Productive pilot

West Midlands trial shows huge increase in profits can result from a programme designed to help small engineers boost performance. Andrew Lee reports

A skills and process development scheme for smaller engineering firms is set to expand following successful trials in the West Midlands.

The Productivity and Competitiveness (PAC) programme places expert analysts with engineering or manufacturing companies to help them measure and improve factors such as quality, cost and delivery and boost performance.

By linking training with operational change it aims to create a sustainable increase in productivity and profits rather than a short-term uplift.

PAC is the result of a joint initiative between four Sector Skills Councils (SSCs) with a relevance to the engineering sector. They are Cogent (process and energy), Improve (food manufacturing), Proskills (building and printing) and Semta (science, engineering and manufacturing).

The partners said a pilot PAC programme in the West Midlands had delivered significant benefits to the 14 companies that took part.

After completing the programme, which takes between six and nine months, the firms achieved an average £93,000 increase in profitability, claimed the organisers. The cost to the company of taking part ranges from £3,000 to £5,000.

Areas of potential business improvement targeted under PAC include extra flexibility, more effective use of resources and the potential to meet extra demand.

The analysts measure the participating businesses against key performance indicators and draw up plans for process improvements and skills development that could raise them. Once the plan is in place they go back to reassess the performance indicators and measure the resulting improvement.

Skills development is a key element of the PAC programme, according to the operators of the scheme.

Selected staff at the companies taking part are sent to study for Business Improvements Techniques (B-IT) NVQ qualifications, helping to ensure the changes implemented during the PAC process are sustainable in the longer term.

The existing team of 20 PAC analysts will increase after the success of the West Midlands trial. Semta claimed a significant expansion of the scheme could produce big benefits to the wider engineering and manufacturing economy.

If the performance of the 14 West Midlands business was replicated in 50 companies in each of the English regions, it said the result would be a cumulative £42m sustainable increase in profits and an extra 2,400 B-IT qualified staff.

Philip Whiteman, Semta chief executive, said: ‘Business improvement techniques are an important tool to complete globally and the benefits of PAC are clear, simple and can have a huge impact on your bottom line.’