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Digital journey to growth

15 August 2023

At the recent Talking Industry Live event, Dr Megan Ronayne, head of industrial technologies and manufacturing at Innovate UK KTN sat down with Mike Hague-Morgan, executive director at Autocraft Solutions group to explore how he transformed the company using digitalisation. Charlotte Stonestreet reports

THIS IS a journey that started in 2007, at which point Innovate UK had just been formed, Dr Ronayne had just embarked on a ten year research project at Birmingham University on how to define UK manufacturing and Hague-Morgan was headhunted from a multinational where he was commercial director, to join Autocraft.

“It was a very traditional business, making and remanufacturing engines - it wary very hands-on and manual, a very skills-based business,” he says. However as the quality of engines improved and less remanufacturing was required, business for the company was reduced.

“It was a similar story that I’d just been through in the casting forging industry where there was over-capacity, things had moved East and there wasn’t enough on the order books,” says Hague-Morgan. He was taken on to come into the business to consolidate and tasked with turning things around in a two-year timeframe.

However, things did not work out quite as planned. Six weeks after Hague-Morgan joined Autocraft, Leman Brothers collapsed, signalling the start of the worldwide banking crisis, which he had thought would be the end of the company. At the time, the business had a US-based parent company which had the majority of its interests in the mobile phone sector, which according to Hague-Morgan had very little interest in seeing Autocraft succeed. This led to Hague-Morgan putting everything on the line and buying the business himself.

The first five years were spent getting the company on a stable footing, then in 2014 it embarked upon the next part of its journey which is where Innovate UK came onto the scene, at which point the company had already increased turnover from around £7m to £14m. At this time, against a backdrop of Industry 4.0 really taking hold in the UK manufacturing landscape, Hague-Morgan had started going to workshops and finding out what was going on.

Outside inspiration

Hague-Morgan recalls how he was embroiled in a disagreement with a customer whereby he could not prove that in fact, it was the customer and not Autocraft that was at fault, whilst simultaneously returning an airport rental car. Hague-Morgan was struck that something like the process and equipment used by the staff at the rental company - handheld scanner/tablet with a series of prompts to help the employee complete the returns process, taking photos at appropriate points to record the condition of the car - could be used to prove that parts leaving the factory were in a fit state. As a result, a system was put in place whereby photos were taken of each engine and uploaded to a drive which could be accessed by the customer.

The investment of £2000 on scanners, combined with a prompt script written by one of Autocraft’s graduate employees saved the company £400k per year on warranty claims from dealers incorrectly fitting the engines and then claiming that they were faulty when shipped.

As Hague-Morgan points out, this relatively simple project, which resulted in immediate tangible savings is in contrast to many of the huge, immensely expensive Industry 4.0 projects that were being showcased in Europe at the time.

“So that was the first thing on the journey,” says Hague-Morgan. “ And that got the appetite, and the confidence within the workforce. So some of the people who were a bit doubting started to think that this could actually work.”

Then in 2015, Autocraft implemented a low volume production line for JLR. “This was the first time that we used HMI screens, DC tooling, sensors to make sure the right bolt when in the right order - and it was a massive step forward,” says Hague-Morgan. However this development didn’t come cheap and the company had to find in the region of £2m to fund the solution, which was purchased from a global supplier.

“We adapted the original solution and in effect took something that wasn’t all that flexible and made it flexible, says Hague-Morgan. However, this still wasn’t without its frustrations; whenever the slightest change was needed to the set-up, Automcarft had to wait for and then pay top rates for an engineer from the supplier before any adjustments were made.

Predicting the future

At this point, Hague-Morgan attended an Innovate UK KTN workshop where he got to meet and share ideas with people from other industries. He ended up talking to someone from the gaming industry whose job it was to predict the future computing power available for a typical home gaming console, and then write the code ready for what has been predicted. Central to this is the idea that consoles will no longer have controllers but use cameras which can detect with great accuracy the slightest movement made by the player.

This led Hague-Morgan to the realisation that some of the technology he had recently invested in on the new line would become obsolete in the near future, this is if it wasn't already. As a result, Autocraft employed and worked with an innovative Belgium start-up company developing camera-based production systems and signed up for a five year deal.

Using the system, which both instructs and monitors, if any part of the production is not carried out in the correct sequence, this is flagged resulting in what Hague-Morgan says is a proper no-fault-forward system that is also fully flexible.

"Because the camera is so easily programmable, it could be a V6, a V8, a Ford engine, a Peugeot engine - it doesn't matter!" says Hague-Morgan.

It also means that employees are able to easily work on many different engine types, rather than having to undergo extensive training for each model.

"We don't train people to build an engine, we train them to play a computer game," explains Hague-Morgan. "By following a light system you can build an engine – although there are instructions as a backup. So people join our business and within two weeks they are building high-quality engines for major global brands - none of our competitors can do that."

This has enabled Autocraft to move from a commoditised business model where the deciding factor is the lowest cost, to a working practice that sees the company able to offer a service and a solution. It's no longer about being the cheapest, it's about flexibility, agility, speed and quality.

It has also meant that the company has been able to minimise the impact of the current skills shortage. Training engine builders within two weeks greatly reduces the cost and time conventionally needed to onboard new members of staff, and according to Hague-Morgan people really like the new way of learning, particularly those who are younger.

Cultural change

When it comes to the cultural change required to successfully implement a digital strategy like this, Hague-Morgan believes that this cannot be achieved in a 'normal management' way.

"In any business that you want to change there will be people with really strong opinions," says Hague-Morgan. "Don't be angry with them; they think that for a reason."

While it might be tempting to work slowly with the more enthusiastic people within a workforce, Hague-Morgan advocates making an effort to identify and work closely with those who might be more doubtful, that way any cultural transition will be much faster.

He does have a few words of caution: "Not everyone will be with you, even after that and unfortunately some people haven't made the journey."

However, out of the many hundreds of people employed by Automcraft, Hague-Morgan estimates that fewer than ten people are no longer with the company due to the changes made on the digitalisation journey. This low level of attrition is something that he partly puts down to  
allowing people to make mistakes.

"Give them enough confidence and support to try something new, but be close enough to guide them," says Hague-Morgan "Just get a room and talk about it, talk about what you did, what you could have done better and what's the next thing that you can do. Always leave with a positive."

And there is no doubt that this has worked in a spectacular fashion. From a turnover of £7m when Hague-Morgan first joined the company, to £70m with more steep growth forecast for the near future, this is truly a story of digitalisation success.