Manufacturing and Engineering North East kicked off in July at Newcastle’s Metro Radio Arena, attracting in excess of 1,300 to the two-day inaugural event. Around 100 exhibitors filled the regional venue, with a walk around the show floor complemented by workshop and conference sessions covering investment and finance, automation and robots, 3D printing and more.
Getting your hands on money to acquire manufacturing technology and more was dealt with by Lombard and NatWest, both part of RBS, and also, perhaps surprisingly, ERP specialist K3Syspro.
Graeme Briggs, director of asset finance at Lombard (www.lombard.co.uk), explained asset finance. Described as a ‘loan’, it is more properly described as a ‘term product’ that can be used to acquire assets such as machine tools, but this can also include intellectual property or even LED light bulbs for a factory. The nature of this term finance can be hire purchase (HP), where ownership resides with the user after a defined period of time, or a lease, where ownership typically returns to the lender. HP attracts annual investment allowance benefit, but for companies that have already fully used that, other finance products offer alternative tax benefits, Briggs states.
But why use asset finance as opposed to a bank term loan or overdraft? To minimise ownership risk, perhaps, in the case of a contract of a set number of years that may or may not then be renewed. “Why not lease the asset for three years and hand it back and let us take the residual value risk,” suggests Briggs.
OFFERING CHOICE; THREE, IN FACT
He also points out that Lombard offers flexibility through its ‘triple choice’ product – the option to buy at a pre-agreed sum at the end of the lease; the option of refinancing the residual value; or handing it back to Lombard.
This issue of residual value is interesting. Just as with cars, a more expensive model can be less to lease than a cheaper model, due to the former’s higher residual value. It can work for machine tools, too.
Releasing cash from existing assets is another service offered by Lombard, via invoice financing, with this taking in factoring, invoice discounting and asset-based lending. Mirka Skrzypczak, head of product and client proposition, explains: “This allows companies to grow by leveraging their current assets.” But, once again, why use it? To finance the gap between investment in a productive asset and receiving cash from its output, perhaps. Asset-based lending allows companies to accelerate payment against outstanding invoices or release cash from existing assets. Cashflow impacted by seasonal fluctuations may be smoothed this way, while the establishment of overseas operations may also similarly be financed. So, a broader view of what can be financed was, perhaps, the central point to take away here.
Laurence Sweeney, trade director North East at NatWest (www.business.natwest.com), spoke about export finance, importing capital assets such as machine tools, as well as tooling finance. Bridging the gap between producing/selling/exporting and receiving payment or paying for and receiving an asset, as well as managing currency fluctuation were areas addressed.
Turning to a specific example employing capital import finance, Sweeney highlights an engineering company that imported a machine tool from Spain. Based in Derbyshire, AIM Engineering specialises in the manufacturing of jigs and fixtures for the motor and aerospace industries. To build its capacity and win more business, the company decided to acquire a 5-axis milling machine from Nicolás Correa SA, at a cost of £830,000.
The supplier required a deposit of up to 25% up front, which was difficult to achieve via working capital. Explains Sweeney: “We suggested using a deferred payment letter of credit solution, so that the supplier would be guaranteed upfront payments at agreed milestones, while AIM would only need to pay 10% of the contract value in advance and 10% on completion. The remaining amount would be met through a lease purchase arrangement with Lombard, allowing AIM to spread this cost over the length of the agreement – and keep growing.”
A benefit of capital import finance is that better purchasing terms may be possible, he adds, and although the example given here is an import situation, he says the same financing model could apply for a machine purchased from a UK supplier, in fact.
Moving to tooling finance and Midlands-based DMS, a leading manufacturer of electro-plated components for automotive interiors, won major orders for new Jaguar Land Rover (JLR) models that required it to tool up and, as is standard practise, DMS to pay up front for specialist tooling. Although the cost will be reimbursed once vehicle production is up and running, this is typically 12 to 36 months after the original order is placed, creating a funding gap. Tooling finance addresses this, and DMS received £250,000 to support the purchase of specialist tooling.
In general, tooling finance will cover up to a maximum of 80% of the value of the tool, offering between £20,000 and £1,500,000 for a period of up to 56 months. And while predominantly employed in the motor industry, those in other sectors can benefit, too.
INVENTORY IS CASH – GET SOME BACK
David Waller, head of value engineering at ERP specialist K3Syspro (www.k3syspro.com), also spoke about finance, but from the angle of a company able to release cash from inventory by better management through adoption of ERP. The reduction of inventory is one of the most common benefits of the installation of such a system, he advises, adding that regardless of company size: “It is rare that we cannot realise cash from inventory.”
As for hardware that you’ll have to pay some of this released cash for, Fanuc UK’s (024 7663 9669) regional sales manager for robots, Sean Murphy, highlighted a particularly interesting case where a company had reduced the cost of robot automation by making some of the hardware itself. ALM Products in Newton Aycliffe, County Durham, manufactures changing room furniture and realised it could make its standard parts unmanned overnight by automating its existing Fanuc Robodrill machining centre and, in so doing, release capacity to support subcontract machining during the day.
The cost for a turnkey robot automation installation at about £75,000 was initially considered prohibitive, but Murphy suggested that, as an engineering company, ALM could make some of the elements, such as the robot location base. The upshot was that, for a Fanuc M-10iA robot plus some additional Fanuc services, the investment was £45,000. Able to boost turnover by 40%, the company achieved an 11-month return on investment.
In another example, Murphy instanced two machines connected by a Fanuc M-710iC robot. Requiring a capital cost of £85,000 but supported by a five-year lease of £1,800/month, increased productivity, reduced labour and overnight running contributed to a return on investment of 24 months.
Finally, no manufacturing exhibition or conference is complete these days without some mention of 3D printing or additive manufacturing, and Materialise’s Iain Hill, account/new business development manager (01143 997 845), provided an eye-opening presentation about his company’s production part capability. Headquartered in Leuven, Belgium, the 1,250-plus-employee company boasts “the most complete factory for 3D printing”, having all technologies under a single roof and featuring over 120 machines. It is the largest 3D printing factory in Europe and one of the three largest worldwide, Hill underscores. Materialise backs this manufacturing capability with its own software and offers engineering services to guide potential users.
PRINTED GRIPPER HAS MANY BENEFITS
Examples of production parts included the manufacture of an end-effector for a high speed packaging robot that picks and places parts using suction pads; the customer was Intrion. Previously made from aluminium and featuring multiple nozzles connected to various pneumatic pipes, a plastic unit incorporating internal pipe galleries and locations for electronic components resulted. The 3D-printed item uses 42 fewer parts, slashed costs by 70%, is one fifth the weight and can be moved faster, plus the design can easily be updated to take advantage of changing technology. A web-based parametric design system supports customer ordering of a variety of end-effector designs.
More familiar to Machinery readers will be Schunk robot grippers. Working with Materialise, the company launched eGrip, the world’s first ordering platform for 3D-printed grippers (http://is.gd/xIDGsC). eGrip is a browser-based, licence-free application to create and order tailor-made gripper fingers. Users upload STEP or STL data of the part to be gripped and then add specific information such as weight, gripper base, mounting direction and relative position of the part to the gripper. The software automatically configures the gripper fingers around the part, generating the optimal finger design, immediately giving price and estimating delivery. Fifteen minutes of user time plus this web software save eight hours of Schunk engineering time per gripper. Materialise prints and despatches the part upon order.
For those that missed this year’s MENE show, make a date to see and hear next year, 6-7 July, at the Metro Radio Arena, Newcastle.
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AROUND THE SHOW, IN BRIEF
Fanuc UK (024 7663 9669) had an operational Robocut Alpha CiA wire-cut EDM machine performing high precision machining, while a Robodrill Alpha D21LiA5 CNC cut an aluminium turbocharger impeller, employing 5-axis cutting supported by a 2-axis Nikken trunnion turntable (01709 366306).
CNC Rotary (0870 061 9000) had a few refurbished Nikken rotary tables on sale on the stand. Speaking immediately after the show, commercial manager Mike Waller said that the company sold a Nikken table and was chasing up a few promising leads generated at the show. The company also supplies refurbished Peisler and Fibro tables, and new units from Ganro of Taiwan and Zeatz of Spain. A new e-commerce portal is on its way, Waller reveals.
Tyrolit (01788 823738) offered information about a new range of Startec XP-P grinding wheels for working HSS and tungsten carbide milling cutters, as well as tungsten carbide drills. The cutters are available in diamond or cubic boron nitride (CBN).
Yamazaki Mazak (01905 755755) demonstrated 5-axis machining of a turbine blade from 102 mm diameter carbon steel solid bar stock on an Integrex i-100 Bartac-ST turnmill. The half-hour job was performed in a single hit. First, the end profile was machined on the main spindle; then the blade profile was rough milled helically using 4-axis simultaneous milling (with tail support from the lower turret). Then the machine transferred the component to the second spindle, parted it off with an end-mill and machined the blade end with a second end-mill. Maximum swing on the machine is 530 mm diameter and its main chuck supports 4-inch bar capacity. The machine draws tools from a 72-space chain magazine.
Measurement Solutions (01733 325252) showed Creaform VXmodel software that now has an ‘autosurface’ feature. This software makes it easier to simplify imported 3D models. In addition, VXinspect was shown. This allows the easy comparison of dimensions of a scanned object – perhaps using its 14-laser HandySCAN 3D scanner – with a CAD model. Deviations are shown in false colour, and the software can automatically generate a geometrical dimensioning and tolerancing report.
