Collinson Grant is a management consulting firm that helps manufacturing clients manage growth. They provide services related to organization, business processes, costs, and people. The document discusses several of Collinson Grant's case studies where they helped clients optimize product management, supply chain management, customer service functions, and organization structure to improve performance and cut costs. It also outlines trends in advanced manufacturing and the importance of capabilities like product management, customer relationship management, and process improvement for companies to capitalize on opportunities and mitigate risks.

1. Managing Growth
Advanced Manufacturing

2. Managing Growth in Advanced Manufacturing
May 2014
Who we are
1
Win new business
Cut costs
Streamline business processes
Manage people
Boost performance and profit
Our objectives remain simple:
To retain a single-minded commitment to
results
To build long-term relationships with our
clients, so that we get to know their
businesses and managers well
To provide value-for-money in everything
we do
We help firms to restructure:
Where we work especially well:
Our wide range of disciplines means that we are
particularly effective at implementing plans for
restructuring and achieving challenging targets
We work with major international corporations, and
medium-sized businesses that make up the FTSE 250

3. Managing Growth in Advanced Manufacturing
May 2014
What we do
Our approach
Collinson Grant focuses on successful performance
We work on
Real
insight
Client’s close
involvement
Pragmatic
approach
Organisation
Acquisition, business integration, restructuring,
organisational design, roles and accountabilities,
and employee relations
Business Process
Business process re-engineering, managing
change programmes, Lean and Six Sigma,
exploiting ERP, and installing business controls
Costs
Direct costs, overheads, supply chain and
operations, working capital, procurement, and
managing complexity and performance
Small teams
Seasoned
consultants
General
managerial
perspective
Economic
Value
2

4. Managing Growth in Advanced Manufacturing
May 2014
Our experience in advanced engineering
3
HAMWORTHY
C O M B U S T I O N

5. Managing Growth in Advanced Manufacturing
May 2014
What’s happening out there …
4
Global demand shifts
to emerging markets:
the next billion
consumers
New demand from
emerging markets
Rising costs and uncertainty in
supply
Energy and transport costs:
global transportation needs are
outstripping investment in
infrastructure
Commodity prices have
risen, driven by demand in
emerging markets
New patterns of demand: more
fragmentation and an
increasing need for
customisation
Changing business models: half of
the value added from capital goods
now comes from related services
New materials:
graphene, carbon fibre
Shift in relative labour costs:
labour costs are rising faster
than productivity in China
In product design: product
lifecycle management systems,
simulation
In production processes:
automation, 3D printing
In information
systems:
‘Industrial
Revolution 4.0’,
‘big data’
New technology

6. Managing Growth in Advanced Manufacturing
May 2014
The facts and forecasts …
5
72% of R&D investment in the UK was in the manufacturing sector(3)
41% of operational improvements over the next three years will come from Big Data analytics(5)
Sources: (1) 2013, McKinsey Global Institute, (2) 2012, HIS Global Insight, (3) 2012, RBS, (4) 2012, the EU, (5) 2012, The Economist Intelligence Unit, (6) 2011, BCG
Developed nations’ share of global manufacturing output fell from 73% in 2000 to(2) 54%
By 2015, the global market for ‘key enabling technologies’ will grow to more than(4) €1tr
The volatility of raw material prices increased in recent years by(1) 50%
55% (up to) of manufacturing jobs in the US are in functions which provide services(1)
By 2015, disposable income in China is expected to grow by(6) 230%

7. Managing Growth in Advanced Manufacturing
May 2014
Three interrelated core capabilities are of paramount importance in seizing
opportunities and mitigating risks
6
Product
management
Customer
relationship
managementProcess
improvement
Open innovation
Cost leadership
Operational
excellence
Organisational
development
Supply chain
management
Customer
services
Leadership
Knowledge
management

8. Managing Growth in Advanced Manufacturing
May 2014
7
Product management
Product
strategy
Product
development
Lifecycle
management
Product
marketing
Product
management
by using the data
available to develop
insight into customers
by understanding
customers’ requirements
and priorities in the
product-service mix
by tailoring the product
offering to specific
markets, spotting high-
value niches and where
customisation can be
profitable
by introducing design-to-
service approaches in
new product development
to sustain revenue
streams through the
lifecycle of products
by actively managing a
portfolio of innovations to
maximize value for the
customer, rather than
over-engineering
by accelerating the
commercialisation of the
innovation process: from
product concept to
product launch
by ‘platforming’,
standardising, and
making product
composition modular,
enabling late
differentiation and
economies of scale
by adopting value-based
pricing strategies
by tackling volatility in
demand through actively
managing product
innovation and lifecycles
rather than simply flexing
production
by investigating the
suitability of alternative
models such as assemble-
to-order or engineer-to-
order
by spotting opportunities
for long-term growth:
technology trends and
new markets
To ensure customer
intimacy
To ensure a return on
investment in R&D
To advocate long-term
strategic needs

9. Managing Growth in Advanced Manufacturing
May 2014
Rolls-Royce operates in highly
competitive markets, providing power
systems for land, sea and air. It
employs more than 40,000 people in
48 countries. We have been working
with senior managers throughout the
business for ten years
The Marine division employs c.2,000
engineers. We carried out a review of
the effectiveness of the product
management function throughout all
its disciplines:
Product marketing and
technology
Product and supply chain
planning
Product architecture and
lifecycle cost
Leadership and management
We found challenges:
divergence of products
balance between innovation and
cost control
blurring of roles and disciplines
approach to reducing the cost of
products
The analysis highlighted a structural
weakness in the way the function was
managed and how it operated
throughout the organisation.
We provided a framework for
clarifying the accountabilities
of product management roles
and optimising use of
resources
resolving the root cause of
deficiencies and optimising
performance
managing innovation
8
Core capabilities: product management (2):
Reviewing the effectiveness of product management

10. Managing Growth in Advanced Manufacturing
May 2014
9
Supply chain management
Supply chain
management
by systematically
conducting make-or-buy
assessments product-by-
product, but also market-
by-market
by using ‘total landed
costs’ in procurement
decisions and considering
intangible factors in the
rating of suppliers to
reflect logistical and/or
political risks
by having contingency
plans in place to swap
critical components and
switch between suppliers
by partnering with
suppliers and service
providers
sharing risks and
rewards
involving them in
design, process
definition and
manufacturing
activities
by ensuring shorter
payback time in capital
investments to facilitate
the migration of
operations
by adopting Efficient
Consumer Response to
ensure responsiveness of
the supply chain to
variations in demand
by tackling complexity,
recognising when it adds
or destroys value
by using all the available
data to develop an insight
into the supply chain (for
example: preventative
maintenance, operational
data monitoring)
by actively monitoring
markets to capture
opportunities created by
volatility in supply
To ensure the
business is agile
To ensure effective
risk management
To focus on value
rather than cost
saving

11. Managing Growth in Advanced Manufacturing
May 2014
With 330 production sites, BASF
employs 97,000 employees
worldwide. BASF Polyurethane
division is
No 1 in Systems – providing
application expertise
No 2 in Basic Products –
where the customer has
application expertise
The financial performance of the
business was aversively affected by
the banking crisis with a 32% fall in
revenue between 2008 and 2009
Collinson Grant was asked to
evaluate opportunities to achieve
sustainable improvements in
profitability in a critical part of the
value chain
The project involved
assessing ‘make-versus-buy’
for some components
reducing complexity in the
product portfolio
reducing overall cost in
logistics
Working jointly with BASF’s task
force, we provided programme and
project management support and
used a structured approach to
develop a Network Optimisation
Model to cover
3,500 systems formulations
131 customer demand areas
15 production sites
The project identified optimisation
options, structural changes, as well
as ways to boost profit and how to
implement them
10
Core capabilities: supply chain management (2)
Optimising the logistics network

12. Managing Growth in Advanced Manufacturing
May 2014
Customer services
11
Customer
services
by understanding how
customers create value;
helping customers to
become more efficient
and involving them in the
NPD process
by understanding
customers’ operations;
helping them to use the
product more effectively
by understanding
customers’ business
models: helping them to
maximise utilisation and
reduce their total cost of
ownership
by ensuring that strategy
is aligned throughout the
organisation
by embedding a culture
of service alongside the
orientation towards
technology
by defining how
customers should be
served
by aligning product
development with
processes for designing
services
by setting up service KPIs
alongside those for
manufacturing and NPD
by allowing the
transformation to spread
along the supply chain
by developing a service
portfolio which integrates
products and services
tightly, using:
subscription models
performance-driven
contracts
software-as-a-service
leasing of assets
by setting up the
appropriate controls for
a stable revenue
stream
monitoring the cost of
the solution over its
entire lifecycle
To enhance customer
intimacy
To transform into a
service-oriented
organisation
To develop an offering
as a ‘total solution
provider’

13. Managing Growth in Advanced Manufacturing
May 2014
Wood Group Gas Turbine Services
(GTS) is an independent provider of
services to maintain, repair and
overhaul gas and steam turbines and
power generators. It also runs power
plants for third parties
Collinson Grant was asked to support
the creation of an ‘affordable,
accountable, agile’ organisation for
GTS by
the application of standard
processes and adoption of
common ways of working
the creation of an integrated
organisational structure
Collinson Grant managed the design
and development of a transformation
of the business in the oil and gas and
energy management markets
The programme entailed work to:
define the business rationale
and business case
define the needs of the
business and its functions; and
to draw maps of the future
processes.
map future roles to fit the work
needed
devise a strategy and
integrated architecture for IS
procure an Enterprise Resource
Planning (ERP) system and
manage an integration partner
Subsequently, the business has
grown by providing customised
solutions throughout the
organisation, at lower cost, to
customers around the world
12
Core capabilities: customer services (2)
Steering organisational change

14. Managing Growth in Advanced Manufacturing
May 2014
Excellence in organisation, process and cost still remains the key enabler
for competitiveness throughout the value chain
13
R & D Supply chain
Production and
order fulfilment
Sales and
Marketing
After-market
Competitive cost structure
Globally integrated organisation
High-performance processes

15. Managing Growth in Advanced Manufacturing
May 2014
14
Enabler: Globally integrated organisation (1)
The business uses
information to:
improve processes,
enhance products
allocate resources
disseminate
knowledge
Integrated systems
reduce the effort required
for extracting,
consolidating and
producing data
It supports the
transparent
communication of
performance
measurements
accountabilities
rewards
It is designed so that
activity is undertaken
at the ‘right level’ in
the organisation
the structure ensures
that accountability for
actions is pushed to
the lowest level
practicable in the
organisation
It supports speedy
decision making, effective
knowledge sharing, and
collaboration between
teams
It retains control of
critical processes,
knowledge, and IP
R&D, manufacturing,
marketing, sales and
service organisations are
globally integrated but
localised
Location should depend
on:
lifecycle costs
(including exit costs)
proximity to demand
(for just-in-time, for
example)
availability of an
established supply
chain and technology
hub
regulations, subsidies,
IP protection, tax
IT-enabled Efficient and effective
Distributed
capabilities
Globally integrated
organisation

16. Managing Growth in Advanced Manufacturing
May 2014
Low & Bonar, a London Stock
Exchange-listed company, is the
world’s largest performance
materials group
Low & Bonar announced a plan to
create a single, scalable organisation
by integrating two European
subsidiaries:
Colbond, based in the
Netherlands and USA
Bonar Fabrics, based in
Belgium and Hungary and
with a joint venture in China
The combined company would be
structured for growth in four
geographic regions (EMEA, NAFTA,
ASIA, LATAM), overlaid by three
global business units (civil
engineering, interior and transport,
building and industry)
Collinson Grant managed a
programme of change designed to
create a single integrated
organisation with common ways of
working. This entailed projects:
to develop the sales and
marketing strategy for global
business units with a
particular focus on routes to
market
to create and put in place a
new organisational structure;
to define the accountabilities
and responsibilities of
individuals; and to develop
ways of working
to highlight any opportunities
to improve processes and
reduce cost arising from the
integration and to evaluate
and mitigate risks
15
Enabler: Globally integrated organisation (2):
Integrating European subsidiaries in a single organisation

17. Managing Growth in Advanced Manufacturing
May 2014
16
Enabler: High-performance processes (1)
High-performance
processes
The productivity gap
between top and bottom
performers can often be
traced back to the
performance of processes
It is vital to adopt a ‘lean
approach’ to minimise
waste in operations:
move the value-
adding steps together
balance the work for
good flow
create scenarios to
deal with variations in
demand
create the capability
for quick changeovers
Standardising business
functions through an SSF
with a set of processes
under a single
organisational structure
can
optimise the skills of
the staff
improve coordination
reduce fragmentation
strengthen
accountabilities
improve effectiveness
establish a platform
for future
improvements
The availability of
consolidated business
data on a global scale
enables the
standardisation and
control of processes with
standardised metrics/KPIs
(Six Sigma, for example)
Different models can be
adopted such as
initial process
development in a lead
factory
dissemination and
roll-out in secondary
factories worldwide
Optimise
Standardise:
Shared Services
Functions (SSF)
Globalise

18. Managing Growth in Advanced Manufacturing
May 2014
Ricardo is a multi-industry
consultancy for engineering and
innovation with 2,300 staff
worldwide
Collinson Grant was asked to point
out opportunities to raise
performance and productivity
to make processes consistent
with good practice
to exploit SAP better
to reduce duplication and
inefficiency in management
to streamline the
organisational structure
Using the Process Activity Analysis
methodology, we reviewed the
indirect work done by the staff in the
UK. We also ran a series of
workshops to map processes and
find opportunities to cut complexity
and waste
Collinson Grant established a list of
19 process improvements which
would save money. In addition to a
detailed specification for the
improvements, the team drew up a
programme of change, including:
an estimate of the cost and
effort of implementation
a schedule for business
change
business controls through a
‘balanced scorecard’ system
By analysing the contributors to each
process, it was found that additional
savings would be possible by
removing complexity from the
organisation
better defining responsibilities
and accountabilities
increasing efficiency in key
functions
17
High-performance processes (2):
Streamlining processes within a complex organisation

19. Managing Growth in Advanced Manufacturing
May 2014
18
Enabler: Competitive cost structure (1)
Competitive cost
structure
Use insights from the
product management and
customer services
functions to compete on
total cost of ownership
rather than purely
product cost
Optimise costs of
portfolios of products by:
complexity reduction
modularisation and
platforms
standardisation of
technology
Adopt target costing and
design-to-value
Revisit the trade-off
between automation and
labour costs, keeping in
mind the need for
flexibility
Benchmark total
production costs rather
than labour costs, taking
into account:
workers’ productivity
transit costs
time-to-market
logistical risks
energy costs
Apply lean principles in all
functions, not just
manufacturing
Increasingly, it is more
important to manage the
productivity of overheads
than of direct labour
Cost-effectiveness starts
in the organisational
design, with:
a flat simple structure
decentralisation
no confusion over
authority or
responsibility
Ensure that the true
drivers of costs are
known and controlled
Ensure that 70-80% of
effort goes into adding
value to products and
services
Optimise
product costs
Optimise
direct costs
Optimise
indirect costs

20. Managing Growth in Advanced Manufacturing
May 2014
Caterpillar ACSD directly employs
6,663 FTEs (of whom 3,936 were in
scope) and generates revenue of
$4.2bn a year
We interviewed managers and
analysed managerial and financial
data. As a result, we found many
working functions in a complex
organisational model:
duplication of effort between
business units, functions, and
integrated project teams (IPTs)
discrete spans of control
a deep structure with too many
layers
too many interfaces
We ran workshops for the senior team
to work out ideas:
to build on the concepts
presented
to challenge 'rules and norms'
to specify initiatives for
improvement
ACSD quickly adopted a new
organisation, resulting in:
better direction and control,
with fewer senior directors and
V-Ps
redefined R&D processes and
organisation at lower costs:
saving $50m
faster, cheaper, and better
cooperation with the customer
19
Enabler: Competitive cost structure (2):
Improving the effectiveness of indirect functions

21. Managing Growth in Advanced Manufacturing
May 2014
Three routes to positioning relevance of core offering
20
Growth
R & D Supply chain
Production & order
fulfilment
Sales & Marketing After-market
Globally
integrated
organisation
Competitive cost
structure
High-performance
processes
Product
management
Supply chain
management
Customer
services

22. 33 St James’s Square London SW1Y 4JS United Kingdom Telephone +44 20 7661 9382 Facsimile +44 20 7661 9400
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Web www.collinsongrant.com www.collinsongranthr.com