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Many companies have had their fingers burned by turning to suppliers whose costs are rising and whose quality has yet to reach the standards required in markets in which the UK still holds fort. Therefore, manufacturing remains a key element of the UK economy and a key source of employment for people directly involved in making products or in providing services to support the process. We need true professionals dedicated to managing this central activity.

Evan Davies, in the BBC’s Made in Britain TV series and accompanying book, argued that we need and can live with an economy in which service sector was playing a higher part than in the past. However, by the time of the world’s financial crisis of 2007-8, its evolution had gone awry. Recovery, he argues, brings three challenges:

  • We need to save and invest more, which means a rebalancing­ – shifting towards the manufacturing and exporting sectors.
  • We must find ways of coping with the inequality and regional imbalance that now exists. When manufacturing played a larger part in the economy the work it naturally dispersed itself around the country and used skills in all areas of the country.
  • We need to ensure that focus on the most productive activities; creating wealth rather than re-distributing wealth elsewhere.

The UK’s manufacturing industry

There are a number of areas where UK companies, or UK operations within multi-nationals, lead the way, including:

  • Designing and making to order, often referred to as ‘engineering to order’. This includes, for example, capital goods or application-specific items used in the production of oil, gas and other chemicals. Other areas may be aerospace, defence, transport and construction. Such businesses need to manage their supply chain on a project basis, bringing together sales, design, manufacturing and procurement to deliver critical items, often to tight customer deadlines.
  • Short life-cycle goods such as food and drink. As well as being unsuited to many days or weeks in transit, these can be subject to sudden and significant changes in demand, requiring ‘agile’ manufacturers who can respond quickly by re-scheduling plant while maintaining productivity in markets where margins can be tight. This requires good planning systems, manufacturing processes that lend themselves to quick changeovers and good relationships with equally responsive vendors.
  • High-cost, high variety products where the inability to accurately predict exactly which variants will be the subject of customer demand cannot be compensated for by stock levels – the standard approach for low-cost products filling warehouses alongside motorways up and down the country. Expensive items may be those made from expensive raw materials, or may be where the manufacturing processes require complex plant overseen by highly-skilled individuals. The answer is, again, agile businesses.
  • Specialist products designed in the UK where the nature of the manufacturing process and the integration of the manufacturing activity within the business is an essential factor for success. The Bentley plant in Crewe is but one example. Evan Davies, in Made in Britain, cites the new McLaren sports car and the Eurofighter, among others.

What is manufacturing management?

There are several specific activities involved in getting product to customers, each requiring specialists in the particular aspect of the bigger picture – everything from taking customer demand, with product specifications / designs, to passing product into the hands of those responsible for distribution:

Production/Process engineering
How should we make our product? What determines the nature of the plant to be used? Which elements of the manufacturing process should we keep in house and which should we seek to source from external specialists?

Determining the manufacturing process (sometimes known as ‘methods engineering’) requires specialists in the product. This may be chemical, mechanical, electronic, pharmaceutical or some other form of engineering. People who can translate product specifications into the most efficient, quality-assured means of making the product. In many industries skills are combined, perhaps mechanical engineers who can take responsibility for creating high-precision components with electronics specialists who can look after Printed Circuit Boards and assemblies to control these components through complex movement.

Of course, these people must take account of external factors. A plant that is very cost-efficient when running but requires significant downtime to affect changeovers may be ideal in an environment where products are changed infrequently.

Contract/Project management
In businesses where a product is designed to meet customer requirements, or where the supply contract includes more than just the physical goods being manufactured (perhaps installation and commissioning) ongoing liaison is a key part of the management process. Contract / project managers work to coordinate internal work teams, the customer’s representatives (who may have to witness certain activities) and third parties.

Production and inventory control
The definition of the discipline of P&IC is somewhat blurred, since some organisations may see these as separate – production planners responsible for production planning with another job title (perhaps ‘material’ planner) for those who plan inventory levels. The latter may also take responsibility for the physical management of inventory from raw material through intermediate levels to product handed over to the finished goods supply chain operation.

However, all businesses need to plan production and inventory and the two cannot be planned independently. Separating them can bring dangers in that key performance indicators in production may well conflict with those in Inventory Control. Production may be driven by utilisation and hence output levels while those targeted with managing inventory will be focussed on minimising the company’s investment.

Procurement/Purchasing
Buyers may be people who place purchase orders – though in many operations this does not require a full-time professional.

As ever, we see different approaches in different sectors. For example, in a business constantly making similar products from similar materials (in, say, the automotive sector), the sourcing process is very distinct from order-placing, which actually falls within the Inventory or Material Planning area.

Where products are made to order, procurement involves everything from receiving a specification of the item to be secured (with target costs and lead times), through to identification of potential suppliers, evaluation of these suppliers, negotiation and order placing.

Quality management
All products require formal processes to guarantee quality. Traditionally, western approaches fell into the category of Quality ‘Control’ – another term for inspection. One of the lessons learned from the Japanese brought the adoption of Quality ‘Assurance’ – quality specialists working with others in the business to approve processes ensuring that customer specifications are met or exceeded. This includes best-practice manufacturing processes, training, and thorough evaluation of suppliers (their plant and processes).

Production management
We can’t forget that we need day-to-day management in the manufacturing area – the shop floor. People need direction and guidance – the traditional role of a foreman and the hierarchy of management above this. Managing people and plant – including all the activities related to maintenance of this plant – remains a core element.

Each business needs a manufacturing strategy, driven by business and market goals and the various elements within Manufacturing must ensure that this strategy is addressed as a team game.

What is changing in the world of manufacturing?

Need for flexibility in response to change and short lead times gets increasingly more demanding. Manufacturing operations need to be ever more agile, which puts demand on the production processes, plants and management. The business processes must support changes to plans, implementing these quickly and economically.

Quality requirements grow ever tighter. Not only must fewer products fall into the category of ‘reject’ but the definition of ‘acceptable’ is increasingly demanding. This requires tighter in-house specifications and manufacturing processes with built-in error-proofing (‘poka-yoke’ in Japanese) as well as the adoption of a culture of total commitment to quality throughout the organisation.

The pressure to reduce costs will always weigh heavily. Each business is in competition with rivals and while there are many factors in addition to cost in the securing of business, we cannot pretend that it is not important. Each area of cost has to be addressed on an ongoing basis, with waste under continuous focus.

New tools and techniques continue to evolve – or, at least, be promoted as if they were new – and professional people working for best practice will continue to be required. The only way that we can maintain our competitive edge is through the best-qualified people coming into manufacturing at the outset of their careers and building their knowledge base through CPD.

‘Lean’ is now the generally accepted term for best practice – the removal of waste in all forms – and ‘Lean’ specialists are highly valued by all. Manufacturing continues to offer an exciting opportunity for the best that our universities and colleges have to offer.

About the Author

  • About Ian Henderson: Ian Henderson is a Partner in MLG Management Consultants (www.mlg.uk.com). After a degree In Statistics & Operational Research and an early career in lines roles in Massey Ferguson he has been in consultancy for over twenty years. In his role in MLG he spreads his time between Lean and ERP consultancy and interim management roles.

Ian Henderson

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