The UK has the capability to take advantage of a global market for through-life engineering services (TES) worth £1 trillion by 2025, but it must act now or risk being left behind, says a consultation paper from EPSRC.
The research paper published by the Engineering and Physical Sciences Research Council's (EPSRC) Centre in Through-life Engineering Services said that TES - the branch of engineering that addresses the needs of high-value products and systems from conceptual design all the way to end of life, such as aerospace engines and trains - are strategically important to the UK with a domestic market worth from £30 billion to £40 billion annually over the next few years.
A national initiative to define ways that the UK can capitalise on this global market was debated at a Houses of Parliament conference involving leading engineering organisations including Rolls-Royce, Bombardier Transportation, BAE Systems, Babcock International and the UK Ministry of Defence.
Speaking at the event, Professor Rajkumar Roy, director of the EPSRC Centre for Innovative Manufacturing in Through-life Engineering Services and head of the manufacturing and materials department at Cranfield University, noted that the UK already has world-leading expertise in through-life engineering services, with more than 6,000 British firms involved in such support activities employing some 107,000 people in the UK, and strong R&D activity also taking place in the field. However, to date it has only a five per cent share of a global market approaching at least £1,000 billion by 2025.
TES addresses the needs of high-value products and systems from conceptual design all the way to end of life, such as aerospace engines and trains
Roy said: “We believe if we can all work together in the UK we can grow manufacturing and take a bigger share up to 8% of market share by 2025. That should be our ambition.”
The research paper noted that engineering services provide high value jobs with wages averaging £42,000 per year, some 50% higher than the manufacturing industry average. It also claimed that companies adopting a through-life approach to the design of products are able to save millions of pounds in maintenance costs and support industrial sustainability by reducing waste.
Other benefits include development of the UK supply chain and creating new revenue from services, such as offering life-time maintenance for a product, with some manufacturing companies already generating over half of their income from such services, the report said.
These “product service systems” are becoming a pervasive manufacturing and engineering business model worldwide as customers seek to de-risk their expensive purchases and improve their assets’ maintenance and lifespan. A current example is Rolls-Royce's “power-by-the-hour” service whereby a complete engine and accessory replacement service is offered on a fixed-cost-per-flying-hour basis.
Dave Benbow, global head of engineering for services at Rolls-Royce, said: “The power-by-the- hour in the sky crafts a whole new engineering approach. We are now choosing components differently, not necessarily just the cheapest.
“We are seeing a move to servitisation, and with the current scarcity of resources we will see the same thing happen with automotive. It isn't just about building, using and chucking away. Will see a dramatic shift in established industries that will completely change the way manufacturing operates.”
Dick Elsy, chief executive of the High Value Manufacturing Catapult, added: "The value in high value manufacturing is increasingly in the provision of services surrounding the product. There are big opportunities for the UK to exploit new value streams with the guidance provided from a national strategy.”
The paper calls for a collaborative national approach to engineering services to improve engineering and manufacturing productivity, innovation and competitiveness. The conference showed that these large OEM companies, such as BAE Systems, are engaged with mid-sized and smaller companies to develop strength in depth across the engineering services’ supply chain, and wish to develop these links further to realise efficiency savings.
Benbow said: "Collaborative development of capability in through-life engineering services will be key to future success in a world where technical innovation is demanded in both products and services.”
A national, strategic approach to engineering services is expected to be developed by late-2016. It will aim to deliver performance improvements in these services over the following three to four years. Development of new formal standards to assist in understanding and sharing best practice in the field will be a key element. The British Standards Institution (BSI) will be supporting the initiative and expects to hold an initial conference in February 2016 to address the scope of new “framework” standards.
The consultation has been sponsored by the senior industrial partners of the EPSRC Centre for Innovative Manufacturing in Through-life Engineering Service (TES), which are Rolls-Royce, BAE Systems, Bombardier Transportation and Babcock International, with the support of many other organisations including the government.
Roy said: “There is presently no clear national focus for through-life engineering services, without which we will lose sight of the opportunities that others will exploit. Industry and government need to do more to change their thinking to capture more value from TES.”