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Growth in the face of uncertainty – 6 months since the Business Focus release

6 months on since PP Control & Automation’s in-depth feature for Business Focus Magazine, the message on growth in the face of uncertainty is perhaps even more appropriate now, as Theresa May attempts to get MPs to vote for the Brexit withdrawal agreement on 11th December. If she clears that hurdle, it will go to a vote in the European Parliament.

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It’s an uncertain time for many businesses in the UK right now, but PP Control & Automation are reinforcing the fact that uncertainty is not something to be scared of – but can be managed to create growth opportunities. The full article (updated) can be found below or the original can be downloaded as a stand-alone PDF here.

Strategic outsourcing solutions to machinery builders

“In a nutshell everything we do is about the control and automation of complex machinery – this could be in sectors such as machine tool, food processing, packaging, printing, medical and scientific industries to name a few. We look to provide a more complete strategic outsourcing solution that meets the specific needs of the customers and can include electrical, electronic, pneumatic and mechanical design and build,” explains C.E.O, Tony Hague.

Sub-contract manufacturing is a competitive field, with lots of other companies vying for the same customers, but PP Control & Automation’s comprehensive approach sets them ahead of the rest.

“There are lots of smaller companies in our field,” Hague admits.

“When you talk about any form of outsourcing there are hundreds of companies made up of five to twenty people that are quite small and specialist. Where we’re different is we don’t start off trying to sell a prospective customer a ‘product’.

“We want to engage in a consultative manner to first understand the customer’s specific needs, constraints, challenges and opportunities. Before we start to understand this, we cannot even begin to consider what a solution may look like for them and how we can demonstrate the benefits to the client.

“Typically, the OEMs challenges have a common thread – one of reduction in total manufacturing costs and production lead times, greater manufacturing agility and shorter lead times to customers and, certainly at the moment, ways in which to increase plant capacity as order books are full but capacity is a constraint.”

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While PP Control & Automation is by no means a huge corporation, with a staff of 220 people it’s the largest such company in the UK in their field and one of the largest independent companies of its type in Europe.

Hague explains, “We’ve size, capacity, capability, a proven track record and over a million pounds has been invested in our own factory automation, and that’s combined with lean six sigma principles in the business to create an efficient, innovative solution for customers. That gives existing and new clients the confidence to work with us as a strategic manufacturing partner.”

A time of change

Of course, businesses across the UK are preparing themselves for a dramatic shift in the way the country interacts with the rest of the world. It’s now over two years since the UK activated Article 50.

The recent details unveiled on the agreement propose a 21-month transition period after the UK’s departure, to allow time for trade talks but nobody knows exactly what kind of trade agreements or borders that post-Brexit UK will have. The extent to which much of the trade proposals and temporary customs arrangements go in terms of a permanent relationship can only be negotiated formally after Brexit has actually happened.

“One of the big challenges facing our customers and therefore affecting us is the impending Brexit, and what that will do for UK machine building from the point of view of risk management and risk mitigation,” Hague says.

“That’s going to be very interesting. How will currencies react? What will be the attitude towards investment risk?”

For PP Control & Automation, the news of Britain’s decision to leave the EU meant facing uncertainty head on.

“Literally the day the result came through was the day we signed off on our third and largest factory extension,” Hague remembers.

“We were about to press the button and the result came in and we sat down and had to decide whether to put a stop to the extension.”

After viewing all the pros and cons, optimism prevailed, and the go-ahead was given to the £1m investment and the creation of 1,000 sq metre of additional production space and new automated logistics facility.

“We decided we’re growing whatever the political landscape, so we went ahead,” Hague says.

“Manufacturing in the UK is an industry of optimism and our customers are leading machine builders in their fields. They are only talking it up at the moment, being cautiously optimistic.

There’re thoughts about whether there will there be a blip in confidence, and what form that might take.”

Optimism is no defence against risk, but PP Control & Automation also see potential opportunities even in a time of uncertainty. When considering the costs and timing of ‘additional capacity’ for growth are seen as “high risk”, that’s when outsourcing and sub-contracting can become appealing options and that’s just what the company is set up to provide.

“From our point of view, offering strategic outsourcing solutions is a form of risk management for the customer. If people need more capacity, to bring down lead times to avoid loss of orders, and grow to meet those needs, then demand changes, you’ll be stuck with a bigger factory, more people and higher overheads,” Hague explains.

“Strategic outsourcing gives you flexibility around that. It provides many benefits without the risks – the important thing is to select the right partners to work with.”

Keeping up with technological developments

Of course, Brexit isn’t the only big change affecting UK businesses. A company in the control and automation business is also going to have to work hard to keep up with technological developments.

“There’s the sheer rate of change of technology and how we can design and develop solutions that will provide real time data to help optimise solutions,” Hague says.

PP Control & Automation are working hard to ensure they stay ahead of the curve.

“We have a number of technical partners that we work closely with, so our role really is to develop collaborations and engagement between our engineering team, our customers and the technical network, and fundamentally bring something to the table in terms of design innovation,” Hague says.

“The rate of change is frankly incredible. With Industry 4.0, the Internet of Things, Big Data, the Cloud, they’re all out there and creating the relevance between technology and process for machine builders. It’s one thing having the technology, but how can we use it? How can we design it to give our customers a competitive advantage?”

A key element in ensuring the company stays ahead of the competition to ensure its staff are correctly trained and kept up to date on the latest developments, something Hague takes seriously.

“We started our own in-house training school 16 years ago,” he tells us.

“We recognised the need to train and develop our staff, and we didn’t want to do that with consultants because they come, do their training and go and it doesn’t positively affect culture. So, we started our own in-house training school.”

Beyond process improvement, that training has also meant a cultural shift for the company.

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“People in controls and automation don’t normally talk about Six Sigma, but we saw the need to address that with our people and developed a training roadmap specific to PP,” Hague remembers.

“All people in the business go through the roadmap receiving an average of 200 hours of formal training each year, which includes 5S, lean, Six Sigma and ‘Theory of Constraints’. We didn’t just want classroom knowledge so we focus on the practical application of what people are taught. Approximately 60% of our training time is practical applications. We’re very good at growing our own people, which is critical for our own growth and well-being.”

Hague believes that it’s an approach that has left the company well equipped for the future, whatever happens.

“At the moment the future looks excellent. We’re growing revenue year on year and, in the last 15 years, we have expanded from a £4.5 Million business to one approaching £25 million, with new customers not just in the UK but further afield, including North America, Germany and even Iceland,” Hague says.

Back in May, when this article was released, Tony Hague signed it off with optimism.

“Everything’s looking good, fundamentally.”

That same optimism is still very much intact as we edge nearer to understanding the true impact of Brexit on UK manufacturing, as PP Control & Automation continue to push a core message: Growth is still the fastest way to profitability.

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