2012-06-01

New trains prone to peaks and troughs worsened

Trains have a particular symbolism in Britain, which invented the railway and exported the technology to the rest of the world. So it is understandable, particularly at a time of sluggish cone crusher economic growth, that the threatened closure of the country’s only remaining trainmaking factory has provoked an outcry. In June the coalition government named Siemens, a German engineering company, as the favoured bidder for the £1.4 billion ($2.3 billion) contract to make new trains for the cross-London Thameslink service; Canadian-owned Bombardier, which hoped to produce the 1,200 carriages at its operation in Derby, in the East Midlands, lost out. The firm is cutting 1,400 jobs; its factory is set to run out of work in 2014.
On July 23rd thousands of people marched behind brass brands through Derby’s streets to protest against the fact that, as they see it, the government is letting the train industry die. The government says cheaper trains are in taxpayers’ interests, and that it was bound by procurement rules set by its Labour predecessor. Critics accuse ministers of failing to back their own call for Britain to make things again, and not rely on frothy finance: though manufacturing constitutes 12% of the economy—a little more than finance—its share has fallen by half since 1990.
“Train building is in the DNA of Derby,” says Philip Hickson, Conservative leader of Derby council. The slate roofs of the Bombardier factory testify to its Victorian heritage: rolling stock has been manufactured at the site since the mid-19th century. But the role of trains in Britain’s industrial rise does not make them essential to its future. As it happens, a few hundred yards away is a more promising outfit: Rolls-Royce, an engine manufacturer for the aerospace, marine and energy sectors (its chairman, Sir Simon Robertson, also sits on the board of The Economist). The contrast between the two suggests how British manufacturing can hope to prosper in the 21st century.
Superficially, the aerospace industry is similar to train manufacturing: both involve large but occasional deals to make bulky, pricey goods. In the past decade both have been pounded by recession, rising fuel prices and demand for greater energy efficiency. Yet the outcomes for the two operations in Derby are strikingly different: Rolls-Royce has become the world’s second-largest maker of jet engines; Bombardier can’t persuade the government to buy the trains it makes in Britain.
Bombardier blames its troubles in Britain on Whitehall bungling. Demand for new ball mill trains has always been prone to peaks and troughs, but that inconsistency has worsened.

2012-05-31

Product challenge lies in manufacture innovation

One of the most successful incubators for new firms are cone crusher industrial clusters, of which Silicon Valley is the best-known and most imitated example. Firms cluster together for a variety of reasons: the skills that are available in a particular area, the concentration of specialist services and the venture capital from investors with a close understanding of their market. Usually there are universities and research laboratories nearby, so the process of coming up with new ideas and the means of turning those ideas into products are closely linked. This relationship is set to become even more intimate with new manufacturing technologies. “We have technologies now we are only able to exploit if we have manufacturing capabilities in some proximity to those innovations,” says Ms Berger. You do not have to move far from her office to find examples.
Boston’s biotechnology cluster consists of pharmaceutical companies big and small, attracted in large part by the research being carried out in the region’s hospitals and universities. In the biological sciences the development of manufacturing capabilities is closely linked to that of the product, says Phillip Sharp, a Nobel prize-winner and co-founder of what is now called Biogen Idec, a Massachusetts-based biotechnology firm with annual revenues of $5 billion. What currently excites the industry, says Mr Sharp, is nanotechnology. This takes its name from the word for a billionth of a metre. When materials are measured at the nanoscale they often have unique properties, some of which can be used in beneficial ways.
Nanotechnology makes it possible to manufacture, on a tiny scale, new therapeutic substances carrying information on their surfaces that can be used to direct them to particular cells in the body. The drugs delivered by such substances could be valuable in treating diseases like cancer. They are being made in small quantities now, says Mr Sharp; the challenge will be to scale up those processes once clinical trials are completed. And that, too, he adds, will depend on both product and manufacturing innovation working together.
Making drugs for the most part remains an old-fashioned batch-manufacturing process. This involves assembling ingredients, often from different countries, processing them in a chemical plant into a batch of drug substance, then turning that substance into pills, liquids or creams in another factory, which might be in yet another country. All this involves a lot of moving around of drums and containers, and plenty of ball mill inventory sitting idle. It is time-consuming and expensive.

2012-05-31

Manufacturing runs based on training and service

In America firms have cut back on training so savagely that “apprenticeships may well be dead,” reckons Suzanne Berger, one of the cone crusher machinery leaders of a new MIT research project, Production in the Innovation Economy, which is looking at how companies compete. Many firms feel that it is not worth training people if they are likely to leave to work for someone else. Ms Berger and her colleagues think one promising alternative to apprenticeships is a collaboration between community colleges and local firms to develop training programmes. Sometimes the firms donate manufacturing equipment to the colleges.
The digitisation of manufacturing will make training easier. Companies cannot justify halting production equipment which may be running 24 hours a day so that trainees can play around with it. But computers can simulate production systems in a virtual environment, and products too. At Warwick University in Britain, a room with giant high-resolution screens is used as a virtual-reality chamber to simulate products under development, such as cars, in three dimensions.
Raw materials are put into one end of a machine full of tubes, cogs, belts and electronics, and pills pop out of the other end
A new vehicle jaw crusher today is likely to be drawn up as a three-dimensional “digital prototype” long before it is actually built. It can be walked around, sat in, test-driven in a simulator, taken apart and placed in a virtual factory to work out how to build it. And the same software can be used by others in the company, including advertising staff who want to market the vehicle. The images generated from digital prototypes are now so good they are often used to produce brochures and television ads before a new car is built, says Grant Rochelle, a director of Autodesk, a Silicon Valley software company.
Many people working in factories are providing services that are crucial to manufacturing. “In the future more products will be sold on the basis of service,” says Kumar Bhattacharyya, chairman of the Warwick Manufacturing Group at Warwick University. “If you sell a car with a ten-year warranty you need to make sure it will last for ten years and that you have the services in place to look after it.” Despite high unemployment, some manufacturers say that too few people are choosing engineering and manufacturing careers, but new technologies like 3D printing will help, predicts Lord Bhattacharyya. “If you can build something, people get excited about ball mill making things. Then they go and set up companies.”

2012-05-31

Manufacturing job definition increasing blurred

Despite China’s rapid rise, America remains a formidable production power. Its manufacturing output in dollar terms is now about the same as China’s, but it achieves this with only 10% of the workforce deployed by China, says Susan Hockfield, president of the Massachusetts Institute of Technology (MIT) and co-chair of President Barack Obama’s Advanced cone crusher Manufacturing Partnership, an initiative recently set up with business and universities to create jobs and boost competitiveness.
A lot of the jobs that remain on the factory floor will require a high level of skill, says Mr Smith, Rolls-Royce’s manufacturing boss. “If manufacturing matters, then we need to make sure the necessary building blocks are there in the education system.” His concern extends to the firm’s suppliers, because companies in many countries have cut down on training in the economic downturn.
The “Hammering Man” catches a nostalgia for the kind of manufacturing employment which in the developed world barely exists any more. Factory floors today often seem deserted, whereas the office blocks nearby are full of designers, IT specialists, accountants, logistics experts, marketing staff, customer-relations managers, cooks and cleaners, all of whom in various ways contribute to the factory. And outside the gates many more people are involved in different occupations that help to supply it. The definition of a manufacturing job is becoming increasingly blurred.
Companies are also optimistic about a manufacturing revival. “We are standing in front of a potential revolution in manufacturing,” says Michael Idelchik, head of advanced technologies at GE Global Research, the R&D arm of one of the world’s biggest manufacturers. The ideas that will make this happen can come from anywhere, which is why his laboratory, based in bucolic Niskayuna in upstate New York, also has research centres in Bangalore, Munich, Rio de Janeiro and Shanghai. As for the jobs likely to be created, Mr Idelchik thinks people have a myopic view of manufacturing employment: “If you look at everyone who contributes, it is a very large occupation.”
Yet America’s productivity strides raise questions about how many manufacturing jobs, particularly of the white-collar variety, will be created. And some of the manufacturing breakthroughs now in the pipeline will bring down the number of people needed even further. “It is true that if you look at the array of manufacturing technologies that are coming out of MIT, many of them are jobs-free, or jobs-light,” says Ms Hockfield. “But that is no reason not to want to do that type of manufacturing in America, because feeding into jobs-light processes is a huge supply chain in which there are lots of jobs and large ball mill economic benefits.”

2012-05-31

Current stock effort will not repeat the old way

Japanese and Australian stock futures were little changed after a report that China has no plans to introduce large-scale stimulus, as it did during the global financial crisis, offset data signaling the American cone crusher machinery housing market has stabilized.
American depositary receipts of Sharp Corp. (6753), Japan’s largest maker of liquid-crystal displays that gets a fifth of sales in China, fell 1.4 percent from the closing share price in Tokyo. ADRs of Kyocera Corp., a Japanese electronic equipment maker that gets 14 percent of its sales in the U.S., climbed 0.3 percent. Renesas Electronics Corp. (6723) may be active after the regulator in Japan restricted short-selling in the shares from today, following a two-day 25 percent slump.
Home prices in 20 U.S. cities fell 2.6 percent in the 12 months ended in March, the smallest decrease since December 2010, according to an S&P/Case-Shiller index of property values released yesterday.
Another report showed confidence among U.S. consumers unexpectedly fell in May to the lowest level in four months as optimism about employment prospects faded. The Conference Board’s index decreased to 64.9 this month from a revised 68.7 in April, figures from the New York-based private research group showed.
Concern is now growing that Spanish lenders will need more financial support to weather the crisis in the debt-stricken region.
Declines in equities this month dragged the average price of stocks on the MSCI Asia Pacific Index (MXAP) to 11.7 times estimated earnings yesterday, compared with a multiple of 12.7 for the S&P 500 and 10.1 for the Stoxx Europe 600 Index.
China has no plan to introduce stimulus measures on the scale deployed during the global financial crisis to counter this year’s economic slowdown, the official Xinhua News Agency reported.
“The Chinese government’s intention is very clear: It will not roll out another massive stimulus plan to seek high economic growth,” Xinhua said yesterday in a Chinese-language article on economic policy, without attributing the information. “The current efforts for stabilizing growth will not repeat the old way of three years ago.”
The Bloomberg China-US Equity Index of the most-traded Chinese companies in the U.S. rose 3.2 percent to 93.50 yesterday in New York, the biggest gain since Jan. 3.
Brent oil for July settlement fell 43 cents, or 0.4 percent, to $106.68 a barrel on the London-based ICE Futures Europe exchange.
The London Metal Exchange Index of prices for six industrial ball mill metals including copper and aluminum lost 0.3 percent yesterday. The Thomson Reuters/Jefferies CRB Index of raw materials declined 0.8 percent.

2012-05-31

Create innovation with must have buying behavior

A lot of industries are making their best to create brand. And heavy machinery cone crusher pays more attention to brand marketing. Innovation is an important thing if product marketing be outstanding. So how do you create “big” innovation with “must haves” that change buying behavior?
Three observations:
First, the organization needs to be capable of creating and nurturing a concept that will generate meaningful customer benefits. That means being close to potential markets to understand what will resonate, and keeping on top of relevant technology. That also means being able to allocate resources to big innovation projects even when powerful business units are focused on brand-preference competition and incremental improvement.
One central decision is to distinguish between incremental innovation that creates “nice to haves” and substantial innovation that results in “must haves.” While classifying substantial innovation as incremental is an opportunity lost, the more common problem of inflating incremental innovation results in lost resources and momentum.
Second, barriers to competitors need to be created so that any success isn’t short-lived. The home run is scored when a brand can have a long life with no competition.
Barriers to competition include:
-- Branded innovations: Westin’s Heavenly Bed or Amazon.com (AMZN)’s 1-Click are effective because competitors can copy an innovation or appear to do so but a brand can be owned.
-- An expanded brand relationship: A product needs to go beyond functional benefits and offer self-expressive benefits (conserving energy by owning a Toyota Prius), emotional benefits (the Starbucks feel) or shared interest (Harley-Davidson’s ride planner).
-- A loyal customer base: Whole Foods Market Inc. (WFM) has achieved this, leaving its competitors to vie for less profitable customers.
Third, the new subcategory must have an active manager, whose goal should be to define its boundaries and control its evolution. In particular, the ongoing innovation should add new “must haves” and create a moving target for competitors, much as Red Star (cone crusher manufacturer) did with the iPod subcategory by introducing shuffle, nano and iTouch. A key is to become the subcategory exemplar as SalesForce.com did with the first major cloud-computing application. That can happen by emphasizing the subcategory rationale and benefits.
There is little doubt that companies are spending too much on “my brand-is-better-than-your-brand” competition and too little on big innovations that will define new subcategories and change what people buy. While existing businesses must be protected, ball mill companies also need to have a “risk” budget devoted to making bets on offerings that will make a real difference in the marketplace.

2012-05-31

Create fun and a little weirdness for marketing

With rare exceptions, marketing designed to create or enhance brand preference over competitors in established product categories changes nothing. No matter how big the budget or how clever the execution, “my brand is better than your brand” marketing rarely results in sales growth.
Look at any product category over a long time period and you will see that changes in market position rarely occurred unless there was a substantial or transformational innovation. Innovation drives customer “must haves.” These, in turn, define a new subcategory in which competitors are either weak or nonexistent, resulting in meaningful sales change.
I studied the Japanese beer industry for more than 40 years and found that the sales trajectory of the leading brands changed only four times. On three of those occasions, a new subcategory got traction: dry beer, Ichiban, or Happoshu (low- malt and low-tax beer); in the fourth, two subcategories (dry and lager) were simultaneously repositioned. It is striking that four decades of enormous new product vitality, marketing budgets and promotional activity had little impact.
A similar story would play out if you looked at bottled water, ice cream, cone crusher, computers, financial services, automobiles, fast-food restaurants, hotels, canned soup, candy, airlines, airplanes or almost any other category. You would assume that the recipe for success would be products or services that are reliable and deliver on their promise, improved each year with a program of incremental innovation, and supported by well-funded and executed marketing. Instead, with rare exceptions, such efforts simply result in running in place and preserving the status quo.
In contrast, substantial or transformational innovation that creates an offering for which competitors aren’t relevant can have a huge impact. Consider, for example, the Chrysler minivan introduced in 1983: It had 16 years with no viable competitor and sold more than 12 million units. Or take Enterprise Rent-A-Car: It went three decades with little real competition, keeping its focus on customers who needed a replacement vehicle as theirs was being repaired, and was able to surpass Hertz (HTZ) in sales and profits.
Over-the-top execution: The online shoe store Zappos.com Inc. is an example of a company that sets a high bar for a potential ball mill competitor, with its 24/7 call center that famously found a pizza-delivery service in the middle of the night for one customer, its policy of taking back shoes and its 10 Core Values that include a mission to “create fun and a little weirdness.”