APPENDIX 35
Memorandum submitted by Metals Forum
INQUIRY INTO THE FUTURE OF MANUFACTURING
INDUSTRY IN THE UK
Metals Forum members share a common concern
about skill shortages and therefore want to contribute to the
Committee's deliberations on that issue as follows.
METALS FORUM
1. Metals Forum (www.metalsforum.org) comprises
11 leading ferrous and non-ferrous trade associations and MetSkill,
the sector dedicated skills and performance body. Our sector employs
nearly half a million people in businesses working in virtually
every UK town and city. Each year, these businesses sell £38
billion of metals into engineering, construction, automotive,
aerospace and other manufacturing sectors all over the UK and
of course worldwide. So, many UK companies need a UK metals industry
that is world competitive to underpin their position in their
own sector. Our added value to the UK economy is £15 billion,
roughly equivalent to the automotive and aerospace industries
combined.
SUMMARY
— Metals companies are key participants
in the UK manufacturing supply chain.
— The industry is concerned about the
lack of skills at technician and graduate levels.
— Despite major investment, Government
has not yet delivered relevant improvements at secondary and university
levels, where the `metals' subjects are in retreat.
— The sector has taken a lead on their
own to tackle both skills and perception/image problems.
— Metals are not a priority sector
regionally outside South Yorkshire and South Wales.
— Sector Skills Councils (SSCs) are
now bedding down and in our sector are establishing useful partnerships
with other bodies and formulating skills strategies that meet
business' needs. The metals' industry programme is run by MetSkill.
A proven pioneer in this area, MetSkill has the full backing of
the sector, because it has proven to be effective and responsive
to their needs.
— Government should therefore resist
the temptation to meddle, but should see SSCs as the primary route
for channelling funding into skills.
INTRODUCTION
2. To ensure its sustainability, the UK
metals industry needs a fully skilled workforce at all levels.
This requires action both by Government and the industry.
3. After raw materials and transport, people-skills
are usually the biggest revenue cost for UK metals companies.
Keeping pace with the immense competitive challenge and complex
structural changes is not simply a matter of investment in technology
and innovation. It is also about ensuring a competent, flexible
and responsive workforce to build skills and capability for the
future.
4. The industry is gravely concerned about
the status of science and engineering departments in our universities.
The number of well qualified students leaving our secondary schools
and wishing to read science and engineering is shrinking rapidly.
Partly because of this and other causes centred on university
funding, departments in subjects such as materials science, chemistry,
physics, engineering and architecture are closing or at best amalgamating.
5. There is little evidence of a strategic
overview of the problem and no evidence at all that the Government
is prepared to increase the funding for the teaching of these
subjects, essential to the future well-being of UK.
6. At the turn of the millennium a worrying
report found that for eight years about a thousand graduate physicists
a year were leaving teaching, while only one hundred and fifty
were entering the profession. UK universities had been closing
down Materials and Physics departments for lack of applicants
(over the previous 10 years A level physics entrants had fallen
by 25%).
7. Despite the industry's efforts to raise
recruitment standards, there is widespread perception that school
standards are not meeting the needs of the metals industry. The
quality and relevance of the education provision at all levels
is of deep concern, not least because of the severe shortage of
pupils studying maths, physics and chemistry, the key subjects
for future metallurgists and materials scientists. Not only are
employers looking for good levels of literacy and numeracy, they
also need an educational system that is capable of producing school
and university leavers equipped with workplace skills such as
communication, IT and problem solving.
8. The Tomlinson Review Working Group
for 14-19 Reform set out recommendations for a revised education
system based on a new openness towards working with industry.
The recommendations centred on a Diploma structure, designed to
bring parity of esteem to vocational education and apprenticeships
alongside academic qualifications, and to deliver young people
with the basic skills and attitude the industry needs.
9. Our industry saw this as an opportunity
for Government to take decisive action. The approach at moment
is more piecemeal.
10. However, through MetSkill and SEMTA,
metals employers are contributing directly to the development
of the new Specialised Diploma in Manufacturing for 14-19 year
olds. But this reform of the educational system will not be completed
until 2013.
11. It is indicative of the holes in our
current system that to keep their operations running smoothly
metals companies rely on immigrant workers, particularly from
Poland, for their superior skills and work ethic.
12. The concern here is not solely about
current competitiveness, but also about the future. We can see
that UK manufacturing is in full transition. Mass production is
being superseded by customer tailored packages of products and
services, where lowest price is not the key determinant in the
buying decision. Our industry will have to arm its workforce with
a different skills set to drive new approaches and change through
their businesses in the future. We will have to provide the best
in service levels to meet new applications that add value to our
customers' offers, thereby helping to increase their margins as
well as our own. That will place an additional premium on skills.
THE INDUSTRY'S
APPROACH
13. MetSkill is the focus for the industry's
Skills and Productivity Strategy, which is promoted through SEMTA.
The strategy hinges around ten key drivers that have been identified
by Metals Forum employers, and sets out a range of strategic business
solutions that build on best practice, recognised standards and
frameworks that have been developed by and for the metals industry.
14. In the last three years, nearly 11,000
employees from 600 companies have taken part in MetSkill's competence-based
qualifications and culture change programmes.
15. This scale of development, within a
previously unqualified workforce, has been made possible by the
close involvement of company representatives in designing programmes
and qualifications which directly address business objectives
and provide flexible training delivery, at a time, place and in
a format that companies can accommodate.
16. Process improvement and supply-chain
partnership activities have saved the industry an estimated £20million
per annum. Companies of all sizes are participating in Metals
Industry Competitive Enterprise-facilitated process improvement,
productivity and supply chain activities, with annual savings
now averaging £220,000 per company. Four companies report
savings exceeding £1million a year.
17. Over 120 companies are now participating
and recording measurable improvements including:
|
| Improvements
|
| Average
| Highest |
|
| Not right first time | 46%
| 100% |
| Delivery schedule achievement | 58%
| 359% |
| People productivity | 36%
| 192% |
| Stock turns | 43%
| 138% |
| Overall Equipment Effectiveness | 15%
| 60% |
| Floor space utilisation | 25%
| 140% |
|
18. In 2005, MetSkill launched the Metals Academy, to
generate the momentum to achieve a 20-fold increase in apprentice
recruitment by 2010, from 500 to 10,000 per year.
19. Led by employers, the Academy draws together the
best in education, careers promotion and apprenticeship provision
both nationally and regionally, into a `one-stop-shop' for employers,
young people and schools.
20. Overcoming negative industry perceptions to attract
the next generation of skilled operators, engineers and managers
into the industry is a major challenge for metals employers. An
ageing workforce means the sector is losing employees faster than
it is recruiting; whilst flatter structures and new working practices
require recruits to be more capable than ever before.
21. The Metals Academy offers a range of co-ordinated
services at national and regional level. Its three central objectives
are to:
— promote metals industry apprenticeships to young
people and generate commitment post recruitment;
— influence the education curriculum and availability
of training to meet employer needs; and
— provide an enhanced and co-ordinated package of
apprenticeship recruitment and development for employers.
22. Regional initiatives are already in place in South
Yorkshire and the Black Country, with a schools co-ordinator working
to build in-depth, strategic partnerships with selected specialist
engineering schools in each region. Focal activities include delivering
structured and fully co-ordinated work experience programmes,
teacher placements, company visits and industry Ambassadors.
MANAGEMENT TRAINING
23. "Most companies have access to similar equipment
and technology and so the main area in which we can gain an edge
over our competitors is through the skills of our people. Within
the workforce the most profound difference we can make is by developing
our managers; the people who deploy our plant and people resources
on a day-to-day basis, and ultimately make a real impact on our
business performance." (Richard Morley, managing director,
Caparo Merchant Bar)
24. Managers occupy a critical role in the rapidly advancing
steel and metals industry. They have responsibility for implementing
strategy, leading culture change, driving business improvement,
introducing changing technology and, perhaps most importantly,
managing people both as teams and individuals. The modern manager's
role therefore requires a complex mix of skills, yet many enter
management from technical positions, with limited or even no previous
exposure to management techniques and practice.
25. "Managing for Success", launched last year,
is the metals industry's response to the skills needed of modern
managers in the sector. The unique programme was developed by
a steering group of senior representatives from Caparo Merchant
Bar, Celsa, Corus, Metsec and the Wedge Group. It focuses on delivering
and embedding vital personal and occupational skills and competence
through a combination of taught modules and work-based projects
that enable candidates to put their learning into practice and
start adding value to their company from day one.
27 September 2006
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