Shear determination

Written by: Justin Cunningham | Published:

The bleak outlook of the economy is not frightening every manufacturer. Justin Cunningham talks to one company bucking the trend

The pace of the financial downturn accelerated in the first quarter of this year and it shows no sign of easing up. According to the latest survey from the EEF, the manufacturers' organisation, there are a number of indicators hitting record low levels. It is warning that the sector faces a significant squeeze for the rest of the year. And the bad news continues to spread with only a minimal recovery forecast for 2010.

Commenting on the results was EEF chief economist Steve Radley. He says: "There is simply no hiding the fact these figures make grim reading. The past three months have been extremely difficult for manufacturers, with markets at home and abroad showing severe decline."

But, although the automotive sectors fall from grace has been well publicised, other industries, such as aerospace and defence have not been as badly hit. The medical sector too has remained fairly steady. And the food sector is actually flourishing in many areas as the nation apparently comfort eats on a mass scale.

But whatever the trends, companies with long term planning and contracts in place and that have a diverse portfolio of business interests seem less susceptible to the turbulent waves of the financial storm. It may seem obvious, but just a few years ago the popular philosophy of core competencies and streamlining saw many companies opt out of this business safety net.

For many though, particularly those in the engineering and manufacturing sectors, the company balance sheet makes grim reading. However, Shearline Precision Engineering (SPE) believes that there is opportunity for British companies in the current turmoil.

SPE has recently strengthened its engineering capability, and have brought in additional expertise to head up plans to expand its design for manufacture capability.

Design for manufacture is a theme that has been resonating within UK engineering firms for sometime. Although the basic principle is straight forward, in reality it appears to be something that is not practiced as much as it is preached.

The idea is to design for manufacturability. That means designing something so it will have the lowest unit cost possible. Additionally, it aims to iron out potential problems early in the design phase where it is least expensive to fix them.

Parts should be designed so they need the minimum amount of machining or most, if not all, of the machining can be done on a single machine. It is also about removing processes out of operations and, where possible, producing larger single piece parts rather than multi-piece assemblies.

"We believe this approach adds value," says Charles Maltby recently appointed technical and commercial director heading up the design for manufacture facility at Shearline's Cambridgeshire site. "Design for manufacture is a skill that comes in two directions. One is good quality design engineers who know about manufacturing processes and know what to design to make it work.

"But it also comes from having a manufacturing facility that can advise the design guys about how to get cost out a product or how to minimise elements of lead times, and such things, by doing things in a certain way."

Shearline built its reputation as a precision engineering firm. But it has found that it can add a lot of value to its operation by the addition of services, such as design for manufacture and supply chain management.

The company is finding that by acting as a hub, in terms of providing specialist and skilled people and having approved suppliers in place, it is actually seeing firms pulling manufacture work from abroad to get it made by them.

"There is clearly an element of volume triggering when you outsource manufacture to low cost countries," says Maltby. "In most of those regions there is a definite sweet spot. If you have volumes in that area then you will get very good pricing. But, if you fall below those numbers, it suddenly becomes very costly. It is not really a very flexible process."

The weak pound and lower UK sales mean the sweet spot has vanished for many firms that have outsourced abroad. And for UK companies like Shearline it presents an opportunity to take advantage of the situation.

This is making UK manufacturing the most competitive it has been in years for parts, components and products that have previously been destined for China. And this brings many benefits that are not easily quantified.

Especially important in the present climate, it brings flexibility. This is both in terms of manufacturing volumes, but also in the ability to make design changes. It means the design engineers can easily talk with the people making the part and, in most cases, see the operation first hand.

Personal relationships are important in any business, but the migration of manufacture has put cost first and, in many cases, left personal relationships as a luxury that is not necessary.

But input from the manufacturer, especially during the early design phase, can lead to unit cost reductions, and give designers a fresh perspective about optimising products for the process. Close relationships encourage feedback, flow of information and dialogue during the design cycle. And that leads to innovation.

"There are opportunities," says Maltby. "A couple of our existing customers are already pulling work back from overseas into the UK.

"And not just Shearline, but other places have got capability and capacity that can be utilised in these ways and, I'm sure, they would be delighted to do so."
Maltby says that as well as being successful in getting business for parts and components, it is also trying to capitalise on as much business as possible by actually offering an integrated service. This could involve taking components and assembling them with other off-the-shelf parts.

"The total job to the customer has come down if they take in to account there management time with range of suppliers vs. management time with a single supplier," says Maltby. "Understanding what is the bear minimum of what is really needed, how it can move forward, those are the sorts of things that can offer an opportunity. But keeping very much a focus on the overall cost of supplying parts.

"Additionally if we can offer more rapid response to the various customers, speed up the processes, find ways of making things more efficient, all that bodes well for the future when circumstances change or effectively set up more lean. So that has got toThe pace of the financial downturn accelerated in the first quarter of this year and it shows no sign of easing up. According to the latest survey from the EEF, the manufacturers' organisation, there are a number of indicators hitting record low levels. It is warning that the sector faces a significant squeeze for the rest of the year. And the bad news continues to spread with only a minimal recovery forecast for 2010.

Commenting on the results was EEF chief economist Steve Radley. He says: "There is simply no hiding the fact these figures make grim reading. The past three months have been extremely difficult for manufacturers, with markets at home and abroad showing severe decline."

But, although the automotive sectors fall from grace has been well publicised, other industries, such as aerospace and defence have not been as badly hit. The medical sector too has remained fairly steady. And the food sector is actually flourishing in many areas as the nation apparently comfort eats on a mass scale.

But whatever the trends, companies with long term planning and contracts in place and that have a diverse portfolio of business interests seem less susceptible to the turbulent waves of the financial storm. It may seem obvious, but just a few years ago the popular philosophy of core competencies and streamlining saw many companies opt out of this business safety net.

For many though, particularly those in the engineering and manufacturing sectors, the company balance sheet makes grim reading. However, Shearline Precision Engineering (SPE) believes that there is opportunity for British companies in the current turmoil.

SPE has recently strengthened its engineering capability, and have brought in additional expertise to head up plans to expand its design for manufacture capability.

Design for manufacture is a theme that has been resonating within UK engineering firms for sometime. Although the basic principle is straight forward, in reality it appears to be something that is not practiced as much as it is preached.

The idea is to design for manufacturability. That means designing something so it will have the lowest unit cost possible. Additionally, it aims to iron out potential problems early in the design phase where it is least expensive to fix them.

Parts should be designed so they need the minimum amount of machining or most, if not all, of the machining can be done on a single machine. It is also about removing processes out of operations and, where possible, producing larger single piece parts rather than multi-piece assemblies.

"We believe this approach adds value," says Charles Maltby recently appointed technical and commercial director heading up the design for manufacture facility at Shearline's Cambridgeshire site. "Design for manufacture is a skill that comes in two directions. One is good quality design engineers who know about manufacturing processes and know what to design to make it work.

"But it also comes from having a manufacturing facility that can advise the design guys about how to get cost out a product or how to minimise elements of lead times, and such things, by doing things in a certain way."

Shearline built its reputation as a precision engineering firm. But it has found that it can add a lot of value to its operation by the addition of services, such as design for manufacture and supply chain management.

The company is finding that by acting as a hub, in terms of providing specialist and skilled people and having approved suppliers in place, it is actually seeing firms pulling manufacture work from abroad to get it made by them.

"There is clearly an element of volume triggering when you outsource manufacture to low cost countries," says Maltby. "In most of those regions there is a definite sweet spot. If you have volumes in that area then you will get very good pricing. But, if you fall below those numbers, it suddenly becomes very costly. It is not really a very flexible process."

The weak pound and lower UK sales mean the sweet spot has vanished for many firms that have outsourced abroad. And for UK companies like Shearline it presents an opportunity to take advantage of the situation.

This is making UK manufacturing the most competitive it has been in years for parts, components and products that have previously been destined for China. And this brings many benefits that are not easily quantified.

Especially important in the present climate, it brings flexibility. This is both in terms of manufacturing volumes, but also in the ability to make design changes. It means the design engineers can easily talk with the people making the part and, in most cases, see the operation first hand.

Personal relationships are important in any business, but the migration of manufacture has put cost first and, in many cases, left personal relationships as a luxury that is not necessary.

But input from the manufacturer, especially during the early design phase, can lead to unit cost reductions, and give designers a fresh perspective about optimising products for the process. Close relationships encourage feedback, flow of information and dialogue during the design cycle. And that leads to innovation.
"There are opportunities," says Maltby. "A couple of our existing customers are already pulling work back from overseas into the UK.

"And not just Shearline, but other places have got capability and capacity that can be utilised in these ways and, I'm sure, they would be delighted to do so."
Maltby says that as well as being successful in getting business for parts and components, it is also trying to capitalise on as much business as possible by actually offering an integrated service. This could involve taking components and assembling them with other off-the-shelf parts.

"The total job to the customer has come down if they take in to account there management time with range of suppliers vs. management time with a single supplier," says Maltby. "Understanding what is the bear minimum of what is really needed, how it can move forward, those are the sorts of things that can offer an opportunity. But keeping very much a focus on the overall cost of supplying parts.

"Additionally if we can offer more rapid response to the various customers, speed up the processes, find ways of making things more efficient, all that bodes well for the future when circumstances change or effectively set up more lean. So that has g be good."


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