THE FUTURE OF
AUTOMOTIVE
THEBUSINESSDESK.COM SUPPLEMENT | WEST MIDLANDS | APRIL 2015
Opportunities for the
SME Supply Chain
Featuring
Automotive priorities
for new government. 5
Maximising skills for
future success. 10
Is reshoring
the way ahead? 15
in association with
THE FUTURE OF
2
West Midlands Supplement
Editor
Foreword
AUTOMOTIVE
April 2015
Contents
Sponsor forewords:
Chris Barlow, MHA Bloomer Heaven;
Sarah Riding, Irwin Mitchell;
Andy Moss, Lloyds Bank.
3-4
T
HE growth of the automotive
industry during the 20th
century became synonymous with
the fortunes of the West Midlands
economy as a whole.
➔
o much of the success of the region is due to
S
the health of automotive industry that when
that sector sneezes then the whole of the West
Midlands catches a cold.
The next Government.
Policies to support the growth
of the automotive industry
must be a priority.
5
➔
Case study: Cube Precision Engineering.
How investment enabled this start-up to
experience year-on-year growth.
8
➔
Bridging the skills gap.
Skills challenges must be met
if automotive growth is to be
maintained.
Case study: Sertec.
How a ‘grow-your-own’ approach is
sustaining this key supplier.
10
➔
13
➔
Reshoring: The way ahead?
Will firms have to bring more
work in-house to guarantee
business?
15
➔
Case study: Barkley Plastics.
Supplier on course for record turnover
after reshoring success.
17
➔
Round Table: Where are
the growth opportunities?
Can the SME supply chain
meet future demand and is
industry ready to help?
19
Can the SME supply
chain meet the future
demands of the
automotive sector?
This was graphically illustrated a decade ago with the collapse of MG Rover.
A legacy of under-investment and poor product eventually took its toll and
it was left to the efforts of a special taskforce to salvage what was worth
saving. But for many, 2005 sounded the death knell for the Midlands motor
industry.
Still on life support, the industry was dealt a further setback just a few
years later with the onset of global recession. That the industry survived
such unprecedented events is testament to its strength and the resilience of
its supply chain.
Since 2009 there has been investment and expansion on an hitherto
unseen scale as global demand for British-built vehicles has soared. Less
anyone think expansion is solely down to the efforts of one business –
Jaguar Land Rover – think again.
Yes, JLR has been responsible for billions of pounds of new investment and
the creation of thousands of new jobs but then BMW, Ford, Nissan, Honda,
Toyota, Vauxhall and Volkswagen have all illustrated their faith in the
abilities of the UK automotive industry.
Now just weeks away from a General Election and a new Government set
to take office, thoughts are turning to what the future may hold.
Export demand for UK-built cars is faltering because of the situation in the
Eurozone but domestic demand continues to fuel growth – the domestic
market has just witnessed its strongest month this century.
Therefore it will be incumbent on the new Government to ensure this
growth continues.
In doing so it will have to implement measures to support the supply chain
by overcoming skills shortages and determining what levels of financial
support it can inject into development programmes.
➔
TheBusinessDesk.com has joined forces with Lloyds Bank, MHA Bloomer
Heaven and Irwin Mitchell to assess the strength of the automotive supply
chain whether it is capable of meeting future demands.
I hope you find the information useful.
Cornwall House, Lionel Street,
Birmingham B3 1AP.
Duncan Tift, deputy editor,
TheBusinessDesk.com
– West Midlands
Editor: Andy Coyne
[email protected]
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Land of opportunity
3
Sponsor forewords
Automotive success key to economy
THE West Midlands has a proud
manufacturing heritage. Recognised
and respected throughout the world for
its quality and innovation. The success
we have built up in the automotive
sector has been at the core of the
region’s economy for many years, not
only the finished product but the vast
array of component parts designed and
made right here. Today the automotive
industry is still thriving and the recent
resurgence of JLR is a perfect example
of how the innovation and skill base the
region can offer from component parts
to engines is still valued and developing.
At MHA Bloomer Heaven we too are
proud of our long history providing
accountancy and business advisory
services to manufacturers based in
the region. We have advised clients for
over 135 years and during that time
we have particularly supported SME’s
and family owned
businesses navigate
their way through
the opportunities that
arise across markets
whether on the
doorstep or overseas.
Today accountancy
and business
advisory services
are not just about
tax planning
and preparing
spreadsheets filled
with profit and loss analysis. At MHA
Bloomer Heaven we work hard to
provide our manufacturing clients
both within the automotive sector and
beyond with a wide range of services
that we believe not only enhance our
service but offer clients insights and
analysis that helps them make better
decisions for their business.
Chris Barlow
managing
director, MHA
Bloomer
Heaven
We have staged a series of events
entitled “Britain’s Future” with key
partners that not only give clients an
opportunity to hear from industry
experts on key issues facing the sector
but an opportunity to come together
and network and collectively share their
experiences and challenges. ‘All successful manufacturers need to be
innovative and be thinking about the market
requirements of the future.’
All successful manufacturers need
to be innovative and be thinking
about the market requirements of the
future. Experts will point towards the
need for investment in Research and
Development. This can be a challenging
prospect. At MHA Bloomer Heaven we
have a team of experts who help our
clients identify the best way to finance
this vital element in securing their
business growth and can help navigate
them through the complex landscape of
grants and tax breaks that exist.
Many of our manufacturing clients
now see their market opportunity as
a national and in many cases global
one. Times have changed when small
manufacturers could develop successful
businesses on a local marketplace only.
That is why our national association,
MHA, is important. This not only gives
us a national presence but access to
specialists and resources across the UK
and internationally in 130 countries.
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We believe that manufacturers need
a new type of support from their
accountants and business advisors.
It is more than the ability to produce
accounts it is an ability to understand
their business and the opportunities
and challenges they face. It is about
added value whether that is providing
expertise through events or insight
into the R & D landscape. But most
importantly it is about building up trust
and mutual respect- like everything
in life it is about positive and effective
relationships- ensuring we achieve that
will always be our priority.
Supply strength must be maintained
OVER the last couple of decades, the
UK automotive sector has changed
immeasurably. We have moved from
an era of rapid decline in outputs to
a reinvigorated sector with renewed
growth at all tiers and strengthened
supply chain resilience.
Sarah Riding
commercial
partner, Irwin
Mitchell
With a track record of
advising clients in the
sector, Irwin Mitchell
has supported the
automotive sector
through its evolution
and is ideally placed
to provide advice and
support at all levels
of the automotive
supply chain.
Our market knowledge and
understanding of sector specific
issues, coupled with legal expertise
helps our clients strengthen their
position and develop their markets. We
have partnered with clients to move
traditional manufacturing into hi-tech,
IP driven businesses adopting advanced
manufacturing techniques across the
automotive sector and helping them
achieve competitive advantage and their
growth ambitions.
One of the key issues continues to be
building resilience in the automotive
supply chain. Supply chains in the sector
have come under increasing pressure in
recent times with the unstable economic
climate. Supply chains are now more
sophisticated and highly integrated and a
failure at any level can seriously impact
the rest of the chain.
Our commercial and sourcing team
regularly advise on both sourcing
strategy and backshoring arrangements
within the sector. The trend within
the automotive sector has tilted more
and more towards reshoring as
organisations focus more on quality,
lead times and innovation. The advantage
gained by reducing the time from design
to production and the intangible benefit
of the supply chain being close by has
resulted in a huge change in focus from
the offshoring of recent years to local
supply chains flourishing.
both OEM’s and the SME market on
ensuring that supply chains are as
robust as possible, have the flexibility
to adapt to new market conditions and
future proof an organisations’ strategic
objectives. The skills shortage remains
one of the biggest issues in not only
automotive but across the whole of the
manufacturing sector and developing a
more stable supply chain to attract the
strong skills base around it is critical to
developing a successful innovation led
climate to continue the growth of the
automotive industry.
Irwin Mitchell has a long standing
dedicated manufacturing team and
have focussed on recruiting lawyers
with a deep and extensive knowledge
and experience of work in the
manufacturing and automotive sectors.
We aim to provide an extension to clients’
management teams, working alongside,
rather than for our clients, to deliver best
in class advice to our clients.
It is of course important to maintain the
strength of these local supply chains
and our national team regularly advise
Investment vital for future success
THE AUTOMOTIVE sector is showing a
particularly bullish attitude at present,
and has emerged from recession
in remarkably good shape, thanks
in part to a number of Government
initiatives in-line with a wider focus on
supporting manufacturing in the UK.
Andy Moss
head of
manufacturing
- Midlands,
Lloyds Bank
One of the most vital
stimuli has proven to
be the establishment
of the Automotive
Investment
Organisation.
Spearheading
inward investment,
it has generated
£450million in
its first year, 2014,
helping to secure
5,600 jobs.
This creation of employment is helping
to drive the growth of the industry, with
88 per cent of respondents in the first
edition of our ‘Fuelling Growth’ industry
research report - a survey of business
owners, directors and senior managers
– intending to create jobs in the next
two years, with an estimated total of
almost 50,000 new roles.
With great job opportunity within the
sector, of course, comes a requirement
for more skilled workers to fill these
new positions. To address the skills
shortages in the UK automotive
industry, new funding announced by
the Business Secretary, Vince Cable,
back in April 2014 is helping to enhance
supply to meet demand, ensuring that
quality workers are on hand to fill the
newly created roles.
As with all industries, an increase in
overseas trading and exporting remains
vitally important to encouraging
growth within the automotive industry.
Of all the vehicles built in the UK last
year, more than three quarters were
exported to foreign markets, and 74 per
cent of respondents in our survey have
cited further plans to invest in or engage
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with new international customers
within two years.
As the manufacturing industry enjoys
a renaissance as the economic recovery
continues, the automotive sector is
showing a particularly optimistic
attitude. There are many encouraging
statistics in our report, but perhaps the
most promising is the fact that a further
18 per cent average growth over the
next two years has been forecast by
those surveyed.
This, combined with the increased appetite
to recruit and export, highlights that
automotive manufacturing is a genuinely
thriving industry, and the confidence
of leading management figures is
heightening expectation that this will
continue in the coming months.
➔5
Politicians
must sustain
automotive
growth
T
HE massive investment ploughed into the UK automotive
industry in the first quarter of 2015 is further proof – if proof
were needed - of the confidence vehicle manufacturers have in
global demand for their products.
It is also an indication of the level of
confidence they have in the capabilities
of British firms and their workers to
ensure their goals are achieved.
As the first three months drew to a
close more than £1 billion of investment
had been announced – the majority of it
in the West Midlands.
Jaguar Land Rover is to invest £600m
into facilities at its Castle Bromwich
plant for production of the new Jaguar
XF – together with an expansion of its
research and development facilities at
Whitley; London Taxi Company has
confirmed plans for a £250m plant at
Ansty Park in Coventry to build an allnew electric taxi; and Honda is spending
£200m to turn its Swindon plant into
the global production hub of its next
generation Honda Civic.
While this has been done to fulfil
long-term global strategies, the UK is a
principal beneficiary of the investment.
Not that its own car market is a minor
one. In March 2015, 492,774 new cars
were registered in the UK – the single
biggest month this century.
All this is a far cry from the situation
faced by the industry just six years
ago when several manufacturers
were forced to go cap in hand to
the government to ask for funding
support and in an attempt to prop up
flagging markets, the previous Labour
administration introduced a scrappage
scheme to encourage buyers to
purchase new vehicles.
Now, as the UK prepares to usher in
a new government – whatever its
make-up – the politicians manning the
various ministries will be faced with a
radically different industry.
Nevertheless, important decisions will
need to be made in order to determine
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The sustained
growth of the
UK automotive
industry will form
a vitally important
component of the
next government’s
industrial growth
plan – therefore
what policies will
it need to consider
to ensure
that success
continues?
the levels of support required to ensure
the industry continues with its growth.
Trade body, The Society of Motor
Manufacturers and Traders has already
outlined its list of priorities for the new
government.
It said with 402,193 cars rolling off
production lines in the UK during
the first three months of 2015, car
➔
Professor Jon King is Research and
Development Manager for Tata Steel.
He is also responsible for the new R&D
campus at the University of Warwick.
He said there were many opportunities
for growth within his company
provided it could engage more Tier
2 and Tier 3 suppliers. However, he
acknowledged this would not be easy.
As such, successful collaboration with
the government and other industry
bodies will be crucial to achieving this
goal.
production is expected to exceed prerecession levels this year, buoyed by
a strong export market that delivered
revenues of £26.2 billion in 2014.
In terms of industrial strategy therefore,
it said the continued delivery of the
Automotive Sector Strategy through
the Automotive Council was essential if
there was to be continued development
of the industry’s supply chain, skills,
technology and business environment.
With technology - including ultra-low
emission vehicles and connectivity advancing at such a rapid pace, it said
investment in innovation continued to
be a major priority.
Increasing the rate of R&D (research and
development) tax credit and bolstering
funding for long-term initiatives such
as the Advanced Propulsion Centre
will help UK manufacturers lead this
innovation, it adds.
Investment in skills development is
also critical to ensure the UK workforce
has the capabilities to develop and
manufacture the next generation of
technologies.
“There are plenty of opportunities
for suppliers to grow their business.
We have identified there may
conservatively be £2 billion of
opportunities for T2s and 3s in the
supply industry,” he said.
“However, the important thing for many
of these companies is how they tap
this. We need to improve our levels of
communication so we can engage more
of these firms. We have got to move
from the generic to the specific and I
think this will be an important priority
for the new Industry Minister come
June and July.
“We have to convince smaller
companies that if they are ambitious
then they will quickly find the help they
need to grow. For
example, there are
over 140 different
government funding
programmes which
are available to
manufacturers and
this may change
with the new
government but
fundamentally, how
do the individual
companies know
what is best for them.
Professor
Jon King
research and
development
manager, Tata
Steel
“We must end the confusion and make
it easier for firms to identify the help
they need.”
King is also a member of The
Automotive Council (AC), the body
established in 2009 to enhance dialogue
and strengthen co-operation between
the UK government and the automotive
sector. He said the body had been important in
helping to re-establish the industry on
a sound footing and was responsible for
a number of key initiatives that would
secure future growth. As such, he said
future governments should embrace
the role of the council and ensure its
good work was allowed to continue. ➔
‘We have to convince smaller companies that if
they are ambitious then they will quickly find the
help they need to grow.’
The SMMT, in common with many
others, has also underlined the
importance of the UK maintaining its
links with the European Union.
In a recent statement, SMMT
chief executive Mike Hawes said:
“Membership of the European Union
is critical to the UK automotive
industry; the (automotive) sector’s
competitiveness is dependent on
access to the European single market,
integrated supply chains, international
trade agreements, common regulations,
funding for innovation and free
movement of labour.
“SMMT members want to see reform
of the EU with greater emphasis on
industrial competitiveness and better
regulation but believe membership of
the EU remains best for business.”
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He pointed to the work carried out
on the Advanced Propulsion Centre
at the University of Warwick as an
example of how the industry, working
in collaboration with the government
could achieve significant results.
The role of the APC is to position the
UK as a centre of excellence for low
carbon propulsion development and
production.
The automotive industry is ploughing
£500m – matched by the government
– into the new centre so it can research,
develop and commercialise the
technologies for the vehicles of the
future.
Backed by 27 companies in the sector,
including supply chain companies, the
commitment is expected to secure at
least 30,000 jobs currently linked to
producing engines and create many
more in the supply chain.
The work forms part of ‘Driving
Success’ – an industrial strategy for
growth and sustainability in the UK
automotive sector, published jointly by
the government and industry.
Professor Richard Parry-Jones, joint
chair of the AC, said: “Businesses prefer
With the next generation of vehicles
set to be powered by radically different
technologies we need to maintain
this momentum and act now. Our
industrial strategy will ensure we
keep on working together to make our
automotive industry a world leader.”
It would appear highly likely that in
view of the steps already laid, the next
government will look to continue with
this kind of project.
It is an approach that has been
welcomed by the banking sector.
On the strength of the commitment
from the government, the British
Bankers Association established an
automotive forum to enable it to
work with the industry to create new
opportunities for growth both for the
OEMs and the supply chain.
“In turn, this will enable them to go to
the banks and funding organisations
in a stronger position because they can
say with certainty what they need the
financing for and how their growth
strategies are to be achieved.”
The 27 companies backing the APC are:
Bentley, BMW Group, Bosch, BP, Castrol
InnoVentures, Caterpillar, Ford, GKN,
High Value Manufacturing Catapult,
Intelligent Energy, JCB, JLR, Lotus,
MAHLE Powertrain, McLaren, Millbrook
Proving Ground, MIRA, Morgan, Nissan,
Optare, Productiv, RDM Ltd, Ricardo,
SMMT, Tata Motors, Transport Systems
Catapult Ltd, and West Midlands
Rachel Eade, national automotive sector
lead for the Manufacturing Advisory
Service – and a
fellow member of
the AC – said support
opportunities were
available but it wasn’t
just a question of
throwing money
at something in the
Rachel Eade
hope it would sort
national
itself out.
automotive
sector lead,
“Companies at all
Manufacturing
levels look to support Advisory
– recent history has
Service
shown us that – but
it has to be more structured and about
how we cascade these opportunities
down to suppliers,” she said.
‘What we are all waiting to find out is what
the new government will do to help with these
opportunities and to stop work going overseas.’
consistency, stability and a clear path to
the future in order to make investment
plans. Driving Success sets out how
industry will work together with the
government over the next 20 or 30
years. This is critical to sustaining and
growing a thriving UK automotive
sector in a highly competitive global
industry.”
Vince Cable, who was fellow joint-chair
of the AC during his tenure as Business
Secretary, explained the ethos behind
the initiative.
He said: “The UK automotive sector
has been incredibly successful in
recent times, with billions of pounds of
investment and new jobs. This has been
achieved by government and industry
working together.
Manufacturing Consortium Ltd.
“The kind of success envisaged by the
Automotive Council won’t be achieved
overnight – these are 10-year strategies
that are being implemented,” said Prof
King.
“Therefore it is vital that this type of
work be allowed to continue and we
will be asking the next government to
ensure that it does.”
He said the benefits to the supply
chain would be considerable because
the advances being made by the APC
would in turn, provide future growth
opportunities for the firms working
within it.
“We are helping to create the future
business cases for these firms,” he said.
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“We will be looking about how these
programmes can be improved; about
what’s best for suppliers.”
She said if the industry played its part
in feeding back what it needed then
hopefully something constructive
would be done.
“Pre-election we’re in a bit of a famine
as regards grants programmes
but post-election this is likely to be
different because there will be new
programmes, new releases of money,”
said Eade.
“There is now a window of opportunity
to route this support back into the
industry. What we are all waiting to
find out is what the new government
will do to help with these opportunities
and to stop work going overseas.”
Following the purchase of the
machinery, the firm has been able to
speed up its manufacturing process
by 30%. This has enabled it to complete
customer orders at a faster rate and
increase its capacity to take on new
contracts.
➔8
The company, which has a turnover of
around £4m, also has plans to create
additional jobs by expanding still
further over the next six months.
Neil Clifton, [left] with Mark Meakin, relationship
manager at Lloyds Bank Commercial Banking
Case study
“The reduction in cycle times is
Investment enhances
production and creates jobs
ESTABLISHING an engineering firm
in the teeth of the deepest recession in
living memory is a brave step by any
measure.
However, Rowley Regis-based Cube
Precision Engineering is not your
typical business.
Driven by a strong management,
headed by managing director
Neil Clifton, the business, which
manufactures press tools and large
CNC machined parts, has gone from
strength-to-strength and in its short
existence has seen nothing but year-onyear growth.
It quickly recognised that if the business
was to stay competitive in its chosen
supply sectors – automotive, aerospace
and defence – it
needed regular
investment in
order to grow its
capabilities.
Neil Clifton
managing
director, Cube
Precision
Engineering
Clifton, managing director at Cube
Precision Engineering, said: “We
had been experiencing a high
level of demand for our large CNC
machining components and, in order
to fulfil this, we needed to increase
our manufacturing capabilities by
purchasing new machinery.
Recognising that
commitment, the
business has been
backed by Lloyds
Bank, which has
hailed it as a role
model for others to
follow.
The bank stepped in to help the company
in 2013 when it secured a significant
new exporting contract. Cube Precision
used the £200,000 funding facility from
the bank to fulfil its export contract
with German business Westfalia to
manufacture parts for BMW.
When it looked to implement its latest
expansion, the firm again turned to
Lloyds for help.
Clifton told the bank that in order
for the business to grow then it
needed to expand its product range.
It also identified the need to invest
in new machinery to speed up its
manufacturing process in order to meet
demand.
Recognising the firm’s capabilities,
Lloyds Bank Commercial Banking
provided £460,000 of asset finance
to support the purchase of two new
milling machines for cutting large,
complex components.
Additional funding of £115,000 was
secured through the Regional Growth
Fund, which supports businesses
looking to invest in new assets and
create local economic growth. The fact
the firm was able to create four new
jobs was a key factor in it securing the
additional funding.
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significant and this is straight into the
bottom line, meaning these machines
will pay for themselves in a couple of
years.
“The team at Lloyds Bank have played
an instrumental role in helping us make
this investment and we are now able to
manufacture our products at a timelier
rate. Moving forward we plan to pursue
a growth-through-acquisition strategy
by vertically integrating our suppliers
into the business, and we are grateful
for the bank’s support.”
Keith Moore, regional manager at
Lloyds Bank Commercial Finance, said:
“The asset finance facility was an ideal
option for Cube Precision as it allowed
it to purchase new machinery without
putting pressure on its working capital,
giving the business a strong platform to
fulfil its future growth ambitions.”
Mark Meakin, relationship manager at
Lloyds Bank Commercial Banking, said:
“Cube Precision is a well-established
local business in a highly skilled area of
manufacturing, and this investment in
new machinery marks an important
milestone for the business in achieving
its growth plans.”
Made for Manufacturers
MHA Bloomer Heaven’s clients in manufacturing and
engineering benefit from our team’s expertise in the sector.
Our advice enables businesses to produce.
We help by advising on...
Business structure
Bank and financier negotiations,
managing cash flow
Tax initiatives; Research & Development,
Capital Allowances and Patent Box
Accountancy, Audit and Tax Compliance
To find out how we can help your business
contact Chris Barlow, Managing Director & Head of
Manufacturing, MHA Bloomer Heaven
t: 0121 236 0465
e: [email protected]
w: www.mhabloomerheaven.co.uk
➔ 10
Working
hard to bridge
the skills gap
“I
F WE want to keep the work we have and maximise new
opportunities then we have to ensure we develop our skills
base.” These are the words of Rachel Eade, national automotive
sector lead for the Manufacturing Advisory Service and a leading
advocate for skills development.
She said that while the UK automotive
industry was currently experiencing
almost unprecedented growth, with
vehicles being sold in record numbers
around the globe, there was a cloud on
the horizon which threatened to derail
that progress within a very short space
of time – the skills issue.
Rachel Eade
national
automotive
sector lead,
Manufacturing
Advisory
Service
In common with
firms across the
manufacturing
spectrum, many
automotive
suppliers have aging
workforces, a legacy
of needing to retain
skills within the
business.
Sadly for the
industry, as the
recession began to
bite deeper firms were forced to trim
costs from their businesses if they were
to survive and for many this meant to
loss of training programmes – always
considered a short-sighted decision as
when the boom times return then the
business is immediately resource-poor
and ill equipped to meet the challenges
required for growth.
However, this is just one element of the
problem. Attracting young people into
the manufacturing industry as a career
is proving tough, with many teenagers
incorrectly identifying the industry as
a dirty, smelly unrewarding profession
and one unlikely to be much fun.
Many prefer to pursue careers in the
service sector, leaving manufacturing
vulnerable to an ever widening skills gap.
The pattern has been graphically
illustrated within the last few weeks,
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The UK
automotive sector
is experiencing
major success
with its vehicles
being sold in
record numbers
around the
globe, however,
sustaining
success depends
on attracting
new talent to the
industry.
with the Black Country University
Technology College announcing its
closure just four years after opening,
citing an inability to attract teenagers to
pursue its engineering courses.
It was only five years ago that such
institutions were being heralded as the
saviour of the manufacturing sector.
However, if such a facility cannot
attract sufficient pupils from what is,
a manufacturing heartland then the
situation may be worse than many
➔
fear.
“As an industry, we need to improve
our communication skills and show
youngsters that the manufacturing
industry is one that offers a rewarding
career,” said Eade.
already taking on record numbers
of apprentices and graduates, the
phased introduction of new production
programmes would mean further job
opportunities for some time to come.
“We all talk about the need to bring
in young people and upskill existing
workers; we all talk about the need
to bring in skilled people from other
sectors – but the time for talking is over.
We need action… now.
“The investment we have pledged we
haven’t had the full benefit of yet,” he
said.
“We are not alone out there in wanting
skilled labour – the rail industry,
aerospace, oil & gas, the nuclear
industry are all looking to recruit and
so if we don’t attract the future talent
then there are plenty of opportunities
elsewhere – and where will that leave
us?
“We have to become better at promoting
manufacturing in the UK; promoting
the career paths that exist within the
industry.”
Mike
Mychajluk
supply chain
development
manager in
government
programmes,
Jaguar Land
Rover
Mike Mychajluk,
supply chain
development
manager in
government
programmes, Jaguar
Land Rover, said even
within a business of
the size of JLR, skills
were a factor that
could not be ignored.
“Skills are an issue,
there’s no denying
that and so we have
to adopt the right
measures to bridge
the gap,” he said.
“The development of new facilities at
Solihull with the XE and the F-Pace
hasn’t flowed through yet so it hasn’t
formed any part of data studies.”
The company celebrated the launch
of production of the Jaguar XE at
Solihull this month, following a major
investment. The cascade effect from
this will be a significant boost for the
industry and the supply chain but this is
just one element of the company’s latest
growth.
It has also announced a £600m
expansion of production facilities at
Castle Bromwich for the new Jaguar
XF and is set to double the size of its
research and development facilities at
its Coventry base.
Mychajluk said the glamorous profile
enjoyed by the company meant it had
little difficulty attracting apprentices.
However, he said it recognised this
was not the case for the majority of the
industry.
Recognising its unique position to be
a force for good, he said that when
the company went to skills shows or
recruitment fairs then it would often
invite some of its key suppliers to
accompany them to their stand.
He said if people could be educated that
it was often a lot more exciting to work
at some of the supply companies rather
than at JLR itself, where a lot of the work
was just final assembly and project
management then the better that would
be for the industry as a whole.
The company is also investigating
whether it may be possible to initiate
a database of the apprentices which
it does not take on. This could then be
shared with the rest of the industry.
“We get asked by many SMEs what
happens to the apprentices which we
don’t take on,” said Mr Mychjaluk.
“JLR now has two people focussed on
supply chain development and helping
firms meet their skills needs is an
➔
area we are interested in.
‘We have to become better at promoting
manufacturing in the UK; promoting the career
paths that exist within the industry.’
“For us, being part of the EU is a great
benefit because this enables us to pull
in a wealth of skilled labour. If you walk
across the shopfloor at Jaguar Land
Rover then you will hear a variety of
different accents – and with a name like
mine, I should know.
“An issue we have to be wary of is
that the majority of Tier 1 suppliers are
foreign-owned and therefore UK skills
development isn’t that much of an issue
for them.”
With the rapid growth of JLR he said
skills development had to be a priority
for the business and the good thing so
far as the future of the company – and
the wider industry – was concerned
was that much of its latest expansion
had yet to filter through.
Therefore while the company was
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“We are encouraging our suppliers to
visit our plants to show them what goes
on and to help them better understand
their role in our supply chain and how
it benefits our business.”
The willingness to collaborate in such
a way is already proving beneficial to
suppliers such as Sertec (see separate
case study), Automotive Insulations and
Rosti McKechnie.
However, not everyone in the supply
chain is in a position to do this.
Paul Cadman
managing
director, Futura
Design
Paul Cadman,
managing director
of Oldbury-based
Futura Design,
said the approach
his company had
adopted was to create
its own training
academy.
“We run an academy
teaching people to
be modellers, where there is a definite
shortage. We set up the academy
because we want to bring on young
talent. We have about 12 at the moment
– 50% of these have design degrees and
the remaining 50% we have engaged
because of their commitment,” he said.
“The latter can be in work by up to an
hour early. The majority have come
from backgrounds where they have
worked as carpenters or bricklayers
and the like and they have a very strong
work ethic because of that. Sadly that’s
not the case with everyone these days.”
JLR supplier Brose UK is adopting a
similar approach but on a larger scale.
The Coventry company, which supplies
window regulators and rear seating
systems, is investing £3m into a new
academy to ensure its future workers
have the necessary skills in order to
sustain the growth of the business.
This will be important as the company
is committed to a £34m expansion
scheme which will see the development
of a new factory and the creation of
372 new jobs by 2021, with a further
74 generated in the UK supply chain.
A number of the recruits to the
new factory will be apprentices and
graduates.
The expansion is necessary because of
increased product demand from the
likes of JLR.
However, responsibility for skills
development does not rest solely with
the industry.
The coalition government implemented
a series of measures to try and bridge
the skills gap.
One of its last was an initiative in
collaboration with the industry.
Working alongside leading automotive
manufacturers, it injected £11.3m
into a project developed through
the Automotive Council’s Business
Environment and Skills Group.
The project, supported by £16.4m from
the industry, brought together major
automotive businesses to ensure future
skills needs are met for both vehicle
manufacturers and supply chain
companies. It followed a successful bid
from the group for funding through the
government’s Employer Ownership
Pilot.
The then business secretary Vince
Cable said: “This investment puts our
automotive sector in the driving seat
to design the skills our manufacturing
companies need. There is a risk that
without adequate investment in skills,
the industry will run into serious skills
bottlenecks.
“Employment in the automotive
industry is set to grow in the
coming years, with multi-billion
pound investments taking hold and
production volumes on course for
record levels. With developments
such as connectivity and advanced
manufacturing taking the sector into
exciting new territory, recruitment is a
major challenge facing the industry.”
Jo Lopes, chair of the Automotive
Industrial Partnership and head of
technical excellence, Jaguar Land
Rover, said: “The Automotive Industrial
Partnership brings together industry
employers on an unprecedented
scale. By working collaboratively and
taking an innovative and sector-wide
approach, we are ensuring that the UK’s
automotive sector can grow and retain
the skills talent that is so vital for the
industry’s continued success.”
Besides JLR, the other manufacturers
involved in the scheme are Aston
Martin, Bentley, BMW, Ford, General
Motors, GKN, Honda, Nissan and Toyota.
They will work together with the
government, SEMTA and the Society
of Motor Manufacturers and Traders
(SMMT) through the Automotive Council
to boost workforce skills, now and for
the long term.
The strategy includes creating an
industry standard ‘jobs framework’ and
identifying potential employment hot
spots.
Initiatives include:
5 g
iving 4,500 nine-year-olds an
experience of working in the
industry through a one day
production simulation
5 t aking on 960 11 to 16 year-old
as Industrial Cadets, to develop
industry-critical skills in team
working, communications and
problem solving
5 p
roviding a route to work for 225
19-plus year-olds, with a 15-day
bootcamp offering vocational
training and simulated work
activities designed by their potential
future employers. Assessing
functional and employability skills
will lead to further work experience
at a host company, helping young
people with little or no workplace
experience and vocational skills
on a route to possible future
apprenticeships.
The government hopes existing
employees at all levels will also benefit
from the industry collaboration, with
technical, management and leadership
skills all improving.
SMEs will be supported in gaining
access to industry standard skills
development. While talented, qualified
engineers from other professions, such
as the Armed Forces, will also be able to
train to apply their knowledge and skills
in the automotive industry.
The automotive sector will be looking
for similar initiatives from the next
government, whatever its makeup.
‘There is a risk that without adequate
investment in skills, the industry will run
into serious skills bottlenecks.’
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“We have a ‘grow your own’ approach
towards the development of our new
apprentices. We have new, smart
factories and there are still people
walking through the doors that don’t
realise it’s a factory,” he said.
➔ 13
“What we do with the staff is to take
them into JLR so they see how what
they are doing ends up on the finished
vehicle. It’s very rewarding for them
and we thank JLR for their co-operation
on this.”
He said this kind of collaboration was
vital as the industry moved forward
because if OEMs got their suppliers to
share their vision then the supply chain
would work more efficiently.
Chris Pennick, relationship director,
Lloyds Bank Commercial Banking
(left) and Martyn Hughes, group
finance director, Sertec
Case study
Skills development gives
Sertec the edge
BIRMINGHAM-based Sertec is a
global leader in a range of steel
and aluminium manipulation and
assembly processes, including transfer
and progression presswork, tube
manipulation, wire forming, deep
drawing, welded and self-piercing
riveted components.
Established in 1962, the business has
three plants around the West Midlands
and an annual turnover of more than
£130m.
It is a long-standing strategic supplier to
Jaguar Land Rover and supplies every
model in the JLR range. It supplies parts
into the JLR factory in China and has
now been commissioned to supply a
total of 202 parts for the new Jaguar XE.
Martyn
Hughes
group finance
director, Sertec
“The key is communication and sharing
the vision,” said Hughes.
To support the launch
of the XE, Sertec
has invested £15m
in new presses,
robotics and site
upgrades, primarily
to its Tyseley plant.
The XE programme
alone has created 107
new jobs, with an
additional 400 new
workers employed
across the operation to support the
wider JLR business.
Not surprisingly, finding suitable staff
remains an on-going challenge for the
business.
Martyn Hughes, group finance director at
the firm, said with the commitments the
“JLR is good at that. The earlier we can
get production information, details
about volumes etc then the earlier we
can share that with our own suppliers
and implement our own plans.
“Our workers feel empowered because
they are then sharing in Jaguar Land
Rover’s success.”
‘We have a ‘grow your own’
approach towards the development
of our new apprentices.’
company had, it had to have adequately
trained staff to meet its needs and to
ensure it was capable of continuing to
meet challenges in the future.
Much of its strategy is about engaging
staff in the company ethos and also
showing them how what they do is a
crucial element of the finished product
– a strategy which sees it work in
close collaboration with its principal
customer.
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➔ 15
Will reshoring
guarantee growth?
I
DENTIFYING new export opportunities has to be high on the
growth agenda of any company, and when your business
operates in a global sector such as automotive manufacturing
then it becomes of paramount importance.
However, there remain many obstacles
to overcome before a business can
secure new export agreements.
Reputation, trust, quality of goods
and service – all these play a part in
winning those all important contracts.
The rise of high volume, low cost
manufacturing in the emerging
markets of China and elsewhere
sounded the death knell for many of
the West Midlands’ most successful
manufacturers.
Despite producing the best components
available, many lost out to foreign
competition because they were unable
to compete on cost.
OEMs (Original Equipment
Manufacturers) unwilling to pass on
high costs to their consumers opted –
quite sensibly – to protect their bottom
line by utilising cheap imports.
Sure, the quality wasn’t that high but
there was enough volume to minimise
any failures.
For years now, British companies
having been fighting back against the
tide of cheap components flooding into
the UK from the emerging markets and
slowly there is a change in the wind.
Prestige OEMs mindful of the exclusive
nature of their products, are keen to
source only the highest quality parts
and for many that means a more
accountable – and shorter – supply
chain. Preferably one based in the UK.
Within the UK automotive supply chain
many companies are adapting to the
changing needs and by stressing the
quality and availability of their products
are winning back business.
Many are also benefiting from the fact
parts manufactured abroad in so-called
low cost economies are no longer as
cost-effective as they were, with labour
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Securing
growth for many
businesses in the
current economic
climate will often
depend on their
levels of overseas
trade. However,
with more and
more automotive
component firms
being told they
have to reshore
work, what is the
best business
strategy for them
to employ?
and production costs both much higher
than a few years ago.
Birmingham-based Sertec is a major
supplier into Jaguar Land Rover.
Several years ago it purchased a plant
in Estonia in order to secure access to
low cost manufacturing.
However, last year the company
opted to sell off its subsidiary.
➔
Martyn
Hughes
group finance
director, Sertec
Martyn Hughes,
group finance
director at Sertec,
explained the
reasoning behind the
decision.
fortunate that where our facilities are
located we don’t have restrictions on
them so we can happily accommodate
growth but the challenge is to meet
that in a progressive and sustainable
fashion.”
“We have reshored
our product and
we can now supply
it much more
effectively from the
UK,” he said.
Provided firms are willing to be flexible
then the rewards could be considerable.
“We have brought turnover back into
the UK and our opportunities to supply
firms in the Baltic are now better done
from the UK. This has to be a good news
story for the UK.”
Hughes said firms within the supply
chain had to look at the challenges they
were facing and realise they needed to
look beyond the domestic market.
“When you are dealing with an
international company such as JLR
they want you to be supportive in
other environments. We also have new
facilities in China but this is a short term
measure until they can be built locally,”
he said.
The Automotive Council has predicted
component firms stand to benefit from
a £2bn bonanza as UK carmakers enjoy
an unprecedented period of success.
In a report last year, the body assessed
the capacity for the UK to increase the
local supply of components and raw
materials currently sourced from
abroad.
It said successful reshoring would up
the percentage of UK-made components
in British vehicles and create major
new orders for suppliers.
The AC said the £2bn figure came
on top of the £3bn of opportunities
(now revised as being closer to
£4bn) identified the previous year for
component supply direct to vehicle
manufacturers.
‘We have brought turnover back into the UK and
our opportunities to supply firms in the Baltic are
now better done from the UK.’
“In the meantime, there are still parts
that we make here that will never be
made in China because of the cost. We
have a buoyant UK market but as our
customers are growing and develop
a worldwide footprint then we are
increasingly aware that we will have to
service that aspect as well.”
Explaining his own company’s
willingness to be flexible, he said: “We
moved into a new facility in November
2013 and in February 2014 someone
came to me asking if we could have a
third again capacity extension.
“I thought they were joking but in point
of fact they weren’t. Despite making a
move only three months earlier we
knew that if we were to continue to
match the demands of our customers
then we had to have the extra space.
“So, we signed off on that and have not
regretted the decision. Sure, we are
Currently around one third of the
components in a UK-built vehicle are
sourced in the UK. The report said the
realistic aim should be to increase this
local content to around 60% – similar
to other European countries such as
France, Germany, Italy and Spain.
Another key finding to emerge from
the report was that UK automotive
suppliers were – in the main – confident
about their future prospects. Of the
companies surveyed, 80% said they
expected their business to grow in the
near-term.
Due to the continued expansion of the
motor industry, these figures have
changed little.
Dave Allen, purchasing director, Jaguar
Land Rover and chair of the Automotive
Council Supply Chain Group, said: “The
current success of the UK automotive
sector presents a renewed opportunity
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for automotive suppliers to invest in the
UK and to increase local sourcing of the
high value components that the UK’s
world-class vehicle makers require.
“We now have good visibility of the
depth and value of the opportunity
throughout the supply chain, together
with deliverable actions to turn this
opportunity into reality.”
Local research from Business
Birmingham has also suggested an
overwhelming willingness among
automotive companies to bring
production back to the UK.
However, it concluded many
automotive companies were failing
to reshore production because of
engagement issues within the domestic
supply chain.
The research suggested firms continued
to take production abroad due to poor
understanding of the options available
within the domestic supply chain.
Notably, the research found that there
was an ‘information gap’ in the supply
chain, whereby companies were often
unaware of the options available within
the domestic or regional supply chain,
resulting in production being moved
abroad unnecessarily.
Business Birmingham said it
was working hard to address the
issue by implementing a sectorfocused engagement programme
in collaboration with the Greater
Birmingham Local Enterprise
Partnership.
David Shepherd, automotive sector
relationship manager at Business
Birmingham, said: “There is a strong
appetite among automotive companies
to bring production back home to
the UK. But to encourage them to do
that we need to improve the level of
engagement within the supply
➔
chain.”
However, many firms are not in a
position to capitalise, often being restricted
by capacity issues such as insufficient
space within the production operation,
factories which are too small for current
needs or a lack of skilled labour.
Case study
Nevertheless, industry insiders have
said the problem is that unless firms are
willing to embrace change then they
risk losing out to foreign competition
where attitudes are more flexible.
APS Metal Pressings in Birmingham is
typical of the hundreds of SME suppliers
that have reached a pivotal point in
their development insomuch as they
are keen to develop growth but face
restrictions in doing so.
Steve Tinley, commercial manager at
the firm said: “We are a family-run
business and are running at near
capacity. Where we are based, close to a
residential area means we can only run
two shifts.
“The next stage of our development
would be to move to a new site but this
would require as big a leap of faith as
the company has ever experienced.
“All the ducks would need to be in a row
before we could ever commit to such a
move.”
He said the costs involved in such
a move would be severe and could
damage the firm’s competitiveness.
“I’d be reluctant to move on to the next
stage of development. It’s difficult to
remain competitive as it is – I’m already
under pressure to reduce costs as it is and
the risk of having to pass these on to our
customers is simply too high,” he added.
However, there are others that are more
willing to consider change.
Cube Precision Engineering director
Neil Clifton said his firm had only been
established since 2009 and despite
being formed in the teeth of a severe
recession, it had seen nothing but yearon-year growth.
The company has committed to new
investment in machinery and last year
secured £750,000 from Lloyds Bank to
buy two new machines.
“As a result of the investment, the
reduction in cycle times is significant
and this is straight into the bottom line,
meaning these machines will pay for
themselves in a couple of years,” said
Clifton.
[L-R] Peter Tedd, Matt Harwood
and Mark Harwood, all Barkley Plastics
Barkley Plastics on course to
smash £7m turnover target
DURING its 50 years in business,
Birmingham injection mouldings
manufacturer Barkley Plastics has
seen several growth cycles within
the region’s automotive sector.
Basking in the boom of the 60s
and 70s, the firm was one of those
to suffer due to the collapse of MG
Rover in 2005. Nevertheless, it
survived the global recession and
is now benefiting from a successful
reshoring strategy.
When the business was set up
in 1965 by John Barkley - after
he recruited toolmakers Bob
Chittleborough, Bob Fisher, Maurice
Harwood and Tony Challinor – it
was as a result of the need to supply
nearby automotive suppliers.
The quartet initially kept their day
jobs at Lucas, choosing to work the
evening at ‘John Barkley Plastics’,
before a surge in demand from Mini,
Rolls-Royce as well as Lucas made
them all take the plunge and go fulltime.
The firm has come a long way
since those days and its name is
now recognised throughout the
industry for its injection moulding
and toolmaking. Currently it supplies
components to carmakers BMW,
McLaren and Jaguar Land Rover.
Automotive continues to play a major
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part in its turnover, with flashing
beacons and interior components
still made for many carmakers, plus
door handles for JLR and rear lamp
components for Nissan. A current
speciality is light guides, which are
now being introduced in many new
cars to create ambient lighting.
The growth in demand from the
automotive sector business is one of
the main reasons why the company
is now on course to smash the £7m
barrier for the first time in its history.
However, Matt Harwood, business
development manager at the firm,
said there may be some obstacles to
overcome in the future in order to
sustain growth.
“We want to get into more Tier 1s. We
supply BMW and four to five Tier 1s
that supply into JLR,” he said.
“We have had a lot of inquiries from
Tier 1s, some of them wanting a
cash-back bonus before we agree to
supply. This makes it very difficult for
us.”
Nevertheless, Mark Harwood, the
current managing director of the
firm, said: “It’s fantastic that we are on
course to hit a record £7m turnover
in 2015, a great way to mark the
efforts of every member of staff
that has contributed to 50 years of
manufacturing.”
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19
Round
table
Where are
the growth
opportunities?
I
N 2014 UK car production reached a seven-year high with
1,528,148 vehicles rolling off production lines around the
country, with the vast majority destined for export markets
around the globe.
The prediction is that this level of
production is likely to continue,
presenting huge opportunities for
firms that operate within the industry’s
supply chain.
While contracts issued by the
various OEMs (Original Equipment
Manufacturers) run into the billions, not
every firm is in a position to complete
for business.
However, in a boom period for the
industry, should this be the case?
“If you’re not growing your market
share in a successful market then you
aren’t doing enough as a business.”
These are the words of Professor Jon
King, research & development manager
at Tata Steel and also a senior figure on
the Automotive Council.
He said there were typically three
challenges which held back SMEs from
competing successfully for business
from the OEMs or large Tier 1 suppliers.
They are: skills, finance and innovation.
Sometimes the priority order changes
but effectively, these are the main issues
inhibiting most firms from capitalising
on the growth opportunities offered
by the expansion of the UK automotive
industry.
The massive
expansion in the
UK automotive
industry
is offering
numerous growth
opportunities for
SMEs within the
sector supply
chain – but are
all the firms
within it capable
of meeting the
challenges
required. Here we
debate the issue.
“Finance used to be the main issue but
this is less so now, now skills are the
main issue,” said Prof King.
“We are short of around 70,000
engineers in the UK so we do have to
try and address this. There is availability
of finance but to access it you still
have to have a sound business case.
Fortunately, the automotive industry
growth is supplying that business
case for many of these firms but
nevertheless there are still many who
struggle.
“We (the Automotive Council) think
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there are around £3bn of opportunities
the OEMs would like to place in the UK
with the Tier 1s. This represents a big
reshoring opportunity for the supply
chain.
“We estimate that somewhere between
£1 and £2bn of these opportunities have
been taken, we have done an update
➔
on that and partly due to assembly
The
Attendees
Chris Barlow
– managing director, MHA
Bloomer Heaven
Paul Cadman
– managing director,
Futura Design
Neil Clifton
– director, Cube Precision
Engineering
Rachel Eade
– national automotive
sector lead, Manufacturing
Advisory Service
Matt Harwood
– business development
manager, Barkley Plastics
Martyn Hughes
– group finance director,
Sertec
Professor Jon King
– research & development
manager, Tata Steel
Charles Morgan
– former managing
director, Morgan Motor
Company
Andy Moss
– head of manufacturing –
Midlands, Lloyds Bank
volumes increasing, we think the figure
is now closer to £4bn.”
As a result of the growth, many more
firms within the SME community
are looking to take advantage and are
asking how they can tap into those
opportunities.
If the large Tier 1 suppliers get more
business from the OEMs then this
should filter down the supply chain - at
least in principle.
“We (the AC) have identified there may
conservatively be £2bn of opportunities
for Tier 2s and Tier 3s within the supply
industry,” added Prof King.
Within this, King said there was
something like £140m worth of
business for forging companies alone
but this offered just as many problems
as it did opportunities.
He said it was great that such
contracts existed but this was only a
positive provided the firms new of the
opportunities in the first place.
The industry therefore needs to improve
its channels of communication, he
added.
“A lot of the work being offered is very
similar so there are many supply
chain opportunities for small-build
component manufacturers to sell into
larger components and systems –
which is great provided the firms know
how to access the work,” said King.
“We have got to move from the generic
to the specific. This is something we
have started to discuss in the SME
group (of the AC). I think this is also
something likely to occupy the time of
the new Industry Minister come June
and July.”
Mike Mychajluk
– supply chain
development manager in
government programmes,
Jaguar Land Rover
The panel said that while industry had a
responsibility to do all it could, the onus
had to be on the individual businesses to
take control of their own destiny.
Sarah Riding
– commercial partner,
Irwin Mitchell
With car volumes set to rise past two
million in three to four years’ time
depending on global market condition,
the panel said firms not looking to
increase their business in line with this
were doing themselves a disservice.
Steve Tinley
– commercial manager,
APS Metal Pressings
Chaired by
Duncan Tift,
TheBusinessDesk.com
“The growth in volumes has been
significant,” said King. “Doubling
business levels takes a lot of work over
a 10-year period but if firms are not
looking to keep pace with this then
all I will say is that there are plenty
companies that are - and many of these
are outside the UK.
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“There needs to be more bottom up
engagement and we haven’t got that yet.
We (the AC) have to convince smaller
companies that if they are ambitious
then they will quickly find the help they
need to grow.”
Jaguar Land Rover due to its
unprecedented growth is one company
that is looking to both increase levels
of engagement and raise the level of
business it does with UK suppliers.
It has consistently backed the
introduction of new models with a
flood of supply contracts and is keen to
collaborate with its suppliers as much
as possible.
Mike Mychajluk, supply chain
development manager at JLR, said it
was his role to aid suppliers to grow
their business and encourage reshoring.
“We need a successful supply chain in
order to sustain our growth and we
want to get as many suppliers on board
with us as we can, “he said.
“Therefore, we have tried to increase our
levels of engagement in order that we
can show suppliers how they fit into
our overall plans.
“Jaguar Land Rover now has two people
focused on supply chain development.
We want to show them what goes on
and help them understand how the
supply chain works and where they
stand in it.”
It is a model the panel believe should be
adopted throughout the industry.
Birmingham-based Sertec is a major
supplier into JLR and its recent growth
mirrors that of the OEM.
Martyn Hughes, group finance director
at Sertec said while the strength of its
products and service owed much to the
firm’s growth, the willingness of JLR
to readily communicate with the
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business was also a key factor.
The company’s growth was recognised
when Chancellor George Osborne
agreed to officially open the new base.
The funding deal agreed with the Lloyds
Bank Commercial Banking team based
on Colmore Row in Birmingham
included a £7m increase in trade finance
facilities to support Sertec’s exposure to
tool stamping imports from China. The
finance package also included term loan
and asset finance facilities to fund future
capital expenditure projects, and the deal
took the business’ total funding facility
with Lloyds Bank to more than £38m.
“For us the key is good communication,
and always has been. JLR is good at that
and there is no doubt our business has
benefited as a result,” he said.
“The earlier we can get production
information, volumes likely to be
required etc, then the sooner we can
implement our own plans and feed this
down to our suppliers so they can then
put their own plans in place.”
An insight by the OEMs into likely
lifecycles is also beneficial to a
successful supply chain, said Hughes.
“Successful communication shows us
that average product lifecycles are likely
to be somewhere between five to sixyears. It is again critical to us to have this
information because it enables us to plan
our investment strategies,” he added.
“We will know how much money we
are going to need from the banks and
therefore we can go to them with a solid
business plan and outline what we need.
“Fortunately JLR has also got a lot better
at engaging with the financial sector
than it has ever done before so the
banks know that it’s not always us that
is saying what’s needed. It’s all part of a
linked programme.”
In the past five years Sertec has been
able to secure three successful funding
deals in order to facilitate its growth
ambitions.
Rachel Eade, national automotive sector
lead for the Manufacturing Advisory
Service, said collaboration of this kind
was key to the sustained long-term
success of the automotive industry.
However, it was not the only issue
which would lead to a successful
industry.
“Identifying opportunities, successful
reshoring, innovation, good design,
skills development, these are all just as
important as successful collaboration,”
she said.
“Look at the skills base; we all talk about
and hear about the generic engineering
skills gap. We talk about the need to
bring in young people and upskill
existing workers. We also have to bring
in skilled people from other sectors.
“Unfortunately for the automotive sector,
the rail industry, oil and gas, nuclear
are all trying to do the same. We’re all
fishing in the same skills pool. Promoting
manufacturing in the UK will help;
promoting the career paths that are
there. I believe we all have a requirement
and commitment to do that.”
She said it was also a case of not just
throwing money at a problem.
“There are support opportunities
available out there and it’s how we
cascade to those opportunities that will
be important. Companies at all levels
look to support, we all know that. It’s not
just about giving firms money; it’s about
how programmes can be improved.
Pre-election we’re in a bit of a famine as
regards grants programmes but post-
‘Identifying opportunities, successful reshoring,
innovation, good design, skills development,
these are all just as important as successful
collaboration.’
“The key is adding value and creating
jobs. If we want to keep work, develop
work and grow opportunities then
innovation and design and the skills to do
that are integral to winning new work.”
Last year it secured a £20m funding
package to help fund the relocation of its
new head office and investment in new
equipment.
She said there were many external
factors that were likely to weigh on
this. The introduction of new models,
relaunches, the development of weightsaving technologies, new alternative
fuels and low emission vehicles,
connectivity and infotainment systems,
engaging with government support
programmes and developing training
programmes would all have a bearing.
The company needed the additional
space to cope with a big increase in
orders from its principal customer,
Jaguar Land Rover, following its
expansion into China.
“Engaging the supply chain in all of this
will be important as we move forward.
Getting this knowledge to firms and
making them aware of what is needed
will be vital. Therefore, we have to
Part of the success has been due to the
good levels of communication between
the industry and the financial sector.
improve our levels of communication,”
she added.
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election this will be different because
there will be new programmes, new
releases of money.,” she said.
“Therefore we have to put the right
processes in place now, so we can all
move forward later.