by Kim Thomas

Manufacturing sector struggles, but some IT innovation remains

Oct 10, 20116 mins
IT StrategyManufacturing Industry

It’s been a bad summer for BAE Systems, which is to cut 3,000 jobs. Most of the job losses will be in its military aircraft division, which, the company said, is being affected by a slowdown in orders for the Eurofighter Typhoon combat jet. In the meantime, the Financial Times reported, “the Typhoon consortium is searching for further export orders beyond Austria and Saudi Arabia, the only other countries who plan to operate the jet”.

The company is now trying to find “new, non-military” applications for its technology bank, an approach that has been successful for companies IBM, Siemens and Thales. “Any move by BAE to try to ‘seed’ more technology ventures outside the company would fit in with government efforts to promote more UK-based high-tech manufacturing ventures,” the FT said.

BAE Systems signs Siemens PLM deal for controversial Trident submarine design

Despite the bad news for Typhoon, BAE is still contracted to develop new Trident nuclear submarines for the Royal Navy, though a decision as to whether construction will go ahead has been postponed. Computerworld UK reported that the company has signed a contract with Siemens for product lifecycle management (PLM) software, which will be used in the development of the submarines. “The system will serve as BAE Systems’ global collaboration platform to manage all engineering and product data within a single system. It also provides real-time access to design, analysis and simulation,” the report said.

The news for car and engine manufacturers is brighter. Jaguar Land Rover is to invest £355m in building a factory in Wolverhampton, which will employ 750 people, and will be backed by £10m of funding from the UK government. The firm has been boosted by strong demand from emerging markets such as Russia and China for its cars, reported CFO World UK. The new factory will, according to the Financial Times, “supply engines for new vehicles made under the Jaguar, Land Rover and Range Rover brands.”

Jaguar Land Rover hit the Google Apps road

Indian-based Tata Group, which now owns both steel manufacturers Corus and Jaguar Land Rover (JLR), announced first quarter profits in August three times higher than the same period last year. Tata cautioned, however, that “prospects in the US and Europe are deemed uncertain in light of their respective public debt issues.”

In a feature on what it calls “the new special relationship”, the Economist praises the Tata Group’s success in revitalising Corus and JLR. In both companies it has found skills that it is able to inject into its other businesses, not only in India but in the other 79 countries in which it operates. “Ford and BMW failed to make Jaguar or Land Rover profitable, when Rover Group collapsed. Tata has succeeded in turning both around,” the paper said.

The outlook for the BMW owned Rolls-Royce car manufacturer is also positive, according to CFO World, which reported that it expects to sell more limousines this year than ever before. The luxury car market remains resilient, the magazine added, quoting CEO Torsten Mueller-Oetvoes as saying, “We are dealing with people who are unusually wealthy and never really have to ask themselves, can I still afford this or not?”

The Financial Times reported that engines and engineering experts Rolls-Royce has agreed a deal with Rosatom, Russia’s state nuclear company, to co-operate in nuclear power – an agreement that will apparently help Rosatom win foreign nuclear power orders.

US owned global vehicle manufacturer Ford, meanwhile, has teamed up with Toyota to set standards for telematics in high-tech cars, according to Computerworld UK. They will use the standards in their own respective products, such as the Ford MyFord Touch, a dashboard that provides multimedia, navigation and connections to the internet, and Toyota’s Entune, which uses a Smartphone or feature phone to deliver a variety of apps into the car, all controlled by the voice of the driver.

Alstom, the French train manufacturerhas pulled out of the race to provide trains for Crossrail, the new east-west line across London, because it lacked a suitable product for the work. “We consider that the necessary adaptation of our existing products in service in other countries is incompatible with both Alstom’s strategy for profitable growth and Crossrail Ltd’s requirement for minimal development costs,” a company spokesperson said.

In common with many other manufacturers, Unilever is now focusing its efforts on the emerging markets. Unilever takes “a dim view of growth prospects in the euro zone and the US.” Unilever’s chief executive, Paul Polman, is quoted as saying that “Europe and the US will be, for the next 10 years, low growth territories” and that the company expects to have 75 per cent of its turnover in emerging markets by the end of the decade.

Unilever’s chief supply chain officer, Pier Luigi Sigismondi, told CIO that the company is to stop focusing on cutting costs and to concentrate instead on “developing a business and demand-driven value chain”. It will use data about the availability of products on shop shelves to reduce waste and contribute to a growth in profitability. In order to access point-of-sale (POS) data, and to have better insight into its inventory and demand, the company is currently rolling out demand-sensing software from supply chain solutions provider Terra Technology. By using data about what the retailer sells to the customer, rather than what Unilever sells to the retailer, Sigismondi told CIO, the company is able to make more accurate forecasts.

Unilever: On-shelf-availability data key to profit growth

The pharmaceutical company Sanofihas announced a strategy “designed to bolster investor support on the back of greater diversification and fresh efficiency savings”, according to the Financial Times. The company has promised to raise sales and earnings by at least five percent a year from 2012. At the same time, Sanofi is one of a number of pharmaceuticals to cut prices to poor people in emerging markets, the paper reported. Sanofi, which has found that poor patients in Senegal were paying more for some of its products than their counterparts in France, has developed a “next billion consumers” programme that aims to tailor the company’s prices and drugs to “better suit local income levels and needs”.