Page 17 - Industrial Technology EXTRA - Brexit Briefing

BREXIT BRIEFING

PM TOLD TO SET Report uncovers losses in

MANUFACTURERS
FREE TO LEAD so-called ‘hidden factories’

THE ECONOMIC A survey of the automotive design productivity. “At Majenta, we work with the
engineering sector has uncovered a UK’s largest car manufacturers, plenty of
RECOVERY systemic phenomenon termed ‘Hidden smaller OEMs and hundreds of tier 1, 2 and
Factories’ responsible for dragging down 3 suppliers,” says Majenta Director, Manish
the industry’s productivity and profitability. Amlani.
A cross party group of MPs and business
leaders has called on the Prime Minister The survey, carried out by Majenta “For more than 20 years, we’ve known
to back manufacturers to lead Britain’s Solutions, points to near-at-hand anecdotally that this interface between OEM
economic recovery from coronavirus. opportunities for OEMs and suppliers to and supplier is the critical juncture and too
They want major infrastructure contracts save money and improve their prospects at much design engineering activity leaks out
to be awarded to British firms to stave off a critical juncture in economic fortunes of from the PLM process at this point, creating
the threat of massive unemployment. the car industry. an unseen, unmeasured and largely
inefficient universe of activity. However, this
The letter’s 20 signatories argued Brexit The phenomenon of a ‘Hidden Factory’ is the first time we have quantified the scale
will see Whitehall more able to target occurs when the formal processes between of the ‘Hidden Factory’ problem and even
procurement spending on UK compan- OEMs and suppliers break down and we are surprised how pervasive it is.”
ies. The letter was signed by MPs engineers revert to informal workflows that
including Labour’s Sarah Champion and sit outside of approved product lifecycle With more design engineers working
Paula Barker. Conservative Peers Lord management (PLM) processes. The remotely, the potential for ‘Hidden Factories’
Dolar Popat and Lord Swinfen backed the quantity, quality and efficacy of interactions to expand to encompass more than 37% of
letter along with more than 10 industry between OEM and supplier that take place automotive engineering productivity has
leaders. in this ‘Hidden Factory’ cannot be increased, but by raising awareness of the
measured, accounted for, or managed – and problem beyond its low level – which the
The coronavirus crisis is set to cost British are easily lost altogether in the event that survey audited at just 30% of the sector – the
manufacturers some £35.7 billion in 2020 staff move jobs or are furloughed. scope to close down informal working
alone. According to Make UK, the practices and recoup a productivity and
pandemic will stunt manufacturing The survey revealed that almost half – some efficiency dividend could not come at a
growth until 2022 at the earliest. Britain’s 43% – of all design engineering workflows better time.
manufacturers employ less than 10 between car manufacturers and suppliers
percent of the workforce yet account for take place outside of approved channels. As “OEMs and suppliers alike are having to
around half of the country’s exports and a consequence, ‘Hidden Factory’ losses deal with unprecedented market volatility
65 percent of the UK’s private sector R&D arise for a myriad of reasons – from design and are searching for solutions to reduce
spending. But Whitehall currently awards submissions using out-dated versions of costs,” Amlani concluded. “The way to close
either directly or indirectly almost a CAD software to engineers without the down these ‘hidden factories’ is for both to
quarter of large public contracts to required training undertaking assignments become more digitally integrated. Majenta
suppliers based outside of the UK. for which they are not sufficiently qualified, offers a cloud-based hub that allows OEMs
or IP breaches due to file sharing using non- and suppliers to collaborate in real-time on
Business leaders say post-Brexit the secure data transfer methods. projects through a single platform.
Government will have much greater
freedom to award contracts to British These ‘Hidden Factory’ outcomes feed into “Not only does this have the potential to
firms free from EU procurement red tape. losses that have become an accepted offer a way to save money but also improve
In March this year Chancellor Rishi Sunak convention in automotive engineering, supplier integration and all the benefits that
announced Whitehall is set to spend including programme delays, increased re- come with it, from reduced design failures
some £600 billion on major infrastructure work and warranty claims, Just-In-Time and warranty costs to enhanced critical path
projects over the next five years. backlogs and the need for project re- alignment across the very complex design
planning. Together, the losses add to billions engineering supply chain.”
The letter called on the Government to of pounds in reduced profitability and www.majentasolutions.com
direct the lion’s share of this spending to
the British manufacturers who collectively
employ some 2.7 million people across
the UK. Heap & Partners Managing
Director David Millar said: “A major
contraction of British manufacturing
output is a development the Government
can ill-afford if it is to secure the UK’s
economic recovery. “Manufacturing pays
more tax and provides more high-skilled
jobs than virtually any other sector. I call
on the Prime Minister to set
manufacturers free to lead Britain’s
economic recovery.”

INDUSTRIAL TECHNOLOGY EXTRA – WINTER 2021 17