Paul Everitt: Productivity is a national challenge
Today the Aerospace Growth Partnership (AGP) is hosting a conference on the future of the industry in every part of the UK – bringing together leading business figures, local enterprise partnerships and the devolved administrations of Scotland, Wales and Northern Ireland.
Speaking at the conference in Leamington Spa, ADS Chief Executive Paul Everitt described productivity as a “national challenge”. While UK aerospace has raised productivity far faster than the average across the economy, supported by important industrial strategy initiatives, he said the industry cannot afford to be complacent and highlighted supply chain productivity and competitiveness as key areas for attention.
Outlining the international factors creating pressures on both large and small companies in the UK aerospace sector, Paul Everitt said:
“The major companies and their supply chains face three broad sets of pressures.
“Firstly their customers, the airlines want new, more fuel efficient aircraft, but they are not prepared to pay a premium for them. So whilst we are seeing production volumes increase, margins, whether you are a prime or in their supply chain, are under pressure.
“Secondly, much of the demand for new aircraft is dominated by airlines in China and south east Asia and alongside this demand is pressure to increase sourcing in these markets. So aircraft and engine manufacturers have to find activity to allocate to these markets.
“Thirdly, many countries recognise and covet the high value, long term jobs associated with the development and manufacture of aerospace products. These countries are actively competing to attract investment and to encourage the relocation of activity, as they seek to build their own domestic industries.”
“To these we can also add the uncertainties of our future trading relationship outside the EU. Collectively they require the UK aerospace supply chain has to make sure it is globally competitive and leading the way in driving productivity improvements.”
The UK aerospace industry has responded to this productivity challenge, developing the SC21 framework for productivity improvement more than a decade ago, and subsequently creating the Sharing in Growth programme.
Celebrating the success of these programmes, Paul Everitt said:
“There are now more than 700 companies engaged with SC21 and more than 120 recognised as award winners, with demonstrably world class performance.
“In 2013 and as part of the original aerospace industrial strategy, industry launched the Sharing in Growth programme. It is a competitiveness transformation programme, giving fast growing small and medium businesses professional support and advice to achieve a step change in competitiveness and productivity.
“The programme has demanding access criteria and requires a very significant financial and time commitment from the business. This is usually in the order of £1m. There are currently around 60 companies engaged in Sharing & Growth and they are seeing direct benefits from the action they have taken.”
For more information about SC21, visit http://www.sc21.org.uk/about/, and for more information on Sharing in Growth, see http://www.sig-uk.org/.
Finally, Paul Everitt set out the importance of a cross-sectoral approach to manufacturing and engineering businesses, saying:
“In developing our approach we have been mindful that other sectors face similar challenges. So we have been working with the automotive, rail and civil nuclear sectors to create an approach suitable for a variety of manufacturing and engineering businesses.
“We have called this the National Manufacturing Competitiveness Levels programme, which allows a range of sector specific skills and improvement activity to be delivered through a common approach.
“Our aim was to make our approach easier for companies to engage with and easier for Governments and LEPs to support. If we can generate sufficient, support and engagement we believe this approach has the potential to make a very direct and positive impact on our national productivity challenge.”
For more information on National Manufacturing Competitiveness Levels, visit https://www.nmcl.co.uk/.