Interview I Axiom Manufacturing Services
Staying focused
Neil Tyler talks investment, cost management and the development of advanced engineering skills with Paul Murphy, the Commercial Director at leading contract manufacturer Axiom Manufacturing Services
Located in Newbridge, South Wales, Axiom Manufacturing Services is one of the fastest growing Contract Electronic Manufacturers in the UK and manufactures printed circuit board electronics and electromechanical assemblies for the aerospace and defence, medical and high-end industrial markets.
Over the past few years it has seen significant growth driven in no small part by its commitment to delivering design, manufacturing and value added services to its growing list of customers. Axiom has spent time and money both developing and strengthening its design and development teams recently adding a prototyping centre. All of which is underpinned by internal quality and delivery metrics. “We’re continually developing and refining our value proposition, technical differentiators and performance to meet the needs of our customers in an increasingly demanding market place,” explains the company’s Managing Director David Davies. “It’s all about adding value to our customer’s businesses’’. Throughout 2013 the company has been focused on refining and adapting its business model to work with its customers and to help them develop their own technology and manufacturing roadmaps.
Most of the company’s growth over the past few years has come organically and that has been helped to a large extent by having the right people with the right skills in place and this has been supported by Axiom’s commitment to running apprenticeships. Recently it appointed three apprentices for a hands-on engineering career and is leading the call for industry to raise the profile of manufacturing among young people.
Axiom started its apprenticeship scheme back in 2011 to help kick start careers in the electronic manufacturing industry and to address the on-going debate surrounding overly negative stereotypes that many feel hamper the sector‘s long term growth. According to Davies apprenticeships ensure that Axiom’s workforce has the practical skills and qualifications in place that the business needs, while also ensuring its long term sustainability. CIE spoke with the company’s Commercial Director, Paul Murphy, to find out how the company is looking to build on its success at a time when the economy appears to, perhaps, have turned a corner and started to build the momentum needed for a sustained recovery going into 2014.
N
eil Tyler: Confidence seems to be returning to the manufacturing sector. Are you more or less optimistic about the next 6-12 months, and what risks are there to economic recovery?
Paul Murphy: While it is important to remain focused and not become complacent we continue to be optimistic and positive about the outlook over the next 6-12 months and indeed beyond. Over the last 4 years we have experienced significant year on year growth. This has been achieved by focusing on adding value to our customers at all levels of their supply chains. Through 2013 we have
28 December 2013/January 2014
continued to refine and adapt our business model to ensure that it continues to differentiate us in what is a fairly saturated market place. Given that focus and continued re-investment in the business we would expect a further 10- 15% growth over the next three years. From a risk perspective our growth
comes from our customers, if they are growing we grow with them. While it varies from customer to customer and market to market, I would say that in general their outlooks remain fairly positive. They do however remain concerned about the impact of political and economic conditions overseas on external demand, reflecting on-going
Components in Electronics
uncertainty about the global economic outlook (a significant amount of our customer’s goods are exported). While our customer and market diversity gives us some level of protection to immediate economic swings, if that concern continues over the next 6-9 months then it may manifest itself in weaker demand. The CBI recently highlighted the fact that SME’s account for 99.9% of private sector companies and provide 60% of private sector jobs. These businesses have a significant role in driving growth and creating jobs. It’s important that policy makers who often overlook this fact do more to recognise this and put the relevant support in place to help them achieve that potential. Be that simplification of cumbersome regulation, tax/rate breaks or simply access to finance. Axiom is in a strong position in that financially we have been able to self-fund our growth, but even today with all the focus, I still talk with SMEs who struggle to get the financial support they require to innovate and grow.
NT: What are customers looking for when working with CEMs?
PM: Customers are looking for their manufacturing partners to add value to their supply chains, to help them deliver a sustainable competitive advantage through innovative solutions at a competitive cost. However in reality, what our customers expect from us is really no different from what we would expect of our own supply chain. That said each customer is looking for something slightly different, usually driven by individual USPs and end market drivers. A CEM’s ability to adapt to those
different needs across a broad customer base is what ensures their success. It’s about focus; you can’t be all things to all people, so understanding what makes you successful in a particular market or with a
particular customer and building on that model with parallel customers in parallel markets is key. At Axiom for example, over 50 per cent of our growth over the last 4 years has been organic, and a significant amount of new business has come from customers operating in similar industries to our existing clients.
NT: What cost challenges are you faced with?
PM: I was wondering when we were going to get to this one! We, like our customers operate in an extremely demanding and competitive market place, so, like any other company in the UK we will continue to face cost pressures from many different perspectives. Rising energy, transportation and raw material costs continue to have an impact. Not only this,
Paul Murphy
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