Scottish Enterprise helps businesses generate £107m of efficiency and productivity savings

Businesses helped by Scottish Enterprise (SE) are projecting efficiency savings and productivity improvements over the next three years of £107 million. Three quarters of this (£81 million) comes from manufacturers working with the Scottish Manufacturing Advisory Service (SMAS).

This is the most value that SMAS has generated for Scottish manufacturers since it was created 10 years ago. The remainder of the efficiency and productivity gains come from various services Scottish Enterprise provides to non-manufacturing companies to enhance their competitiveness.

The results, taken from the enterprise agency’s 2014-15 annual results, have been achieved from activity that SMAS undertakes with Scottish manufacturers. Between April 2014 and March 2015, SMAS provided 322 manufacturing reviews to Scottish manufacturers to help them understand where improvements could be made to their business.

These reviews have so far led to 203 business improvement projects being completed which cumulatively have efficiency savings and productivity gains valued at £81 million over the next three years.

Deputy First Minister John Swinney said: “Manufacturing underpins the success of our whole economy so I welcome these fantastic results, which are down to the hard work of the dedicated SMAS team and the ambition of our manufacturers to grow their businesses. SMAS is helping businesses improve production processes, so they reduce costs, boost competitiveness and improve productivity – all this ultimately leads to sustainable growth.”

Business improvement projects are tailored for each company and involve working alongside staff and management to provide intensive assistance and expertise. In the last year, business improvements projects have evolved to meet the changing needs of Scotland’s manufacturers.

Projects have moved away from short-term solutions designed to deliver immediate gains and instead now focus on more complex, strategic projects that embed a culture of business excellence. This approach leads to higher productivity levels and increased global competitive advantage for businesses.

More Scottish businesses are recognising the significant benefit of sustainable continuous improvement and are looking to combine improvement tools and techniques with cultural and behavioural change. Maximising the skills and talent of people enables companies to exploit new opportunities and continually innovate.

Adrian Gillespie, Managing Director of Growth Companies, Innovation and Infrastructure at Scottish Enterprise commented: “By helping companies increase efficiencies and productivity, we can free up their time, resource and investment to add capacity, develop new products and find new markets at home and internationally.

“With £81 million of improvements coming from manufacturers, it highlights that manufacturing remains critical to building and maintaining Scotland’s global competitiveness.

“Manufacturers produce 60% of Scotland’s exports and business R&D spend, and we’re seeing steady growth in Scotland’s manufacturing exports, with a 2.7% rise over the last year. However, we can’t be complacent. We want to work with more companies that are ready to realise the rich seam of growth opportunities globally.”

One company that SMAS has recently worked with is Livingston-based Shand Cycles, a manufacturer of hand-built custom bicycles. The business has five members of staff including business partners Steven Shand and Russell Stout. The company produces various adventure touring bikes including mountain, off-road and road models.

The manufacturing process takes place in-house at the company’s workshop. Recent growth encouraged the business to rethink its manufacturing processes in order to cope with increasing numbers of orders. Cash flow issues also had to be dealt with as a result of high levels of funds being tied up in stock.

SMAS worked alongside the company in a series of informal half-day sessions to map out the complete manufacturing process. This allowed them to point out areas where waste was also produced.

As a result of the project, the capacity of the workshop has doubled, allowing the company to expand its workforce while maintaining profitability.

Russell Stout, Company Director at Shand Cycles, said: “The assistance from SMAS has put us in a good position to cope with the increase in sales that we continue to experience.

“We’re a small business who wanted to grow in a sustainable and effective manner and with support from SMAS, we have achieved that.

“We don’t have a large workforce that we can commit lots of staff to hours of training which SMAS appreciated and worked around. The informal and flexible approach SMAS were willing to take to work with us was especially valuable.”

These figures follow last week’s launch of a new industry-led strategy for Scotland’s life and chemical sciences sector that calls on UK and global manufacturers to recognise Scotland as an ideal European base.

The life sciences sector is seeking to double its turnover to £6.3bn by 2020, while the chemical sciences sector is aiming to increase exports by 50% from £3bn to £4.5bn by 2020. Over the past three years, life and chemical sciences companies in Scotland have committed almost £1 billion towards expanding their manufacturing facilities.

The focus on manufacturing continues with a conference taking place in Aberdeen on 27 October 2015 that will bring together leaders from offshore oil and gas with other key manufacturing sectors. The event will explore how manufacturing sectors have adjusted to changing markets by focusing on enhancing value and minimising waste. Scottish Manufacturing Advisory Service and Oil & Gas UK are hosting the conference, which is open to any business working within the oil and gas supply chain, including primes.

The top three sectors accessing SMAS support and making efficiency and productivity improvements as a result are:

• Food and Drink with £17.4 million of improvements over the next three years
• Energy with £14.4 million of improvements over the next three years
• Aerospace, Defence, Marine and Creative Industries with £10.5 million of improvements over the next three years