The economic downturn, while clearly putting pressure on industrial control and manufacturing businesses, also presents an opportunity. It is when production volume pressures decrease that clear thought can be given to how a company can optimise its manufacturing strategy, enabling it to compete more successfully when recession turns to upturn.
Here, the engineering community has a central role to play. Siemens has had a proud history in UK engineering since the 1872 appointment of William Siemens as the first president of the Institution of Telegraph Engineers, forerunner of the Institution of Engineering and Technology. This gives us an insight into the skills base, innovation and expertise that the community offers. Now is the right time for such talent to come to the fore and the engineer's voice to be heard, particularly in the boardroom.
It could be argued that engineers should be leading the internal company debate when it comes to making the commercial case for investment in industrial equipment to measure and improve processes and methods of production.
The UK shows a significant willingness to invest in IT and other support services, although it seems to be more reticent when it comes to industrial or manufacturing infrastructure. However, the latter could potentially deliver greater material gains in operational efficiency and increase the competitiveness of the UK's manufacturing base.
We lead the world in engineering talent. Now, the natural engineering philosophy of seeking improvement and continuous development needs to become more evident at the right level within businesses. The investment infrastructure decisions will then be based on the delivery of tangible overall benefits, as well as basic purchase cost.
As might be expected in the current climate, some industrial organisations are choosing distinct strategies, such as hasty cost cutting, while others wait and see. Encouragingly, numerous companies across various sectors are taking the opportunity to look beyond their immediate pressures in evaluating how they can use optimisation techniques and technology to aid competitiveness.
Such companies are listening to the engineering viewpoint and are clearly bridging the empirical communication gap between the engineer and the finance director. That's not to say there's an easy answer. Industrial and manufacturing sectors are facing competitive pressures from all sides: changing business, consumer and retailer demands, reduced margins, tougher regulation, commercial consolidation and, more recently, higher utility prices. New challenges have emerged in the downturn, such as changing demand patterns, further operational cost pressures and capital constraints.
A good example of such pressures requiring an 'engineering-led' response lies with companies serving the retail sector. Here, there has been no change in customers' expectations that manufacturers will maintain 100 per cent product availability. This target, set against a background of variable and declining demand, continues to impose considerable challenges at every stage of the production and supply-chain process.
However, in attempting to reduce costs sustainably and improve manufacturing capability, companies face a vicious circle. There is a squeeze on costs and profitability, thanks to market pressures, and a reduction in the general availability of credit. This means that many companies are struggling to allocate sufficient capital funds to invest in major plant refits and automation solutions. Ultimately, this results in a bias towards small-scale efficiency improvement and piecemeal enhancement projects. Almost inevitably, any gains are soon swallowed up by the next wave of the economic storm.
It is possible for companies to invest prudently and still make significant improvements to their manufacturing capability. Engineers bear a responsibility for ensuring that their investment needs are properly understood and are recognised for what they are: the lifelines to future survival and prosperity. Each investment will require a solid credible business case and the 'engineering' advantages must be translated into quantifiable business values.
One example is the continuing emphasis placed on the 'war on waste'. Consequential losses generated through lost product and wasted raw materials can be significant, particularly down the production chain where further value (and cost) has been added. It is essential, therefore, that any waste is clearly identified in the primary process as early as possible. The quicker that any process changes can be reflected back upstream to reduce or eliminate the waste the better. To solve this, companies with an engineering-led strategy are, typically, deploying leaner, cleaner and more efficient processes throughout. Supporting these processes — and providing the essential evidence for the success of the investment — are technological solutions such as manufacturing execution systems, machine vision and tracking systems and integrated process control and visualisation systems to aid plant operators.
With such acute needs to meet scalable production demands, while maintaining quality and safety, two key aims should be business agility and reduced operational costs. Clearly defined, well-presented automation manufacturing strategies, championed by the engineering community, have become more important than ever. Current conditions call for more robust and well-founded decision making and this is one area in which Siemens is working with major companies and their engineering teams to develop a better joint understanding of where technology deployment adds real business value.
The challenges facing the industrial and manufacturing sectors and the increasing complexity of running multi-product, multi-site operations are clear. It is time for engineers to contribute their skills, work with the right suppliers and really promote the strong internal message: how industrial technology can help them make the capital expenditure investment case in their boardrooms.
Brian Holliday is the general manager for industrial automation with Siemens Industry Automation and Drive Technologies