Future Manufacturing

© MHA MacIntyre Hudson 2017
Presented by Kate Arnott
MHA MacIntyre Hudson
12 October 2017
Future Manufacturing
MHA Manufacturing Report 2017

• MHA and Manufacturing
• Financial considerations and Business confidence
• Innovation
• Employment
• Exporting
• Looking to the future
Agenda

• MHA Survey, sponsored by Lloyds Bank
• 6th year
• 460+ SME Manufacturers
• Post Election
• Survey now available
MHA Manufacturing Report

• Key sector for MHA
• Sector support:
– Sponsorship of the National Manufacturing Debate
– Strong links with MAS, UKTI, IMechE, Cranfield Centre of
Innovative Manufacturing
– MHA Manufacturing and Engineering survey
– Sponsorship of the Southern Manufacturing 100
• Current initiatives:
– R&D claims
– Capital Allowance reviews
– Apprenticeship Levy assistance
MHA Sector commitment

Business confidence
30%
35% 35%
32%
29%
39%
41%
24%
35%
31%
43%
26%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Negative/No Growth Under 10% growth 10% plus growth
%
How has revenue grown in the last 12 months?
2014
2015
2016
2017

Business confidence
22%
54%
24%
How will revenue grow over the next 12 months? - 2017
Negative/No Growth
Under 10% growth
10% plus growth

• Drivers of growth
– Increased demand
– Expansion of product ranges
– Diversification
• Barriers to growth
– Recruitment issues
– Working capital constraints
– Brexit and tariff uncertainty
Business confidence

Production Costs
26%
49%
34%
71%
36%
75%
47%
75%
42%
77%
45%
60%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Energy prices Raw material prices Component prices Wage costs
What factors will contribute to increased costs of production?
2015
2016
2017

• 92% see Industry 4.0 as an opportunity
• BEIS – Industrial Digitalisation Review
• Support for investment
– Government grant funding
– Innovate UK: Innovate UK Delivery Plan 16/17
– High Value Manufacturing Catapult
• R&D investment – consistent at 88%
• BUT…38% of those investing less than 2%
• R&D claims – 43% still not claiming
• MHA firms saved clients over £15m
Innovation

• 57% expect staff numbers to rise (excluding
apprentices)
• 59% want to take on apprentices
• 75% cannot recruit as needed
• Staff attrition
– The Brexit effect
– Strength of the £
– Reduced orders
Employment

• Why is it such a struggle?
– 62% cite shortage of skilled applicants
– Lack of motivated applicants for lower skilled positions
– Unreasonable salary expectations
– Competition from larger businesses
• Alternative strategies
– Lean manufacturing
– Increased automation
Employment

Exporting
38%
62%
35%
65%
49%
51%
No Yes
2015
2016
2017

• Capital investment
• Strength of order books
• Energy requirements
• Investment in innovation and training
• Manufacturing is still key to the British economy
Looking to the future

www.cranfield.ac.uk
Engineering for Life: new
opportunities
MHA Manufacturing Event
11th October 2017
Professor Rajkumar Roy
Director of Manufacturing

15
Motivation:
product-service systems (PSS)
Availability contracts Total care
Mobility as a Service / Pay as you go

16
A solution:
Through-life Engineering Services (TES)

17
New challenges
• Manufacturers guaranteeing through-
life performance for a fixed price
• Life extension
• Reduce resource consumption and
environmental impact
• Optimise maintenance cost
• Advanced repair and retrofit for
legacy systems
• Functional improvement over time

18
Engineering for Life:
An alternative perspective to
Advanced
Manufacturing

19
Advanced Manufacturing as a
means of;
- Machine life extension
- Through-life performance
Enhancement
- Repair and remanufacturing

20
Advanced Manufacturing
as a means of providing
- Novel materials for
wealth creation
and well-being

21
as a means of providing
- Deployable
and flexible solutions
for rapid response

22
as a means of
- Industrial sustainability
- Waste reduction
- Energy conservation
- Enhancement of society

24
• Energy saving in the Foundry Industry by
Novel Single Shot Melting Process
• CRIMSON
Constrained Rapid Induction Melting
Single Shot Up-casting Process
• Reduced energy, improved quality
Reduced Energy Casting Through-life technology
and management
innovation for industrial
sustainability

25
Novel materials for
wealth creation and
well-being
Bulk Metallic Glasses

26
Agility: Additive
Manufacturing - WAAM
based technology
Deployable and flexible
solutions for rapid
response

27
Enhanced Composites Manufacturing and Repair
Affordable composite
manufacture
Lightweight high
performance composites
Multifunctional/structural
polymer additives
Dissimilar materials and
rapid fastening/joining
Rapid composites repair
Multifunctional materials,
embedded sensors, energy
storage/gen
Structural Monitoring Composite manufacturing costs:
materials and processes

28
Quantitative assessment of the
in-service degradation
Through-life performance:
fatigue, corrosions, cracks
to compound degradations
Future: Corrosion-Fatigue, Fretting-Fatigue, Oxidative-Wear
Through-life technology
and management
innovation for industrial
sustainability

29
Feedback
Design &
Manufacturing
Maintenance Strategy
Planning
Maintenance Scheduling &
Execution
Engineering for
Life
Life Extension
Upgrading
Functionality
Focus: High
Value Products
External Internal
(self -
healing)
Optimise Operational Impact
Maintenance
Task Planning
Inspection,
Monitoring,
Diagnostics
Treatment,
Validation
Evaluation of
Maintenance
Solution
Degradation Mechanism Obsolescence Integrated Planning
Autonomous Maintenance Monitoring/Diagnostics Repair Mechanism
Foundations
Assessment/N Big Data Augmented Reality Remote Maintenance
Self Repair Digital MRO Prognostics Repair Technologies
Technologies
Business
Model
Evolution
IPS2
MRO (for own
platform)
MRO (multi
platform)
Extending life
of legacy
products
Business
Drivers
Functional
Improvement
with Time
Increase
Availability
Optimum
Through-life
Cost
Reduce
Resource
Consumption
Reduce
Environmental
Damage
Data/History/Influenc
e
Contribution/Use
TES
focus

30
Foundations of TES
Degradation
Mechanisms
Repair
Mechanisms
Monitoring,
diagnostics &
prognostics
Autonomous
maintenance
Obsolescence
Integrated
planning

31
Design and manufacturing
parameters effect on the degradation
Design
Parameter
vs
Fatigue
Laser trepan
drilling vs micro
cracks

32
Monitoring, diagnostics and prognostics
• RUL prediction
• Data driven or model based
• Rotating and linear systems
• Uncertainty based modelling
Effect of wear (2nd half) on
vibration energy parameter over
time [Uhlmann et al. (1999)]
[Mori et al. (2008)]

33
Autonomous Maintenance
– self-healing/self-engineering machines
[Frei et al. (2013)]

34
Foundations – key challenges
• Modelling compound degradations: Corrosion-Fatigue,
Fretting-Fatigue, Oxidative-Wear
• Multi-physics modelling of intermittent failure in
electronics
• Enhance reliability and predictability of the system
• Self-healing to improve robustness of components and
systems
• Collaborative robotics for maintenance tasks
• Uncertainty modelling

35
Technologies for TES
• Non Destructive Testing (NDT) for degradation
assessment
• Developments in the repair technologies
• Cleaning technologies
• Remote maintenance
• Prognostics technologies
• Digital MRO
320 x 240

36
Augmented Reality for
maintenance support
Projecting real time health data on
machines
Robustness against different lighting
conditions
Adaptive support for maintenance
tasks
Real time tracking for health
monitoring and to plan maintenance

37
Digital platform of the future
IVHM
TES
Through-life technology and management innovation for industrial
sustainability (productivity improvement)

38
Technological – key challenges
• Lack of technology for compound degradation
assessment
• Lack of technologies for in-situ maintenance and repair
• Cyber-security for remote maintenance
• Access to relevant data, information and knowledge
• Big data and information analytics for maintenance
• Adaptive augmented reality for customised support

39
Future of TES within the Industry 4.0 context

40
IoT contribution to TES
cyberphysical system
big data
analyses
maintenance planning
and scheduling
maintenance
information/
videos
maintenance
assistance/
augmented reality
maintenance findings/videos
statusinformation
workpiece workpiecesworkpieces workpieces
storage
• Remote diagnostics
• Empower the field
service
• Information and data
driven services for
efficiency and quality
gain
• Communication of data
from the IoT sensor
network
• Non-stationary and
nonlinear fault prediction
• Massive data processing

41
Cyber-secure engineering
systems and processes for through-life security
and assurance

42
1st 2nd
3rd
3rd
3rd
Wi-Fi
Bluetooth 4.0
NFC
3rd
ZigBee3rd
4G LTE
Cloud Service
Service company
API
Dashboards
Users Folders
Dashboards
DMG NTX 1000/W
End-User devices
Encryption
Encryption
Attack
Data Out
CPU 50%
Data In
CPU 65%
New communication
New communication
Newcommunication
Attack
PROTOCOL
ID: TRD14908T56

43
Concluding remarks
• Engineering for Life is becoming popular due to the
servitisation of manufacturing across the sectors
• More manufacturers are taking through-life
responsibilities
• Longer life, more reliable and predictable components
and systems will be popular
• Self-engineering systems to increase availability of a
system over time
• Cyber-secure Engineering for through-life security and
assurance will be essential

44
Contact:
Professor Rajkumar Roy
Director of Manufacturing, Cranfield University
E: r.roy@cranfield.ac.uk
T: 01234 758555
Thank You!

45 Presentation title - edit in the Master slide
Hitesh Patel
Thursday 12th October 2017
Introduction to UK
Export Finance:
Making exports happen

46
Click to edit Master title styleOur mission
UKEF’s mission is to ensure that no viable UK export fails for lack of
finance or insurance from the private sector
We help UK exporters:
• Win export contracts by providing attractive financing terms
• Fulfil orders by supporting working capital loans
• Get paid by insuring against buyer default
We work with colleagues in DIT, HMT and other departments in the UK
and overseas to support HM Government’s export aspirations

Click to edit Master title styleAbout UK Export Finance
We:
• Are the UK’s export credit agency
(ECA)
• Were established in 1919 as the
Export Credits Guarantee
Department – the world’s first
ECA
• Support the export of goods,
services and intangibles
• Complement rather than compete
with the private sector
• Operate at no net cost to the
taxpayer – we charge a premium
that covers the risk plus a
contribution to our running costs
• Provide award-winning support for
UK exporters:
• We received the TXF News
Exporters’ Choice Award in 2015
and 2016

Exporter
UKEF
Foreign
Buyer
Guarantee of
repayment
Export Contract
Bonding
Facility
Working
Capital Facility
Bond
Insurance
Export
Contract
Insurance
Buyer
Credit
Supplier
Credit
Direct
Lending
What do we do?
A
Bank
A Bank

49
Click to edit Master title styleEligibility criteria
• Must be an underlying commercial contract between a UK domiciled company (seller)
and an overseas domiciled company (buyer).
• Export contract must include at least 20% UK content, this can be a service, design,
engineering or project management element and which may include some profit.
• UKEF credit risk is on the UK exporter; - we only share in contract-related security.
• No minimum nor maximum contract value nor business size.
• Work closely with banks and or alternative fund and insurance providers.

50
Our products
Letter of Credit
Guarantee Scheme
A guarantee of up to 90% of the
value of a letter of credit to enable UK
exporters to get their letters of credit
confirmed by their bank
Export Insurance Policy
Up to 95% insurance against the risk
of not being paid, either due to
default by the buyer, or due to
specified political, economic or
administrative events
Bond Support Scheme
value of a contract bond (eg. advance
payment guarantees, performance or
warranty bonds) to enable a bank to
issue a bond without requiring as
much of the exporter’s cash as
collateral, or to issue more bonds on
behalf of the exporter
Bond Insurance Policy
Up to 100% insurance against a
demand for payment under a bond,
which is either unfair or caused by
political events
Export Working Capital
Scheme
value of a working capital facility, to
allow a bank to increase its capacity
to lend to a UK exporter
Buyer Credit Guarantees
Provision of guarantees against bank
loans to overseas buyers of UK
exports for up to 85% of the contract
value, enabling the buyer to pay on
extended credit terms, normally of
between 2-10 years in over 40
international and local currencies
Win contracts Fulfil contracts Get paid
Direct Lending Facility
Provision of loans directly (working
with a bank as arranger and agent) to
overseas buyers of UK exports for up
to 85% of the contract value, enabling
the buyer to pay on extended credit
terms, normally of between 2-10
years, in EUR, GBP, USD and YEN
3

51
Click to edit Master title styleBond Support Scheme (‘BSS’)
 Driven by bank to secure support for their customer bonding requirements. Participating
bank issues a contract bond (or indemnifies another bank issuing the bond) for UK
export contract.
 We guarantee up to 80% of the bond if our minimum risk standard is met.
 UKEF credit risk is on the UK exporter; - we only share in contract-related security.
 Flexible as to bond type: tender, performance, advance payment, retention, but not
warranties per se.
 Most popular as easily fits within existing bank products.
 Can be combined with a wider bond and export working capital facility.

52
Click to edit Master title styleExport Working Capital Scheme
• Relates to specific export contracts / buyers
• Guarantee to banks to cover the credit risks of export working capital
facilities
• UKEF guarantees up to 80% risk
• UKEF credit risk is on UK exporter not bank’s fixed and floating charge
• Useful where a UK exporter wins an overseas contract higher in value than
is typical wins more overseas contracts than it has done before
• Minimum 20% UK content
• Maximum loan-to-contract percentage is 75%
• Maximum loan repayment term is 2 years (no minimum)

53
Click to edit Master title styleExport Insurance Policy (‘EXIP’)
• Insures exporter against risk of –
(i) non payment or
(ii) political risk or
(iii) non-performance due to external factors
• All sectors and up to 95% cover
• Can be introduced by broker
• Not for EU / rich OECD markets below 2 year risk horizon
• (except Greece, Israel, South Korea)
• Export contract specific i.e. not whole of turnover business
• Exporter to have attempted to obtain cover private insurer
• The exporter applies to UK Export Finance for cover.

Product Cover
(Up to)
Support
Bond Insurance 100% Support for exporter insurance.
Bond Support 80% Support for bank issued bonding.
Working Capital 80% Support for bank provided working capital.
EXIP 95% Support for exporter contract insurance.
Letter of Credit 95% Support for L/C (performance) risk.
Supplier Credit 85% Support for supplier extending credit to buyer
Buyer Credit 85% Support directly to extend buyer/borrower credit
Direct lending 85% Support for funding/liquidity.
Product Summary

Example: An exporter secures a contract for GBP2,000,000. The
exporter requires an APG of GBP1,000,000, a Performance Bond of
10% (GBP200,000) and working capital of GBP500,000 to perform
the contract.
Facility Total required UKEF Support (80%)
APG 1000,000 800,000
Performance Bond 200,000 160,000
Working Capital 500,000 400,000
Total 1,700,000 1,360,000
Total facility exposure for lender GBP1,700,000 however with UKEF
support exposure is reduced to GBP340,000.
Example of cover

56
Click to edit Master title styleMedium term buyer/borrower financing.
 Buyer and Supplier Credit
 Bank Loans to overseas buyers guaranteed by UKEF
 Up to 85% contract value
 Supplier Credit < GBP5 million
 Buyer Credit > GBP5million
 Direct Lending (3.4)
 Upto 85% contract value
 No fixed upper or lower limits
 5 years+ repayment terms. Fixed interest.
 Panel of 20 banks supporting the initiative

Website & FAQ

Hitesh Patel
Export Finance Adviser – London
UK Export Finance
Tel: +44 (0) 7794 051 934
Email: Hitesh.patel@ukexportfinance.gov.uk
www.ukexportfinance.gov.uk

The Future of Making Things
Senior Industry Manager
Manufacturing Industry Strategy & Marketing
Asif Moghal

Disruptors
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Subtractive

Impacts
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Discover
Company
Background
Current
Systems
Existing
Process
Key Issues
Desired
Outcome
Challenges

Events
Priority updates on management
level events & activities hosted by
the organisations behind the
Future of British Manufacturing
Initiative

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