By Andy Page, CEO of Sharing in Growth
There is huge opportunity for the UK aerospace supply chain to benefit from record worldwide growth.
The global aerospace industry is expected to double in size in the next 10 years with an anticipated total civil aerospace market in excess of Ј4 trillion by 2035. In terms of maintenance, repair and overhaul, the civil aerospace fleet is expected to double by 2035. And the accessible defence market is forecast to grow by 40% by 2024.
However, despite the opportunity, the proportion of business being won by the UK supply chain appears to be shrinking in that turnover is growing, while GVA is flat-lining.
For UK suppliers to share in this growth, companies still need to accelerate delivery of competitive performance.
Sharing in Growth, the government-backed competitiveness improvement programme, was established in 2013 because aerospace primes believed there was a 20% cost gap between the UK and the best of the world.
Today Sharing in Growth (SiG) is working with 55 companies, ranging in turnover size from Ј6 million to Ј70 million, across the UK and across a wide range of commodities. Through its comprehensive approach covering leadership, culture, operational performance and business development, had helped these firms secure a total of Ј2 billion in contracts. This is equivalent to around 3,000 jobs so we are well on target to our ultimate objective of safeguarding 10,000 jobs by 2022.
The programme works and aims to make sustainable improvement because its intensive content and four- year duration is commensurate with the scale of the challenge. Delivered by SiG’s own 120 strong team of lean coaches as well as a bank of experts including The University of Cambridge’s Institute for Manufacturing, Deloitte, Industry Forum and the National Physical Laboratory, makes normally unaffordable blue chip expertise accessible to smaller but ambitious suppliers because the Regional Growth Fund pays for the training and development.
From the outset Sharing in Growth targeted smaller but ambitious companies in order to develop stronger mid-caps who will have the scale to invest in capital and technology and be the type of company primes want to deal with. Only 5% of the UK’s aerospace companies are these large companies with sales over Ј100 million. The UK has a long tail of smaller suppliers. The global primes are looking for increased integration, buying systems rather than components so it’s essential that the UK develops more mid-cap companies who can meet the needs of the primes or tier one suppliers.
Sharing in Growth is a fundamental contributor to the UK’s Aerospace Growth Partnership and its Supply Chain Charter, which has signatories such as Airbus, Bombardier, GKN, Leonardo and Rolls-Royce. We recognise that to build UK aerospace mid-caps means not only building skills and capability through Sharing in Growth, it also relies on technology which can drive productivity and satisfy the customers’ demand for innovation.
We therefore work closely with ADS, the regional trade bodies and the ATI, and are delighted that, with the new Ј8m ATI funding, the National Aerospace Technology Exploitation Programme (NATEP) will support a further 40 collaborative technology projects involving around 100 companies, creating or sustaining up to 500 jobs in the sector.
As chairman of NATEP, I am confident that we can build on the first 114 projects, involving 268 companies, supported since NATEP’s launch in 2013. Like Sharing in Growth, public funding is matched by industry funding. Sharing in Growth has attracted over Ј50 million in private funding and, with this second round of NATEP funding being matched by more than Ј6.4m in industry funding, this round’s total value will be nearly £14.5m.
Around a third of the companies participating in Sharing in Growth are also working on NATEP projects. Together Sharing in Growth, the ATI and NATEP are helping smaller companies to improve their productivity and competitiveness, and gain in confidence and business capability. Furthermore, this integrated approach is demonstrating the potential for the UK’s Industrial Strategy to create a highly valued manufacturing sector for this generation and the next.
We would like to thank Andy for writing a guest blog for the Institute. Please note that a guest blog provides an external independent perspective, and does not necessarily represent the views of the ATI.
Andy Page, CEO, Sharing in Growth
Andy has over 25 years’ experience in aerospace with senior engineering and supply chain management roles in Rolls-Royce, including Chief Engineer RB199 and Procurement Director for their German division, based in Berlin. He led Rolls-Royce’s supplier development activities across their global supply chain.
Andy is Chairman of the UK’s National Aerospace Technology Exploitation Program (NATEP) and sits on the government’s national manufacturing productivity working party.