The SBAC is challenging UK aerospace to be more competitive.
Forbes Mutch/LONDON
THE LIGHTS are dimmed and a hundred figures settle back expectantly in their chairs. A message is illuminated on the screen above their heads: "Where there is no vision, the people perish."
It is a quote from the Bible (Proverbs, 28:18), but this is not a religious convention. This is the opening session of a trade-association seminar designed to sharpen an industry. It is the Society of British Aerospace Companies (SBAC) introducing a meeting of its Competitiveness Challenge.
The seminar, staged in a university lecture theatre, continues with a series of keenly focused presentations by speakers from aerospace and other branches of manufacturing industry. It lasts all day, includes an informal lunch and is described by one delegate as "thought-provoking and instructive".
It is not the first, nor will it be the last. It is one of a series planned for 1995 and beyond - a series, in the words of SBAC director Sir Barry Duxbury, aimed at "...delivering a vision for the future of the UK's aerospace industry". It is also a way of providing practical support for a wider and farther-reaching campaign.
By the end of 1992, aerospace in the UK was in a slump, which looked like continuing unabated. From a peak of £11.7 billion ($18.5 billion) in 1989, the collective annual turnover of the nation's civil and military aerospace companies had dropped to £10.47 billion. Employment, too, was dropping - from 250,000 workers in the mid-1980s to just 149,725 in 1992. In the following year, the figure dropped a further 10% to 134,500.
Rationalisation may have its benefits, but complete erosion is to be avoided. The SBAC decided it was time to put the brake on decline and so, in 1993, it drew up what became known as the "Strategy Initiative".
The objectives of the Strategy Initiative were, and remain, to "...improve the competitiveness of the industry in the widest sense by providing a catalyst for change; to enable the industry to speak with one voice and to assist the Government to concentrate on priority areas where it needs to support the industry".
It was essentially the brainchild of Roy McNulty, president of Northern Ireland's Bombardier subsidiary Short Brothers, during his year as president of the SBAC, 1993-4.
"The Initiative really all began in this office in June 1993," said Duxbury, speaking at the SBAC's headquarters in central London. He described how McNulty was discussing the priorities for his term of office and, when Duxbury proffered "...a marked improvement in the lobbying process", McNulty said that it was not enough, and suggested instead that the society "...try and develop a vision for the industry". From that conversation a proactive programme grew.
IN THE BEGINNING
The campaign kicked off with a fact-finding exercise among SBAC member companies. "We wanted to be absolutely sure that we understood the industry: what it was, how good it was and what the general concerns were," Duxbury says. "We also wanted to develop a better collective understanding of the global environment in which we had to compete."
David Marshall, director of business development at Rolls-Royce and an SBAC Council member, says that the survey did not involve consultants, but people from the industry itself. "That gave us a very good perspective," he says.
The research resulted in the first Strategy Initiative report, which became known as the Strategy Document and was reviewed by the SBAC Council in June 1994. Out of that review emerged the Competitiveness Challenge, launched in December 1994 and still running.
The purpose of the Challenge is to provide practical solutions to the problems facing the industry by "addressing the key success factors". This is being achieved through a package of activities which includes workshops, study teams, self-assessment and benchmarking exercises and, of course, the seminars.
These have focused, in the short term, on skills, technology and relationships within the industry. The sessions have been specific, looking, for example, at procurement, inventory reduction, environmental protection and business-process re-engineering (improving critical processes). In the longer term, the programme will look at collaboration between companies, marketing, financing and Government support.
More than 170 companies have subscribed to the challenge and more are enrolling. Most are SBAC members, although, non-members are being encouraged to become involved, particularly as, says Marshall, there are probably 1,000 companies in the UK contributing to aerospace.
NOTABLE SUCCESS
Duxbury is "absolutely delighted" with the way that the Strategy Initiative and the first 12 months of the Challenge have gone. Among the most notable successes, he believes, is the improving relationship between industry and Government. In particular, as a result of the Strategy Document, which defined the industry's problems, he now sees a better framework for industry to lobby Government departments. Progress has already been made in the area of Ministry of Defence procurement, he says.
Working in parallel with other trade associations, the Government has taken its own initiatives to boost the country's industrial-manufacturing base. Following publication of a 1993 White Paper, Realising our Potential, the Department of Trade and Industry (DTI), under the ministerial leadership of Michael Heseltine, the then Board of Trade President, pushed ahead with a programme called "Technology Foresight".
According to the DTI, this campaign, which is still being pursued, "...brings together industry, academia and the Government to consider how the UK can take advantage of market and technology opportunities".
The programme is being driven forward by 16 independent technology panels covering all sectors of industry, from chemicals to food and drink, from agriculture to transport. The Defence and Aerospace panel, is chaired by SBAC Council member, Tony Edwards, chairman of Messier Dowty Aerospace.
Duxbury says that the DTI has supported the SBAC Strategy Initiative by seconding personnel to the Competitiveness Challenge and placing other resources at the society's disposal. In economic terms, this equates to something like £500,000, although Duxbury is quick to point out that the SBAC has matched this investment.
The SBAC won the Heseltine Benchmarking Challenge in 1993, with a prize of £50,000 going to the society's Engineering and Manufacturing Committee as an aid to the introduction of modern benchmarking principles within member companies.
This has led to the formation of an SBAC Benchmarking Unit, manned by two people seconded from member companies and forming the backbone of a permanent benchmarking project at Warwick University in the West Midlands.
Marshall says that the DTI places great emphasis on benchmarking and has presented the SBAC's work as an example for other industries. This, says Marshall, has helped put aerospace "back on the map in Whitehall". He explains: "You have to remember that we entered a phase in the mid-1980s when people began to say that manufacturing didn't matter in this country any more. We now have to reinforce the belief that a manufacturing base does matter, and that aerospace is very much a part of it."
The next phase of the Strategy Initiative is expected to concentrate on technology. Marshall says that technology development is like an escalator: "If you step off it, the escalator keeps on moving; and when you step back on to it, you find that you're definitely not in the same place as when you stepped off."
On the basis of the SBAC's involvement in Technology Foresight, Marshall says that industry would also like to see a move towards a technology-demonstrator programme in the UK, where a model, or models, of products under development could be used in displays to industry partners, financiers and customers.
"It is also important these days that you don't just demonstrate the product and how it works, but how you are going to manufacture it as well," says Marshall. "The only way you can achieve low-cost production is to concurrently design the manufacturing process along with the actual components."
Designing the manufacturing process leads to another area under the Challenge microscope - the supply chain. This has already been the subject of one of the seminars, but it is likely to be revisited. Marshall says: "When you design the manufacturing process, you discover that the prime contractor makes only 20-30% of the product. Prime contractors rely on a long supply chain to make the project work."
AREA OF DISQUIET
The survey conducted at the start of the Strategic Initiative identified this as an area causing some disquiet in the industry. According to Duxbury, the problem of subcontracting has always been dealt, with by the prime contractor, to the benefit of the prime contractor. Now there needs to be more two-way dialogue between supplier and contractor, and this has been encouraged by the SBAC. Much can be learned from other manufacturing industries, and the future direction of the SBAC's drive will see greater liaison with companies outside the immediate sphere of aerospace. According to Marshall, the UK Society of Motor Manufacturers and Traders has already assisted with a scheme for company self- assessment, which has been developed as part of the benchmarking exercise.
The success of the challenge, is best described by the SBAC members involved. In the early days, Tony Palmer, sales manager of IEP Doncasters, which manufactures ring forgings, commented: "Our business depends on the success of the aerospace industry as a whole. Put simply, we joined the Challenge to protect our future."
The full effects of the campaign have yet to be felt, but one thing is certain - a mechanism for that protection is firmly in place.
Source: Flight International