Best of British triumph in exports

"A lot of passion" was what Martin Fitch-Roy, managing director of Dando Drilling believed to be the foundation of his 15-strong firm's success, leading to a 237% overseas sales growth over the three years to June 2002. The company designs, manufactures and sells drilling rigs, mainly to provide clean water in Third World countries. "We have been very busy in Northern Iraq. We are a very old traditional company founded in 1867, but have tried to modernise. Although we are an engineering company, we consider ourselves to now be market-driven rather than engineering-driven. We recognise the need to have a knowledge of different cultures where we sell, and are very careful about how we choose our sales staff. One of our salesmen speaks Farsi, Hindi and Arabic." On management organisation, he explained, "We avoid duplication of effort. We are very specific about areas of responsibility. Marketing markets and salesmen sell. Engineering is still very important. Designs have to be developed more quickly now. We use AutoCAD because it makes it easier to exchange data between our three sites in Littlehampton. We also exchange data with suppliers. We buy a lot of capital equipment and require truck drawings to be e-mailed to us." He summarised the firm's engineering philosophy as, "Appropriate technology. We don't use electronically controlled hydraulics in machines that will be used in Sub-Saharan Africa. We do D more than R. Customers constantly want more powerful and faster machines. It is very important to have new products to offer but it is difficult to take time out come up with something revolutionary. Over a billion people in the world do not have clean water to drink and we see it as our mission to help them obtain it." R&D essential Dr Barlow, technology manager of PerkinElmer Optoelectronics attributed much of his company's success to R&D. And managing director Dr Ian Mackenzie agreed: "We simply couldn't survive without R&D." Part of the much larger US-based PerkinElmer group, the Optoelectronics division in Wokingham makes fibre optic test equipment and increased overseas earnings by 256% over three years, more than doubling its workforce to 65 at the same time. Dr Barlow praised the, "hard work of colleagues and employees, their ability to innovate and their flexibility." He described the firm as a, "completely integrated business including R&D, system assembly/test and world-wide sales groups." The company makes extensive use of enterprise resource planning (ERP) software and CAD but does not use CAM. Instead, final assembly is, "mostly by skilled assembly staff." Metal parts and circuit boards are made by subcontract manufacturers, mostly local, but all files and drawings are still exchanged by e-mail. Barlow described "strategic and personal relationships with suppliers and customers" as particularly crucial. A power for winning Charles Soothill, vice president of Alstom's Power Technology Centre, also saw R&D as crucial to the success of its business, along with forming long-term, close relationships with clients and OEMs and maintaining a high profile in the marketplace. He described the business as, "developing gas turbine technology," and the supply of crucial rotating parts such as turbine discs. "R&D is necessary to differentiate our products. We need to be able to offer improved environmental performance and to anticipate future regulatory and customer needs." The firm supports, "academic research in various leading universities," and employs "six times more engineers than craftsmen." He did comment that, "It is one thing to develop a technology, but it is at least as difficult to put it into production." The company has its own "Private IT networks" and uses video conferencing but does not use a single proprietary software to integrate its business processes. "Things change so fast that if we had a rigid system, it would soon not be suitable," Soothill explained. Pneumatics force path to success Several of the winners had built a successful business on an innovative idea. One such company was Ultra Electronics Precision Air Systems, part of the Ultra Electronics buyout of the former Dowty Electronics Systems Division. The fundamental breakthrough is the development of 350bar air compressors, capable of replacing gas bottles and pyrotechnics in primarily military systems. The firm has 74 employees and has seen exports grow by 183% over three years, mostly to the US. MD Paul Benson described the compressors as being electric motor-driven swashplate pumps, "about the size of a softball" (300mm across). Coming from miniature compressors for thermal imaging systems as a replacement for gas bottles, they have more recently found their way into aircraft wings to launch missiles and other stores. They have to occupy the same space and weigh no more than bottles of compressed nitrogen. "R&D is very crucial," Benson explained. "We put a lot of effort into it and it represents a high percentage of our profits. In aerospace projects, you always have to look at the long picture and think about what you may be selling in ten years' time. Many technical problems had to be overcome in order to develop the compressors, such as finding sliding seals able to survive the high air pressures and temperatures from -50 deg C to 90 deg C." Asked whether the compressors had any civilian use, Benson replied that thermal imaging is extensively used for civilian purposes, but that at a cost of tens of thousands of pounds each, the devices were too expensive for industrial applications. But, a lot of the cost stems from, "meeting the needs of the aerospace environment," and we gathered it might well be possible to make them a lot cheaper if other markets should open up. On the management front, the company is working with the West of England Aerospace Forum and the Society of British Aerospace Constructors on lean aerospace initiatives. Benson added: "The idea is to take the best automotive principles and apply them to aerospace production. We are applying 'Value Stream Mapping' - looking at the way we get equipment from suppliers, and perform inspections and kitting. We are looking at every piece of paper in our process, and deciding which are necessary evils and which are waste." One of the goals is to produce a 'Future State Map' to improve the business process. At this point, Eureka asked if the firm was paperless. Benson smiled at the suggestion and added that, "there is no point in automating wasteful processes using IT." The company does make use of IT in that it 3D models its designs using Pro/Engineer, electronically exchanges designs and uses web invoicing with its US clients. But it does not take part in any electronic bidding process. A light to the future Somewhat smaller, with only 13 staff in the UK (plus six in the US), STG Aerospace in Norfolk has also taken a single initial idea and turned it into a commercial success. CEO Peter Stokes explained, "We design photoluminescent way guidance systems, which we also invented." Energised by light and requiring no electricity, they are 100% reliable and came out of thoughts inspired by the Manchester Air Disaster in 1985. Although the company started in 1986, it only started to develop and market its innovations professionally after 1998. "It was originally a cottage industry, which we had to turn into a commercial business. We will spend 20% of our turnover this year on R&D in order to produce products that will be even safer and save money. CAA and FAA approvals are crucial so we have to be completely on the ball. We have a number of partnerships tied by legal agreement to help develop future products. These include partnerships with industrial designers, an electronics think tank and a plastics technologist." STG makes its own photoluminescent coatings but buys-in mouldings. It assembles and tests new products in-house, "because we have to. We don't want to employ a big labour force. We don't have enough production volume to keep an extrusion machine or a PCB machine fully occupied. "Marketing and outsourcing are crucial. We link to customers such as Boeing and Embraer electronically and they have access to some of our database through linked MRP to deal with lead times, stock levels and order requirements. We are tremendous users of the Internet. We use e-marketing, and have a web site. We find that for a small company selling to the world, e-mail shots are a very good way of getting messages to the right people." Exports grew by nearly 800% over the last four years. Some 50% of exports are to the US and 30% to Europe. STG has a 60% share of the market. Eureka says: Despite all the difficulties, it is still possible to run a world class manufacturing company in the UK and profit, provided that it innovates AND knows how to manage and market Dando Drilling International PerkinElmer Alstom Power Technology Centre Ultra Electronics Precision Air Systems STG Aerospace