such as Lean, Total Productive Maintenance (TPM) and Six Sigma.

Like lean, QRM aims to eliminate waste while promoting team empowerment and continuous improvement. However, it uses a less standardised, more flexible approach and a different mapping methodology to identify inefficient processes, both on the shop floor and in the office.

Alcon’s QRM transformation

It was these agile qualities that first attracted Alistair Fergusson, Managing Director of high-performance brake and clutch manufacturer Alcon, to QRM. After expanding from motorsports to supporting small automotive suppliers, the company needed to scale up its production capabilities to accelerate into the performance OEM sector. Fergusson felt QRM could provide the answer and requested Industry Forum’s assistance through the LTASC funding scheme. The results have been impressive.

“Lean doesn’t really do everything we want to do because we are a low volume batch, high variance manufacturer,” he explains. “Although QRM has similarities to lean, it is quite different. Lean is quite prescriptive, while with QRM, you have to be more adaptive to the specific business. The special magic that Industry Forum brought was the constant recalibration of what they were doing with us to ensure it met what we needed. They were flexible and adaptable to our requirements and it worked really well.”

QRM and Lean also dovetail well together, with QRM providing additional flexibility and adaptability suitable for high-variance environments. QRM helps organisations pinpoint and diagnose specifically where in their operations lead times become extended, for example, due to poor process, unreliable equipment or quality issues. Both QRM and lean can then be used to laser focus in on these areas to resolve the problems – with numerous knock-on benefits for all parts of the business. As Rajan Suri, who developed the methodology in the 1980s, put it, QRM is “a relentless emphasis on lead time reduction that has a long-term impact on every aspect of your company”.

QRM comprises of four core concepts:

1. The power of time – every stage in the fabrication process is viewed through the lens of the value of time. A measuring system known as Manufacturing Critical-path Time (MCT) is used to understand and visualise where bottlenecks such as design decisions and customer approvals occur.

1. Organisation structure – teams are formed around production goals and have ownership of the process from start to finish. Known as ‘cells’, they are cross functional and autonomous, incorporating all the required skills to complete their task, as well as in-built redundancy. Cells are assembled and dissolved according to changing requirements and members are cross-trained and adaptable.
2. System dynamics – spare capacity and optimised batch sizes help to absorb variability in demand and protect lead-times.
3. Enterprise-wide application – these approaches are applied to all parts of the organisation, on and off the factory floor.

Bespoke approach

Working with QRM Denmark, Industry Forum put together a bespoke programme for Alcon based around these principles. “QRM is all about the value of time and getting things through the entire process – design, development, production engineering, production and out the door – more quickly,” says Fergusson. “It’s a process of exploring and understanding your own business.” Group sessions and interactive exercises helped his team members to develop a baseline understanding of the QRM approach, before diving into deep analysis of different functions.

“We took a specific area of activity and worked out what the MCT was,” recalls Fergusson. “If something takes three weeks, you may find that for 2.5 weeks, you’re waiting for the next operation to happen.” As a result of this analysis, Alcon took a decision to combine its 5-axis machining and motorsport design functions.

Next, Industry Forum and Alcon looked at organisational structure, in order to dismantle functional silos. Fergusson explains, “A QRM cell is a business unit that has the full breadth of skills, empowerment and competence you need to get from the starting point to the end. This breaks down communications barriers. There’s no chucking of half-finished things from one person to the other. It resulted in better co-working between design and production, and we have now rolled out this approach across the whole business, regardless of other QRM activities. The sorts of wins we’re now seeing are 50% reduction in programming time and actual run time on certain products and at least a 30% uplift in productivity.”

Because products are now shipping far more quickly, cash flow has speeded up considerably too. Says Fergusson, “It’s no longer about utilisation of capital assets. Our finance people have remodelled their KPIs.”

Cultural change

Eighteen months into the QRM programme, the culture of the organisation has shifted. “We are now in a state of quite constant change and, I’m pleased to say, people are getting used to that. There’s no sense of stagnation anywhere. Everyone knows we are going to be doing things differently tomorrow from the way we did them yesterday, and that’s really powerful.”

This sense of positive change is manifested for employees in visible ways through developments such as new equipment, larger buildings and a better office environment. According to Fergusson, these improvements are creating a virtuous circle whereby people are inspired to create yet more positive impacts.

Double digit growth

The company’s growth certainly reflects these internal improvements, with turnover already up by 26%. Around 50 jobs have been safeguarded and a further 50 new ones created. According to Fergusson, however, this is just the start. “We think there will be bigger wins still, and that sort of quantum will be expanded out across the business. We expect to double in size within five years.”

Is QRM right for your business?

QRM is not only applicable to manufacturing environments with a high degree of product customisation. Because it is designed to help companies flourish when dealing with lots of disparate customer requirements, and because it is applied across the entire enterprise, it can also help other types of organisation cope with all kinds of complex, unpredictable and frequently changing circumstances. This includes Covid or Brexit, as well as business functions such as R&D, customer service and marketing that are more nebulous and less predictable than the production elements.

Industry Forum offers a variety of services to help you improve your company’s competitiveness through QRM, including, introduction days; training leading to formal accreditation; and consultancy to take you through the steps of organisation-wide rollout, dovetailing with other approaches, according to the needs of your business.

It’s hard to imagine how a company hit by an overnight 40% drop in volume in March 2020, might one year later reflect that Covid-19 restrictions were the best thing that ever happened to it. It may also be hard to fathom that the same company, which remained open for business throughout the pandemic, is actively eschewing face-to-face meetings in favour of conducting all business communications virtually and digitally.

Meet managing director of G&O Springs (and Microsoft Teams evangelist), Steve Boyd, who, with some outside help, has used everyone else’s annus horribilis as a golden opportunity to transform his family business.

Since the industrial revolution, G&O Springs’ home town of Redditch has been known for its production of coiled springs, stemming from the needle and fishing tackle trade. As with other traditional industries, manufacturing in the area has declined in recent years. Yet leading up to the pandemic, G&O Springs was enjoying double-digit growth, year-on-year. These were the rewards of efforts to carve out a strong niche leadership position at the high tech performance end of the springs market, predominantly in the aerospace sector.

Sounds good, doesn’t it?

“Actually, no,” disagrees Boyd, “We were so busy and fraught, we were losing control of the business, fire-fighting and limping from one challenge to another. Things were slipping. We were being left behind. The business wasn’t progressing, our systems and internal processes couldn’t cope. We were prioritising the customer but behind the scenes, the basics such as appraisals, 5s and TPM activities, as well as essential admin, weren’t getting done.”

Despite an order for 80,000 springs for Rolls Royce as part of the Ventilator Challenge UK, the arrival of Covid saw plummeting orders and the writing on the wall, at least for a few years, for the aerospace industry. The company was at a crossroads; it could shrug its shoulders and wait for 85% of its business to possibly never return, or reform – to use the enforced downtime to get its house in order and relaunch as a fitter business, ready to take on new opportunities.

Like so many businesses, headcount was one of the first areas to address and the 50-strong workforce was reduced by half by June 2020. G&O knew it had to rebuild from the ground up with a new strategy, and management and planning processes. It accessed funding through the SC21 C&G (Competitiveness & Growth) programme for supply chain companies in the aerospace industry. The delivery of consultancy and training, via manufacturing experts, Industry Forum, involved the adoption of new frameworks, organisational skills, competences and HR best practices. Boyd and his team were coached in new, systematic ways of working. “Industry Forum provided us with all the joined up thinking we needed,” he says.

As part of redesigning how the new-look company was to be organised, Boyd discovered Microsoft Teams. “We took the Industry Forum approaches and transferred them over to Teams so they became living, breathing entities – our own holistic, high-performing work system if you like. Every single aspect of the business is now run remotely through Teams. All our meetings, plans and documents – even our 5s and TPM daily, weekly and monthly audits – are run virtually, on Teams and using Microsoft Forms. Issues are raised as actions, pictures are taken, owners are assigned and timescales set. Team members are emailed automatically when they need to do something.

“The effect on our culture has been staggering,” he continues. “By digitalising and liberating our information and processes to everyone in the business, we have become a much closer, high-performing and connected community than we were before. We have a centrally-managed inbox that everyone can see. Everything is transparent. We all feel involved and openly collaborate. Trust has followed. We have a continuous improvement culture that we didn’t have before. We have very enthused people because they’ve been given responsibility.”

G&O has introduced new HR practices and Teams has provided the platforms to facilitate them. “We ask employees to vote on company plans. We reward people for their contributions and those contributions get fed into appraisals. We offer ways for people to recognise their peers. They are encouraged to make suggestions and we set people objectives.”

We know from the news headlines that the aerospace manufacturing sector is not going to bounce back in the immediate short term. So, one has to ask Steve Boyd, where his current positivity comes from.

“Specialising in high end aerospace, while maybe appearing risky, remains a strength, even now. Many of our competitors for whom aerospace represents a minor share of revenue are ditching it. We expect to be much bigger than before Covid. We think the growth back will be more significant than the drop. We’re recruiting again as our volumes are recovering.

“We are winning new business again; mainly opportunities we would not have been able to seal pre-Covid. We wouldn’t have been organised or coherent enough to entertain some of the new parts, new programmes and new customers all over the world that we’re talking to today. Existing customers see that our support, delivery and quality is better than it’s ever been, so there’s growth there too. We’re responsive. 98% of orders are delivered on time in full,” explains Boyd.

So what message does Steve Boyd have for fellow UK supply chain manufacturers? He replies passionately: “Firstly, you really cannot wait for this to pass. Things are never going to go back to the way they were. You’ve got to make it work. If you leave it any later, it will be too late. This is an opportunity to sort out all your problems.”

He encourages manufacturers to seek the help that’s available, from utilising technology to to looking into the support provided by the SC21 C&G programme (or NMCL as it is known in the automotive supply chain manufacturing sector). “We were one of the first companies to use SC21 support a few years ago and won their bronze award for performance in 2010. I sit on the Midlands Aerospace Alliance supply chain performance group and heard about the latest package. Simply put why wouldn’t you take the money?”

How a Coventry foundry has reinvented itself for the electric future

Published: 03/02/21

The advent of ACES (autonomous, connected, electric, and shared vehicles), as well as the slump in volume resulting from the Covid-19 pandemic, is causing unprecedented upheaval in the automotive industry. Companies producing diesel vehicle systems and components will already be familiar with the impact of a sudden drop in demand of long-established products, and it’s time for the whole supply chain to wake up. If ever there was a time to talk about ‘survival of the fittest,’ this is it!

At Industry Forum, we work with the automotive supply chain to understand the impact of such a seismic shift to the UK. If companies do not make the right products, any competitive advantage they currently enjoy from efficient manufacturing operations will be irrelevant. We have tended to see government funds prioritising new technology start-ups over established, well-run manufacturing businesses. While investing in UK innovation and sourcing ideas from outside the industry is a good thing, it should be remembered that those manufacturers alive and well in today’s tough environment have already proved themselves capable of the hardest part: commercialising new technology into serial production.

What sets one UK automotive supply chain manufacturer company apart from another in our new world is the ability not just to embrace change, but to actively influence it.

One business that is doing just that is Sarginsons Industries, with whom Industry Forum has worked for many years. Sarginsons could have been a poster child for the vulnerable automotive Tier 1 manufacturer: a traditional Coventry foundry, making aluminium castings, including internal combustion engine parts, for companies such as Jaguar Land Rover, Caterpillar and ZF. Instead, under the leadership of managing director, Anthony Evans, it has transformed itself into a diversified OEM solutions provider and electric vehicle (EV) technology backer. It has recognised the rise of the start-up and leveraged its position as an established, lean manufacturer to plug some obvious gaps. Times have never been better!

At the beginning of 2020, Sarginsons announced a new contract with start-up Char.gy, to develop revolutionary on-street charging points (charging bollard units or mounted to lampposts) for electric vehicles. Sarginsons supply the full unit to Char.gy; not only the aluminium castings but the internal assembly, including electronics, as well as the charging sockets. The companies are currently working together on new concepts for vehicle charging, which will be launched soon.

Anthony Evans believes SMEs should break down traditions and find new opportunities: “With no new diesel or petrol cars in the UK from 2030, the disruption is palpable. It’s creating newer and much smaller manufacturers, with bigger OEMs breaking down into smaller companies too. A larger pool of people to sell things to has to be a good thing. It remains to be seen how the industry will get the vehicles ready by the ever-encroaching government deadlines. Everybody is just busy creating ideas. Sarginsons wants to be the company taking those ideas and building the prototypes. The new customers are very very different!”

Anthony Evans has identified four main ways in which SME manufactures can fight fit in this rapidly changing environment.

1. Develop an investor mindset

“Sarginsons got the Char.gy contract because we were prepared to make a bold decision to invest in the idea of a disruptive start-up company, via our own facilities,” says Anthony. “What they were lacking in order to bring the products to market, we either had already, or knew how to put in place, and quickly. This included design-to-manufacture capability, tooling, electricians, production facilities and most importantly, equity.”

The EV charging socket was a new challenge for Sarginsons, but something they knew they had to take on. Anthony explains, “Assembling an electrical package, bolting it into the bollard and undertaking all the testing of it, was different for us. But as a manufacturer, we’ve got far more qualified electricians than any of these people will ever have. So, we said, yes, we can do it and with our internal electrical knowledge, we did.”

New entrants have little equity behind them to get their ideas into production. Sarginsons, while not significantly cash rich or backed by a plc, had sufficient capital to lay down the tooling, buy in the electrics, and help get Char.gy up and running.

“After making the decision to go for it, speed and flexibility was of the essence, if both parties were going to realise the benefits of being early to market. There was absolutely no point spending months developing a legal framework with Char.gy; it required a different way of thinking. We had our initial investment paid pack after orders for the first 90 bollards and 250 lamppost attachments,” reveals Anthony.

2. Infiltrate the supply chain

The Sarginsons team is much hungrier for business these days, with the confidence of a revitalised ‘can do’ attitude. Anthony explains, “We’re now working even further down the supply chain, speaking to the designers. We’re not waiting for the purchasing people to knock on our door.”

This means developing new relationships with established customers and making friends with new companies. “We’re supporting them with design-to-manufacture and getting ourselves involved with programmes as early as possible. A recent example of this is our involvement with an InnovateUK ARMD programme to design and develop EV chassis applications for Lotus Cars, as well as new concepts for battery tray and chassis architecture. We no longer say “that’s the bit we can do, you’ll have to talk to someone else about the extrusion” or whatever. We are bolder,” says Anthony.

Sarginsons is taking a big picture approach to the market. “Our business strategy is to support vehicle OEMs who want to sell EVs, but the consumer demand is never going to happen if there is a shortfall in charge points. We see ourselves as a key enabler in the chain.”

3. Modernise

Sarginsons has created a new technology centre, a more customer-focused presentation of its market offer, equipment and capabilities in a dedicated area of the factory. This was assisted by a grant from Coventry and Warwickshire Local Enterprise Partnership (CWLEP) and the European Regional Development Fund (ERDF) as part of the Coventry City Council Business Support Programme.

“With the creation of a technology centre, we’re not inviting our customers to visit a foundry, we’re inviting them to a design house. We are also working in collaboration with universities and research centres to ensure we are at the cutting edge of research and development,” says Anthony.

Capital investments have also been made metallurgical, metrology and automation programmes and Sarginsons took the opportunity to strengthen its MagmaSoft modelling capabilities, with online coaching and the investment of £100k in a MagmaStress stress seat and further MagmaSoft technology.

Modernising is also about cultural change, external branding and communication, as well as investment in new facilities and machinery. Anyone looking from the outside in to Sarginsons over the past couple of years will have witnessed a significant transformation, from the revamped website to a rebrand and fresh corporate positioning as a “leader in lightweighting.”

4. Focus on competitiveness

Sarginsons no longer accepts the traditional role of an SME manufacturer as a production facility in a defined automotive supply chain, where business improvement effort is limited to increasing efficiencies between the points of its inputs and outputs. This focus on overall business competitiveness, as opposed to simply productivity, is reflected in the government’s new National Manufacturing Competitiveness Levels (NMCL) funding programme. The difference between this programme and others designed to improve manufacturing supply chain performance is the focus on building capability to win new orders.

Industry Forum is an NMCL assessor and improvement provider and has helped many companies through the assessment stage of the programme. Anthony is encouraged by what he has seen of NMCL, “The previous equivalent government support programme, LTASC, was more internally focussed. It allowed us to undertake a lot of fundamental lean and problem-solving changes, as well as team leader and shop floor management training. We’re now ready to build on that. We’re hoping to use NMCL to better push lean and supply chain project management and allow us to step forward into the bigger and bolder world.”

To find out how you can join the NMCL programme, contact us.

Authored by: Richard Sadler, director of business development at SMMT Industry Forum 

Richard has over 15 years of Tier One automotive manufacturing and supply chain experience. Having started his career as an Apprentice, he soon went on to hold leadership positions in Production Planning, Purchasing, Engineering and Manufacturing. Richard’s last role was Operations Director of an Automotive Tier One, serving multiple OEMs both in the UK and overseas.