Following the Mittelstand model

It has long been recognised that when it comes to industrial clout, Germany is way ahead of the rest of Europe. While the UK economy has become increasingly skewed towards the banking and services sectors, Germany has maintained a strong economic base in manufacturing and technology, bolstering the country via relatively high employment rates and a healthy export culture.

At the heart of this economic structure is the 'Mittelstand', a powerful band of privately owned companies that are technology centric and geared toward the export market. Although the term originally referred to small and medium-sized companies, many have now outgrown this definition and can often achieve turnovers in excess of 1 billion Euros.

Increasingly, the rest of Europe is now looking towards the Mittelstand and how it operates in order to achieve economic growth and stability. One UK company that has already embraced the concept is Cambridgeshire-based sensors specialist, Zettlex. Set up by sensor engineers, Mark Howard and Dr Darran Kreit in 2004, the original idea behind the company was as to offer high precision position sensors that could operate in harsh conditions at a fraction of the cost of more traditional devices like Inductosyns and resolvers.

First developed by the American military during WWII to achieve high levels of accuracy in bombing navigation, traditional inductive sensors enjoyed a period of popularity in the 1970s and '80s before optical encoders became prevalent and took away much of the product's market share. As Howard points out, although traditional inductive technology is hugely beneficial in terms of accuracy and durability, it tends to be bulky and is also a high cost option.

"So the idea behind Zettlex was to provide a 'poor man's' version of Inductosyn," he says. "A product that uses 21st century electronics, software and manufacturing techniques to achieve the high levels of accuracy and durability, but at a fraction of the cost."

The company started by taking a traditional pressure gauge and fitting it with a sensor – to make a combination that it still sells today. This was followed by a request for a similar set up using for a flowmeter, then a valve, and that was just the beginning. Nine years down the line and Zettlex has moved premises twice to accommodate increased demand and has grown turnover year on year to a point where it is expected to reach around the £4m mark this next year – almost twice that of 2013. Howard also anticipates that this year will see exports accounting for as much as 75% of the company's business.

According to Howard, much of the company's increased turnover is partly the result of ongoing projects that are just beginning to produce returns.

"When we first see a new customer, the chances are they will not have seen anything like this technology before, so in the first instance we always have some kind of technical conversation," says Howard. "Following this, if they choose a custom sensor, we do the engineering to get the product to the right shape and size with the required electrical characteristics. This is usually in collaboration with the customer’s R&D engineers too – they are often developing a new product and we are part of that.

"Once the development has taken place, safety certification, qualification and approvals will all have to be sought, following which there will be a pilot launch. It is only after all these process that production starts. For us this means that from first conversation to production is typically three, four or five five years, and it can even be as much as seven!

"The kind of custom products that Zettlex is starting to make in volume now are from projects that the company has had in the pipeline for several years. During the development period we might make one, five, half a dozen. But when it hits production, then we're talking about hundreds. So the money involved gets much bigger."

Patented technology

Throughout this type of product development Zettlex's patented technology remains the same. "What we are typically having to do is take that basic technology and provide a format that is specific to the individual customer's particular application – be that a pressure gauge, a flow meter, an actuator, or a motor control system. We are changing the peripheries, we not changing the fundamental technology, so it's customisation, really," says Howard.

With the 'custom' side the business well established, four years ago Howard and Kreit made the decision to enhance the company's offering and develop a range of standard products. The resulting Incoder is a non-contact, high-precision inductive encoder, the performance of which is unaffected by humidity, moisture, condensation or dust. Described by Howard as "tough as old boots and ridiculously accurate", the range is particularly suitable for use in harsh environments.

Unlike most traditional encoders, which are of a cylindrical block design, the Incoder comes in the form of a flat ring. "The cylindrical block is ideal for the traditional transformer winding approach, but because we wanted this to be a high precision, very robust but compact product, we went for a printed circuit board, flat-ring approach," says Howard.

"This flat format offers design engineers all sorts of opportunities in terms of routing all their electrical cables, hydraulic cables, fibre optics and gear boxes through the middle of the sensors."

Installation benefits

There are also benefits in when it comes to installation. Traditionally, it takes a lot of skill and accuracy to properly set up a high-precision sensor. With the Incoder range it is possible to construct a system much more simply, using nuts and bolts, and still achieve a very high degree of precision. And it is this precision, combined with the fact that it is achievable in the most arduous of conditions, that makes the Incoder range really stand out.

"The technology is stable and it doesn't go wrong – this is a really big factor for us," says Howard. "If it gets wet or dirty or knocked about, it doesn't come up with a reading that may or may not be accurate. If it's given an answer, the changes of that being wrong are infinitesimally small. This is reflected in our logo: 'precision in the extreme'."

This very much ties in with Zettlex' Mittelstand philosophy: to be technically specialist and carry out that specialism all over the world. Howard sums up the company's specialism as "measuring positional speed very accurately in all sorts of difficult conditions and making sure that the answer's right". This specialism is increasingly finding application across a wide range of sectors. Medical, defence, aerospace, industrial, oil and gas, and motorsports are all areas in which Zettlex has as strong foothold, in countries worldwide.

According to Howard, in the UK and Western Europe as a whole, less sophisticated engineering is undergoing what he refers to as a managed decline, while growth areas are in more sophisticated and higher spec applications – markets that Zettlex is in a strong position to take advantage of.

"Today the demand is for ever more accurate, ever faster and ever smaller sensors," says Howard. "Every project we do, we will always try and incrementally improve the performance of the technology. What we are doing now is way beyond where we thought we'd be doing ten years ago. If you'd said to me when we started this business, that we would achieve the levels of levels of performance that we're getting to, I just wouldn't have believed you."