More than a nation of hairdressers

Hundreds of Rolls-Royce workers look to the heavens outside the manufacturing giant's Derby plant. They scan the sky, squint and stare but thick cloud means no one spots the huge 787 Dreamliner flying by to salute the workforce that built its engines. The scene is somewhat apt as Colin Smith, Rolls-Royce's director of engineering and technology, vents his frustration over industrial policy. Countless administrations have stood on the steps of Downing Street and stared blindly past UK manufacturing's enormous potential, he says. That's changed under Gordon Brown and now David Cameron, Smith reflects. But after the talk, now must come the walk. "How about a bit of backing up?" he says. "It's about time those guys started shaping up and getting an industrial policy that makes it [manufacturing and engineering] more important than being a bloody hairdresser." The rebuke warms the cockles – the UK's flagship manufacturer echoing the views of Everyman Engineering & Sons. Smith adds: "If we're going to recreate a serious manufacturing capability in the UK, we need an industrial policy that is carefully thought through and bought into by the people that matter." Top of the list must be schools, says Smith. Our students simply don't match up to their contemporaries in Spain, Germany and beyond, the Rolls-Royce chief warns. "In general, the science stuff is two years behind. It's just not as good... the education system has lost its way." It's nothing Michael Gove and his team at the Department for Education haven't heard before. Ministers admit historic failings in the curriculum, which have allowed sloppy maths and English standards to take root. Views on the cure are less coherent. Gove and co preach a curriculum built around a core of STEM subjects, but empowering teachers to dictate the subsequent direction of learning. Smith hankers for something much more partisan to British industry. "I'll be quite blunt and I've used the same terminology with government: if manufacturing is important, you'd better start telling the schools that science and maths is more important than buggering around with art," he says. You'd hope his candour caused consternation in the corridors of power. Rolls-Royce has just beaten Google, Apple and the London Stock Exchange to the title of UK's business superbrand 2012. The company has been in renaissance after a rocky spell under state ownership in the 70s and 80s. The government sold off Rolls-Royce Cars in 1973 to allow the business to focus on jet engines. It's gone on to excel in marine power, energy and civil and defence aerospace. Innovative technology and premium products have been welded with a lucrative servicing business to power Rolls-Royce to £1.1bn profit in 2011 – up 45% on five years ago. The company keeps 11,000 workers paying their mortgage in Derby alone. The business reckons that between Rolls-Royce, its supply chain and employee spending, it supports 106,000 UK jobs – one in every 300. A powerful friend for a government fixated on growth. And right now the relationship between the two sides remains in good health. Rolls-Royce acknowledges a more considered attitude towards manufacturing under the coalition. The firm has responded with a new advanced blade casting facility in Rotherham and significant investment at the Derby site, which has housed Rolls-Royce for over 100 years. Derby will continue to build high-value goods like Trent jet engines because that is where technical expertise is greatest, stresses Smith. Britain has an enviable back catalogue in aerospace design and testing that is hard to replicate elsewhere. "You can't move engineering that quickly even if you wanted to. Engineering is a craft skill requiring time and experience. It's really difficult to encapsulate high technologies and move them across borders." But confidence must not give way to complacency. Rolls-Royce opened a new wide chord turbine fan blade and Trent engine manufacturing facility in Singapore in 2007 – the first time such top end products have been made abroad. The move is partly driven by practicality with the rise of Asian order books but there's a more chilling motivator. Smith explains: "From an engineering point of view, I'm worrying about the number of engineering graduates in the UK and the number of manufacturing engineers. We're having to seriously consider moving work abroad." The case is increasingly hard to deny. Rolls-Royce can hire bucket loads of engineers from Bangalore, who are at least the academic equal of UK colleagues but cost half as much. Going east, company chiefs encounter governments who will grant their every wish if it leads to a chance of landing local jobs. Smith says: "Singapore is entirely coherent from the top. When we said we were thinking about a new facility, they lined up the universities and local polytechnics to the course we needed. There was no discussion; we didn't have to argue." It's a walk-through-walls kind of attitude the UK has to adopt, says Smith. Manufacturing wants the proposal, the white wedding and a commitment to having kids. But Westminster still seems to be dwelling over the first date. Smith remarks: "I think the government could do a lot more by not just saying manufacturing is important, but starting to follow it through with a few school policies." Until that happens, Rolls-Royce will be partially protected from perceived educational shortcomings. A company whose name is a synonym for quality will always have first pick at the draft. A graduate scheme takes those from universities with a 2:1 or better. More than 6,000 applied last year for 242 places. The company also prides itself on expanding technical career paths, says Smith, himself a former apprentice. "We've deliberately got a technical careers structure so you can remain a specialist engineer. Those guys and girls are paid pretty good money and drive around in 5 and 7 series BMWs." Parking spaces could soon be at a premium at the Derby site. The company has unveiled a new apprenticeship academy that will double the throughput of apprentices to 200. The academy has taken on an altruistic streak with many places opened up to SME supply chain partners. Old laments along the lines of, 'well that's okay if you're a big boy like Rolls-Royce' are no longer valid. Now, smaller firms can second their apprentices to Derby to be trained up and call them back when the schooling is complete. The scheme shows the enormous multiplier effect that giants like Rolls-Royce, JLR or JCB can have on the wider health of UK manufacturing. The academy was made possible thanks to a £6m windfall from the Department of Business, Innovation and Skills – proof that the government can show its love for UK manufacturing and leave a legacy of employment, prosperity and fulfilled youth. Smith reflects: "If you go into the middle of Derby there's a brand new retail centre. Where's the money come from? It's come from the high value jobs created by ourselves, Bombardier and JCB." No collaterised debt obligations, defaults or derivatives necessary: an industry paying a good, old-fashioned dividend on government cash. Food for thought as the newly shuffled cabinet laments the latest spluttering set of GDP figures for the UK economy. Smith reflects: "The government has this mantra that they don't like picking winners. That's because they didn't pick winners, they pumped money into dead companies like Rover. Picking winners is exactly what they should do." Make your manufacturing purr like a Rolls-Royce As the UK's number one business superbrand, Rolls-Royce sets the standard for British manufacturers. So how does a company obsessive over quality keep its manufacturing processes up to scratch? Quality street "It was all about quality," as founder Sir Henry Royce put it. Delivering excellence is one thing when you're hand-building cars in 1906, but meeting the aspiration in a business stretching across 50 countries is a huge challenge. Enter the Rolls-Royce Production System, which borrows from TPS and Six Sigma, Smith says. A typical day at a Rolls-Royce site starts with a quality circle meeting. Smith says: "Once a day, you stand up together and make sure that any issues are discussed. If there's something wrong with the machine tool or or there was a quality problem, make sure everyone knows and someone fixes it." Delegate the non-essentials Rolls-Royce avoids the Jack of all trades trap. Less sophisticated components are delegated to supply chain partners, saving the company time and money. Around 70% of manufacturing is carried out by suppliers. "We only make the the real top end stuff in house," explains Smith. "Otherwise our supply base... will decide where they make it. They follow our procedures and criteria." Invest in people and premises Shabby chic is a fashion faux pas in Derby. A company trading on quality aims to practise what it preaches when it comes to facilities and the company spent £467m globally last year doing just that. Smith says: "We've had a lot of capital investment in the last ten years. You have to give people a good working environment." Benchmark The company actively seeks improvement ideas from all quarters, explains Smith. Automotive is a key, with Rolls-Royce benchmarking on parts per million quality control. Comparisons are kept to companies producing similar volumes, says Smith. "I was at Aston Martin last week. It was more than just looking at nice cars, it was to find out how they do it. Aston Martin makes 3,500 cars per year and that's the same ballpark as us."