UK-based small and medium enterprise companies (SMEs) in the automotive industry have received a significant boost following the launch of a support initiative by a joint venture of universities and Derby City Council.
Called the Enscite programme, the initiative is designed to offer expert opinion and support to SMEs providing access to detailed information about OEMs and business opportunities within transport engineering supply chains. The initiative will also target the aerospace and rail industries.
At a launch event held at the Roundhouse building in Derby on April 10, attended by leading SMEs and OEMs, Patrick McLoughlin, secretary of state for transport, cited Rolls Royce, Toyota and JCB as recent UK success stories, and called on other OEMs to utilise the services provided by SMEs.
“We are very much aware of how much big companies feed on so many smaller companies that supply them,” he said, highlighting Mini’s Oxford assembly plant, which exports finished vehicles to “over a hundred countries around the world, as an example.
The move will have large repercussions for the UK automotive logistics supply chain, given the increased awareness of SME’s importance in the wider logistics environment. Business growth workshops are free to SMEs based in the East Midlands region of the UK, and are fully funded by ERDF and Derby City Council.
The event highlighted the importance of long-term partnerships between UK businesses. Participants also discussed the need for a good understanding of services offered and the development of individual action plans for companies committed to improvement.
“It’s a fantastic time to be doing what we’re doing,” said Colin McKinnon, managing director, Enscite. “Manufacturing is on the up. We’re seeing economic recovery, and a drive towards reshoring activity. This creates a great opportunity for small businesses: there are a lot of ambitious businesses out there. We want to support them and help bridge those links between manufacturers and small companies to help them share knowledge, experiences and best practice.”
McKinnon went on to outline how Enscite will work to help manufacturing businesses to grow and thrive, drawing on the expertise of its partners to deliver practical business improvement programmes, run supply chain workshops and leverage funding to support investments in new technology.
In his keynote speech at the event, McLoughlin mentioned the need to ensure that options are available to qualified engineers and that shortages are not overlooked. “To implement growth, we need to make the most of our senior engineers,” he added.
Logistics insights from Toyota
Tony Walker, deputy managing director of Toyota Motor Manufacturing UK, spoke about the benefits of shared expertise and communication to the automotive logistics industry that underpins the aim of the new initiative.
“We try to build relationships in the long term with suppliers, and attach big importance on relationships,” he said. “It’s about close communication.”
Walker described the UK focus on localisation and the need to maintain an integrated supply chain. For Toyota, however, he said the biggest current challenge was for logistics operations.
“We get our parts from across Europe, and as far away as Turkey,” he said. “We receive an enormous number of parts, often as many as 120 trailers a day. We receive 15 trailers a week from Poland, and 35 from France.”
The logistics challenges also manifest themselves in market seasonality, according to Toyota.
“Our demand is very volatile and there’s a lot of fluctuation, but this is not the fault of suppliers.”
Given the current economic and political changes across the European Union, in addition to such factors as Greece’s financial crisis, often short notice changes to production can hinder the supply chain.
“Our vehicle specification is fixed only five days before production, so the daily order needs to remain flexible and adapt to sudden changes,” said Walker.
Walker also cited the importance of quality problems, and stock remaining in the pipeline. Ensuring that managing directors and CEOs maintain communication and visit their own shop floors is also of vital importance to supply chain efficiency.
For the UK specifically, “the blessing and the curse of the channel” for transport operations was a concern for Walker, who highlighted how localisation often refers to the whole of Europe, as opposed to just the UK.