How a Coventry foundry has reinvented itself for the electric future
The advent of ACES (autonomous, connected, electric, and shared vehicles), as well as the slump in volume resulting from the Covid-19 pandemic, is causing unprecedented upheaval in the automotive industry. Companies producing diesel vehicle systems and components will already be familiar with the impact of a sudden drop in demand of long-established products, and it’s time for the whole supply chain to wake up. If ever there was a time to talk about ‘survival of the fittest,’ this is it!
At Industry Forum, we work with the automotive supply chain to understand the impact of such a seismic shift to the UK. If companies do not make the right products, any competitive advantage they currently enjoy from efficient manufacturing operations will be irrelevant. We have tended to see government funds prioritising new technology start-ups over established, well-run manufacturing businesses. While investing in UK innovation and sourcing ideas from outside the industry is a good thing, it should be remembered that those manufacturers alive and well in today’s tough environment have already proved themselves capable of the hardest part: commercialising new technology into serial production.
What sets one UK automotive supply chain manufacturer company apart from another in our new world is the ability not just to embrace change, but to actively influence it.
One business that is doing just that is Sarginsons Industries, with whom Industry Forum has worked for many years. Sarginsons could have been a poster child for the vulnerable automotive Tier 1 manufacturer: a traditional Coventry foundry, making aluminium castings, including internal combustion engine parts, for companies such as Jaguar Land Rover, Caterpillar and ZF. Instead, under the leadership of managing director, Anthony Evans, it has transformed itself into a diversified OEM solutions provider and electric vehicle (EV) technology backer. It has recognised the rise of the start-up and leveraged its position as an established, lean manufacturer to plug some obvious gaps. Times have never been better!
At the beginning of 2020, Sarginsons announced a new contract with start-up Char.gy, to develop revolutionary on-street charging points (charging bollard units or mounted to lampposts) for electric vehicles. Sarginsons supply the full unit to Char.gy; not only the aluminium castings but the internal assembly, including electronics, as well as the charging sockets. The companies are currently working together on new concepts for vehicle charging, which will be launched soon.
Anthony Evans believes SMEs should break down traditions and find new opportunities: “With no new diesel or petrol cars in the UK from 2030, the disruption is palpable. It’s creating newer and much smaller manufacturers, with bigger OEMs breaking down into smaller companies too. A larger pool of people to sell things to has to be a good thing. It remains to be seen how the industry will get the vehicles ready by the ever-encroaching government deadlines. Everybody is just busy creating ideas. Sarginsons wants to be the company taking those ideas and building the prototypes. The new customers are very very different!”
Anthony Evans has identified four main ways in which SME manufactures can fight fit in this rapidly changing environment.
- Develop an investor mindset
“Sarginsons got the Char.gy contract because we were prepared to make a bold decision to invest in the idea of a disruptive start-up company, via our own facilities,” says Anthony. “What they were lacking in order to bring the products to market, we either had already, or knew how to put in place, and quickly. This included design-to-manufacture capability, tooling, electricians, production facilities and most importantly, equity.”
The EV charging socket was a new challenge for Sarginsons, but something they knew they had to take on. Anthony explains, “Assembling an electrical package, bolting it into the bollard and undertaking all the testing of it, was different for us. But as a manufacturer, we’ve got far more qualified electricians than any of these people will ever have. So, we said, yes, we can do it and with our internal electrical knowledge, we did.”
New entrants have little equity behind them to get their ideas into production. Sarginsons, while not significantly cash rich or backed by a plc, had sufficient capital to lay down the tooling, buy in the electrics, and help get Char.gy up and running.
“After making the decision to go for it, speed and flexibility was of the essence, if both parties were going to realise the benefits of being early to market. There was absolutely no point spending months developing a legal framework with Char.gy; it required a different way of thinking. We had our initial investment paid pack after orders for the first 90 bollards and 250 lamppost attachments,” reveals Anthony.
- Infiltrate the supply chain
The Sarginsons team is much hungrier for business these days, with the confidence of a revitalised ‘can do’ attitude. Anthony explains, “We’re now working even further down the supply chain, speaking to the designers. We’re not waiting for the purchasing people to knock on our door.”
This means developing new relationships with established customers and making friends with new companies. “We’re supporting them with design-to-manufacture and getting ourselves involved with programmes as early as possible. A recent example of this is our involvement with an InnovateUK ARMD programme to design and develop EV chassis applications for Lotus Cars, as well as new concepts for battery tray and chassis architecture. We no longer say “that’s the bit we can do, you’ll have to talk to someone else about the extrusion” or whatever. We are bolder,” says Anthony.
Sarginsons is taking a big picture approach to the market. “Our business strategy is to support vehicle OEMs who want to sell EVs, but the consumer demand is never going to happen if there is a shortfall in charge points. We see ourselves as a key enabler in the chain.”
Sarginsons has created a new technology centre, a more customer-focused presentation of its market offer, equipment and capabilities in a dedicated area of the factory. This was assisted by a grant from Coventry and Warwickshire Local Enterprise Partnership (CWLEP) and the European Regional Development Fund (ERDF) as part of the Coventry City Council Business Support Programme.
“With the creation of a technology centre, we’re not inviting our customers to visit a foundry, we’re inviting them to a design house. We are also working in collaboration with universities and research centres to ensure we are at the cutting edge of research and development,” says Anthony.
Capital investments have also been made metallurgical, metrology and automation programmes and Sarginsons took the opportunity to strengthen its MagmaSoft modelling capabilities, with online coaching and the investment of £100k in a MagmaStress stress seat and further MagmaSoft technology.
Modernising is also about cultural change, external branding and communication, as well as investment in new facilities and machinery. Anyone looking from the outside in to Sarginsons over the past couple of years will have witnessed a significant transformation, from the revamped website to a rebrand and fresh corporate positioning as a “leader in lightweighting.”
- Focus on competitiveness
Sarginsons no longer accepts the traditional role of an SME manufacturer as a production facility in a defined automotive supply chain, where business improvement effort is limited to increasing efficiencies between the points of its inputs and outputs. This focus on overall business competitiveness, as opposed to simply productivity, is reflected in the government’s new National Manufacturing Competitiveness Levels (NMCL) funding programme. The difference between this programme and others designed to improve manufacturing supply chain performance is the focus on building capability to win new orders.
Industry Forum is an NMCL assessor and improvement provider and has helped many companies through the assessment stage of the programme. Anthony is encouraged by what he has seen of NMCL, “The previous equivalent government support programme, LTASC, was more internally focussed. It allowed us to undertake a lot of fundamental lean and problem-solving changes, as well as team leader and shop floor management training. We’re now ready to build on that. We’re hoping to use NMCL to better push lean and supply chain project management and allow us to step forward into the bigger and bolder world.”
To find out how you can join the NMCL programme, contact us.
Authored by: Richard Sadler, director of business development at SMMT Industry Forum
Richard has over 15 years of Tier One automotive manufacturing and supply chain experience. Having started his career as an Apprentice, he soon went on to hold leadership positions in Production Planning, Purchasing, Engineering and Manufacturing. Richard’s last role was Operations Director of an Automotive Tier One, serving multiple OEMs both in the UK and overseas.