Strength in numbers

MAN is an initiative born out of the West Midlands' automotive-focused Accelerate initiative, which is run by regional development agency Advantage West Midlands (www.advantagewm.co.uk). Supported for two years under that initiative, MAN is now self-funded and free to operate outside of the automotive sector. Collectively, the companies employ 600 and have a turnover of around £60 million, with this stretching from 170/£20 million at the top end to 14/£1.2 million at the lower end; average export levels are something over 25 per cent. The subcontractors (see box item) recently took space at both Subcon and MACH, both events held at Birmingham's NEC from 7-11 June, where they unveiled their new brand identity and marketing collateral, while also revealing their biggest order to date, a £10 million contract. In fact, this latest contract about equals what the network has won over its existence so far. The new brand for the MAN network, unveiled at Subcon 2010 Backtracking and explaining the network's history, MAN chairman David Spears (managing director of precision pressing firm C Brandauer) highlights that following the first two years under Accelerate, during which the group was co-ordinated via an external project manager, the group "faltered a bit, because no one wanted to pick up the challenge of managing it". During the third year, it was agreed that management of the group would be shared, with a chairman elected for 12 months, although this is not a strict term. The branding of the group also weakened in the following three years, it is admitted, with this latest initiative intended to rectify that particular failing. The main target of the group is to win business – via exhibition attendance, network member referral and the website, for example - but there are the "softer issues", as Mr Spears describes them, of sharing best practice, sharing customer databases, mentoring and helping each other through difficult times. "Being the managing director of an SME can be lonely. To be able to get together, open up and discuss business issues with other MDs is a powerful tool. You can run ideas past each other, knowing that you're not going to get criticised." These meetings, hosted at MAN member companies, are also the catalysts for another, initially unknown benefit, company inter-trading. "As part of the day, a tour of the factory is made and if any member can make something they see, they get first shot at it. I was at Power Panels recently, looking at all the connectors they buy, which are in the millions. We were told the volumes and what Power Panels was paying – you don't get that sort of information generally, customers want to knock you down all the time. You've got to be at least as good or better, but at least you know what you're up against. Currently, there is a large volume of inter-trading, because some of us have finite capacity and so we go to other MAN members first." The network members - L to R: Gerry Dunne (Westley Engineering); Alan Rollason (Advanced Chemical Etching); Andy Morris (Wrekin Circuits); Rowan Crozier (Brandauer); Tony Hague (PPP Electrical Systems); Sam Osman (Excalibur Engineering); Steve Gaston (FW Cables); Ian Wiles (Advanced Chemical Etching); Tony Sartorious (Alucast); Justin Anstey (Barkley Plastics); David Spears (Brandauer); and Maurice Cassidy (Barkley Plastics). Key in the group's success, highlights Mr Spears, is the fact that the members of MAN are not competitors: "Because of that, the companies are willing to swap business information, share processes and techniques information and promote each others' processes and skills." Following the independence of the group, MAN used the existing branding and marketing materials, including a website (www.man-group.co.uk), attending exhibitions in the UK and Europe (Austria, Switzerland, Germany, for example). Indeed, the group has an exhibition strategy for each year, with the chosen exhibitions suiting most of the companies most of the time, says Mr Spears. "Each company has the chance to nominate its core show and ask the other members to support it. Each exhibition is championed by one of the companies, with it organising everything for the others [barring Subcon/MACH where all attended, presence can be just a single member company]. Some of us already export up to 70 per cent, and Brandauer exports 40 per cent to China, although we don't exhibit in China, because our supply chain is still very much European and USA. We think long and hard about where our customers and project engineers will go to look for suppliers." The annual budget for exhibitions is between £70,000 and £100,000, with the group making use of UKTI funding (www.ukti.gov.uk) to support attendance. And, just as the MAN firms share other information, if one company discovers that support is available from a particular source, this too is shared, says Mr Spears. Brandauer has secured its largest customer via the network and its exhibition attendance, in fact. "We wouldn't have met the people if we hadn't been with MAN; we wouldn't have been in Germany," emphasises Mr Spears, who is unable to name the customer. The network expects to take around 600 enquiries each year, with a conversion rate of 4 – 10 per cent. At each exhibition, the lead company is responsible for collating the enquiries and compiling them into a standard format. This spreadsheet contains details of the enquiry and nominates the lead MAN company. This is distributed within a few days of the show and after that, it's up to each MAN lead company to pursue on behalf of his business. Interestingly enough, the results from each show, regardless of particular sector, are pretty similar, says Mr Spears. For the network as a whole, something around 10 per cent of all business is won through MAN, with Brandauer receiving half of all enquiries through MAN activity, with that reckoned to be typical. Indeed, less and less are the individual companies undertaking stand-alone activities, the MAN chairman reveals. "What MAN hasn't been successful in doing is achieving the original target of winning a large contract that includes all the members," explains Mr Spears. We had some interesting opportunities in the early days, but it became clear that, because MAN is not a single company, if we did win such a contract, the customer would still have 10 individual companies to deal with, as regards invoicing or quality issues, for example. So we changed our approach after the initial two years. What we do find is that there are natural clusters within MAN – Brandauer, ACE and Barkely, for example. So, instead of 10, we find it is two, three or four companies that work together. "We are all selfish MDS, trying to win business for our own businesses. If we win work for MAN, that's an absolute bonus. And the rule is that who ever wins the largest chunk of the contract, project managers the contract." And that work is of a type that includes high technical expertise, too, so that low-cost competitors cannot easily steal it, Mr Spears adds. Having said that, however, an opportunity to involve all 10 companies has now arisen, with a company that spends £13 million each year buying a diverse range of engineered parts. "The customer, a global defence and medical concern, was actually looking to set up a MAN of their own. They contacted be because they wanted precision press work and I introduced MAN to them, which they saw as 'holy grail'," MAN's chairman advises. The result has been the £10 million contract, with the first three companies, ACE, Brandauer and Westley Engineering, expecting be 'qualified' in the coming weeks, with other MAN network companies then following on. The current 10 members of MAN are not, in fact, the same ones that started out five years ago, explains the Mr Spears. Five of them are, but others have left for a variety of reasons. "We have had three companies go in to administration, while others didn't want to put too much in to it. We are comfortable at the current size and with the present mix of disciplines, besides, 10 makes the maths easy," he quips. But there is a long queue of firms that want to join, he notes, but adds: "I couldn't manage a much larger network and do the day job of running Brandauer. That said, each of the MAN members has its own supply chain, so, by default, if we win business, other companies are drawn in and benefit from our success." MAN's success is clear, while it also collectively has over 15 awards for excellence, but is there room for other similar networks? Mr Spears again: "We're a generalist network; I think there's scope for more of that but there's also room for networks focused on renewables, environmental, aerospace and medical work. We could meet up on a monthly basis and share information, as do the MAN members. As long as the companies are non-competing, they'll work." As to why other networks don't yet exist, he suggests that there seems to be resistance in the region, as well as nationally, to take the model forward, but says that he doesn't know why this is. "The manufacturing advisory service supports the model; they support everything we want to do, but you don't see anybody taking the model forward. That said, you would need financial support for the first two years, absolutely. We started with 35 potential members. To go out and talk to all those companies, set up meetings, filter interested parties, start the network and then build on it; that is a job for somebody. No managing director, HR manager or operations manager would have the time or freedom to do that. "The benefits [of a network] are in the future. It was not obvious to us that all of the benefits we now have were there. As the network develops and trust and confidence build, all the softer sides of MAN become really evident and these have been a big part of its success. Even if we decided we didn't want such a grand offer as MAN and didn't want to pursue business opportunities as MAN, it would still stay as a managing directors' network, it is so strong." But business remains the focus for now and future MAN targets are, says Mr Spears, environmental – renewables, LEDs, hydrogen fuel cells and smart metering, plus rail infrastructure. "Interestingly enough, none of us are working in these areas at the moment, so it's very exciting for all of us. When we meet people from these sectors, they don't necessarily understand all our processes, so we can point them in directions they may not have considered. Our technology is easily transferrable to these areas." The medical sector is also seen as a massive opportunity, particularly with the move to disposable instruments that demand automated, cheaper ways of making metal and plastic parts, with this drawing on the approaches that have been used in the telecommunications market for years, it is stressed. As to whether MAN will ever have its own product, Mr Spears offers this: "We entertain entrepreneurs at MAN and are always looking for a product; it is key. Every year, every show, we try to help people with good ideas get into the market. There'll be two or three things going on at the moment. We haven't got there with one of them yet – they fail at the patent stage, or something, but, absolutely, we want a MAN product and MAN has got to be a magnet for entrepreneurs – 10 key processes available , with that magnified by each MAN member's supplier network." Read a previous, earlier story about the network here Box item MAN members 1) Advanced Chemical Etching Location: Telford, Shropshire Products/Services: A world leader in etching and prototype metal forming Sectors Served: Automotive, aerospace, electronics, general engineering, medical, semiconductor and telecom Employees: 36 Turnover: £2.5 million Export: 20 per cent Website: www.ace-uk.net 2) Alucast Location: Wednesbury, Black Country Products/Services: A one-stop manufacturing source of highly technical, full machined sand, gravity and high-pressure aluminium castings with products used for vacuum pump bodies, hydraulics, engine, gearbox, chassis components and brake callipers. Sectors Served: Automotive, commercial vehicle, compressors, general engineering and hydraulic goods. Employees: 115 Turnover: £8 million Export: 15 per cent Website: www.alucast.co.uk 3) Barkley Plastics Location: Birmingham Products/Services: Design, tool making, plastic injection moulding and product assembly Sectors Served: Automotive, electrical, industrial and medical Employees: 90 Turnover: £6 million Export: 30 per cent Website: www.barkley.co.uk 4) Brandauer Precision Pressings Location: Birmingham Products/Services: One of the largest contract presswork and stamping companies in Europe, manufacturing precision metal components for customers around the world. Sectors Served: Aerospace, automotive, consumer electronics, defence, electrical and rail Employees: 55 Turnover: £8.3 million Export: 70 per cent Website: www.brandauer.co.uk 5) Excalibur Engineering Location: Telford, Shropshire Products/Services: Design, manufacture and assembly of high quality, high tolerance sheet-metal fabricated products Sectors served includes: Aerospace, automotive, defence, general engineering rail and signage Employees: 14 Turnover: £1.2 million Export: 10 per cent Website: www.excalibureng.co.uk 6) FW Cables Location: Aston, Birmingham Products/Services: Cable harness assembly, electro-mechanical assembly, aftermarket specialists, ultrasonic cleaning, cable overmoulding and general assembly. Employees: 36 Turnover £2.3 million Export 12% Website: www.fwcables.co.uk 7) Note UK Location: Telford and Gloucester Products/Service: Global provider of electronics manufacturing services Sectors Served: Aerospace, industrial, marine, medical, military and telecoms. Employees: 32 Turnover: £5 million Website: www.note.eu 8) PP Electrical Systems Location, Cheslyn Hay, Walsall Products/Services: Design and build of electrical, electro-mechanical, electronic and electro-pneumatic assemblies and systems. Sectors Served: CNC machine tool, food processing, medical, packaging, power generation, printing, semiconductor and transport Employees: 170 Turnover: £19.6 million Export: 20 per cent Website: www.powerpanelsuk.com 9) Westley Engineering Location: Aston, Birmingham Products/Services: Specialists in small to medium sized precision pressings and press tools for products, including precision machining of one-offs and small batch quantities of precision machined components. Sectors served: Automotive, air conditioning, aerospace and window hardware Employees: 24 Turnover: £2.5 million Export: 18 per cent Website: www.westleyengineering.co.uk 10) Wrekin Circuits Location: Telford, Shropshire Products/Services: World class manufacturer of printed circuit boards and bespoke prototyping Sectors Served: Aerospace, communications, computing, defence, F1, medical, semiconductor Employees: 37 Turnover: £2.5 million Export: 25 per cent Website: www.wrekin-circuits.co.uk First published in abbreviated form in Machinery, July 2010