Andy Page CEO Sharing in Growth UK Ltd

Transcription

1 SC21 Task Force Meeting RAF Cosford November 2013 Andy Page CEO Sharing in Growth UK Ltd

2 Summary The UK Aerospace supply chain has not grown in line with the industry growth The common root causes include; poor productivity; poor sub tier management; weak financial acumen; leaders with an insufficient global mindset Proven improvement processes combined with specific benchmark data to be able to lead a significant change programme The proposal defines a 112M programme, 50M publicly funded, which has the potential to protect or create over 5k jobs. The delivery of the programme would be via a structure bespoke to this programme to ensure agility, prime leadership and state aid compliance

3 Agenda Why Who What Where How

4 1 Why Sharing in Growth? The industry is expected to double in size over the next 10 years There are 3,000 high-tech and high-skill companies with 230,000 employees in the UK that create massive UK economic benefits There is a great opportunity as the total civil aerospace market exceeds $4.5 trillion * Source AGP, further information can be found at

5 Factors to enable growth Technology Skills and Capability Capital and Finance

6 Addressing barriers to growth Competitive Disadvantage UK Supply Chain Sourcing Criteria Root Causes (25%) Cost, Quality & Delivery Productivity Low level of labour productivity Outdated manufacturing processes Competitive advantage Supply Management Weak purchasing / low leverage Non optimal supply chain design (100%) (75%) Financial Acumen Cost modelling Limited financing schemes Relative high capital cost Current UK supply chain cost before SiG Competitive cost level after SiG Strategy Management Capabilities Low managerial skills with limited foresight Lacking entrepreneurial spirit across business

7 2 Who is Sharing in Growth? 50m of allocated funding to pay for high quality training

8 3 What is Sharing in Growth? An in-depth diagnosis leads to a programme of the following elements Increase in productivity and reduction in inventory Development of leadership to overcome the challenges of growth Leadership Development Lean Production System Manufacturing Capability Increases in machinery productivity by reducing cycle times Assessment of strategy development process and financial business planning Strategy & Finance Value Improvement Supply Management Assessment of purchasing, supplier management and supply chain design and execution. Cost optimisation and simulation, assessment of overheads and cost drivers

9 Schedule of activities at the supplier

10 Skills and capability SiG is building on the success of SC21 Sharing in Growth Very intensive, all aspects of business, achieving globally competitive performance From SME into Mid Cap, strategic relationship with customer, selective SC21 Available to everyone, suitable for all but best for SMEs Limited funding, focus on Lean Basics General Education Apprentice support, funded MScs Available to most

11 Objectives of sharing and growth Key measurable outcomes for SiG and the beneficiaries Jobs safeguarded or created Contribution commitment Beneficiary metrics Defined by contract value renewed or won State Aid Compliance Each project is expected to receive > 1m grant value, to which the benefitting supplier must contribute at least equivalent in-kind eligible cost. Operational metric examples Right First Time On-time delivery Value add per person Financial metric examples Aggregate shareholder return Fixed asset and stock turn Net receivable and payable days

12 4 Where does SiG work best? SiG works best with companies that Strive to be globally competitive Have the ambition to grow Aspire to move from good to great SiG offers each business partner a quicker road to sustained and vital improvements. SIG has a proven tool box and methodology to improve your business. Tom Barrett, Sigma Precision Components Ltd

13 5 How to get involved? Key role of the investment board - investment board Publicity Pre-Selection Engage Develop Sustain 1 Expression of Interest evaluation 2 Authority to offer contract to diagnose 3 Launch Diagnostic 4 Authority to offer full contract 5 Supplier Contracted

14 Eligibility criteria 1 UK based Description 2 Aerospace sector 3 Commitment 4 Demand side factors 5 Capability and Competitiveness 6 Commodity Explanation The aim of the Regional Growth Fund (RGF) is to create jobs in England. RGF may be willing to recover funds from other UK development agencies to enable Scottish, Welsh or Northern-Irish suppliers who strongly satisfy other criteria to take part in the programme The aim of the programme is to create UK jobs for the aerospace sector and other related high value manufacturing sectors An individual supplier s improvement programme is expected to be 2M gross value, of which each supplier will need to commit to at least 1M contribution to their programme over 4 years. In order to maximise job creation, suppliers will be judged by their potential to increase sales, with endorsement from a key customer. It is expected that companies will have a current turnover of > 10M to be able to embrace the intensity of training and deliver substantial growth for customers globally. In order for the programme to be successful Suppliers will need to compete globally. The benefitting suppliers will need to demonstrate that the available funds are sufficient to accelerate improvements to deliver globally competitive performance To get most benefit from Rolls-Royce s contribution of global benchmark data, market knowledge and manufacturing method knowledge, the supplier s should be manufacturing a commodity of a type that Rolls-Royce either manufactures or purchases

15 5 How to get involved? 40 companies can benefit 13 signed up to date All expression of interest must be submitted by 13 December Expression of Interest Forms and more detail can be found at The next open invite briefing event is to be held at the National Motorcycle Museum on 5 December 2013

16 Sharing in Growth - 5 Key Points Why The UK supply chain needs to deliver competitive performance to share in the anticipated growth of the Aerospace Industry. Who Sharing in Growth UK Ltd has set up as an independent company specifically to deliver a 110M programme of intensive supplier Development with funding support from The Regional Growth Fund and sponsorship from Rolls-Royce. What Each benefitting supplier will access over 1M of funded training over 4 years to address the specific barriers to growth Where Suppliers who will benefit most from this will be those with ambition to grow, striving to perform competitively. How Expressions of Interest need to be submitted by 13 December

17 Michael Fallon Minister for Business and Enterprise and Minister of State for Energy Business Minister Michael Fallon said: The Sharing in Growth programme underlines the importance of supporting advanced manufacturing and skilled jobs through the Regional Growth Fund. The multi-million pound initiative will protect or create over five thousand jobs and enable the UK aerospace industry to be more competitive on the global stage. "This reflects the Government's commitment to the UK aerospace industry as part of our Industrial Strategy by boosting exports and developing our skills base for a stronger economy."

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