UK manufacturing is alive and kicking, according to Eamonn Walsh, chairman of Brainboxes.  And he should know, as his firm won Manufacturer of the Year in the 2005 European Electronics Industry Awards

There is a theory continually put forward by pundits that manufacturing in the UK is dead - but that is just not true. Manufacturing still has a significant role to play in employment in the UK and is a thriving part of the economy both directly and indirectly.

The traditional image of manufacturing is of heavy industry, such as shipbuilding, but those days are gone and low cost labour has headed to the Far East. Manufacturing has had to reinvent itself, altering the strategy so that either the labour content of the process is low, or proximity to the customer is key and the service element is high.

At Brainboxes the route of producing our own products with high value-add was followed. The firm designs and manufactures what tend to be high value products, so there is great ownership there. And with an automated process labour costs are not significant.

We also have a high service element with technical support and short lead-time delivery. The software component of our PC serial cards is a key part of our offering, yet it costs almost nothing to reproduce once development costs are covered.

To keep our place in the market we adopted the Toyota style of manufacturing -lean manufacturing - which made it the world’s largest and most profitable car manufacturer.

Eamonn Walsh with company managing director Stephen Evans

Lean manufacturing is all about looking at everything from the customer’s perspective - design, manufacture, delivery and support - and then asking “would the customer pay for that?” Lean manufacturing involves eliminating everything that adds unnecessary waste, cost or delay from the customer’s point of view.

In the UK the best-known practitioners of lean manufacturing are supermarkets which have driven down the cost of goods by insisting suppliers use lean methods. The perishable nature of food requires high efficiency in moving products from producer to shelves and I believe that electronics manufacturers can learn from the way supermarkets have evolved processes.

At Brainboxes we asked how we could compete against the low cost economies in the Far East - the only way was to take on lean techniques. Adopting them requires a company lifestyle change.

You have to apply it, re-apply it and then do it again so you drill down to basics. You then re-visit the processes to ensure you are as lean as possible. This applies right through product development, supply chain, manufacturing, administration and distribution with benefits for both company and the customer.

Three years ago we started applying lean techniques to our manufacturing system and reaped benefits in reduced warehouse space, stock turns and changeover times. Then 18 months ago I realised lean principles could be applied more widely across the business and all at Brainboxes have been trained on lean manufacturing and lean office. We then applied what we learnt.

At Brainboxes we always look for the six ‘wastes’ that lean identifies – over processing, inventory, waiting, unnecessary movement, scrap and re-work. Identifying and eliminating these wastes across the whole business reaps benefits and whenever you revisit the process you can remove even more. It is a continual process.

In the UK, we have to learn that even if you have success you cannot afford to rest on your laurels. We have to act with drive and blinkers and assume there is someone else out there trying to get your business. Even when you are number one you still need to put extra space between yourself and the competition.

What we need to do in the UK is implement a mixture of best practices. If you cannot differentiate on cost, then innovate, put in new ideas and win business that way.

Let us kill a myth. Many say it is cheaper to manufacture offshore but forget to build in the cost of flying designers backwards and forwards from the Far East.

One UK manufacturer who moved offshore found that in reality at any one time he had two or three of his highly paid workforce on a plane. Add in the six-week delay from post-production payment to sales revenue because of shipping and you have a heavy cost element. Only for the most high volume, labour intensive products will there be a clear cost advantage in offshore manufacture.

To survive today, a manufacturer has to be competitive in a global market and at Brainboxes we currently export over 50 per cent of our products to Europe and the US. We believe there are even more opportunities for expansion into these areas.

When we visit a large computer manufacturer they are looking for the best product at the best price with no concern where it is made. They will not pay twice the price for UK manufacture. They want guarantees of quality. They also want to know that when they come back for more in a year’s time the price they pay will have reduced.

Without modern techniques UK manufacturing will not survive. Ultimately public service jobs will not solve employment needs in this or any country. Wealth has to be created and manufacturing innovative goods is a great and well-proven way forward. Manufacturing and exporting has a positive effect on the balance of payments - preventing the cost of imports and generating foreign revenue.

At Brainboxes we have been manufacturing for 22 years so far and we believe that the way we work will keep us there. If we adopt the best practice of lean manufacturing methods and apply them to all manufacturing in the UK, electronics or otherwise, then the industry will be transformed for the good. Unreformed manufacturing will fall by the wayside.

Eamonn Walsh is chairman and technical director of Brainboxes