Opportunities for Greater Lincolnshire Supply Chains
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OPPORTUNITIES FOR GREATER LINCOLNSHIRE SUPPLY CHAINS FINAL REPORT March 2012 Undertaken by: Lincoln Business School University of Lincoln Brayford Pool Lincoln LN6 7TS ADAS Woodthorne Wergs Road Wolverhampton WV6 8TQ Contact: Martin Hingley Direct Line: 01522 835683 Email: [email protected] Commissioned by the Lincolnshire Research Observatory on behalf of the Greater Lincolnshire Local Enterprise Partnership Opportunities for Our Supply Chains CONTENTS 3 Section 1 Introduction Section 2 Our Research Approach 5 Section 3 Supply Chains Concepts and Trends 8 Section 4 Greater Lincolnshire’s Trade and Export Profile 11 Section 5 Supply Chain Survey of Greater Lincolnshire 18 Key Sector Supply Chain Analysis: Section 6 Agri Food 25 Section 7 Engineering 36 Section 8 Manufacturing 48 Section 9 Renewables/Environmental Technologies 50 Section 10 Logistics 63 Section 11 Health and Care 77 Section 12 Discussion and Action Points 86 Appendices Interview pro forma 94 Supply Chain questionnaire 97 SIC to SITC conversion methodology 99 Supply Chain Survey results 100 University of Lincoln and ADAS 2 Opportunities for Our Supply Chains 1. INTRODUCTION Background 1.1 This reports sets out the findings of a study of the key sector supply chains in the Greater Lincolnshire economy. The report has been put together by a team of researchers at the University of Lincoln, ADAS and Rose Regeneration. This study has been commissioned by the Lincolnshire Research Observatory on behalf of the Greater Lincolnshire Local Enterprise Partnership (GLLEP). 1.2 This report directly relates to two further pieces of work commissioned by Lincolnshire County Council. These are: Learning from our Place in the Global Economy: to develop an understanding of Lincolnshire’s industrial make up and opportunities for growth and inward investment Opportunities for Innovation within Greater Lincolnshire Traditional Industries: a study to analyse current innovative practices within traditional industries, and identify barriers to and opportunities for innovation. Aims and Objectives 1.3 The principal aim of this research is to achieve a better understanding of Greater Lincolnshire’s major supply chains. The key objectives are to: (i) Obtain information from the key sector industries and map their supply chains; (ii) Identify local, regional and global links; (iii) Compare sector models and investigate the issues of local versus external supply chains; (iv) Identify interdependencies in the supply chains of our key sectors and those parts of the chain that are potentially vulnerable and pose a risk to the sector and the local economy as a whole; (v) Identify opportunities for cross sector co-operation; (vi) Identify how the public and private sectors along with the LEP can influence this area and what opportunities to access funding that can assist this process; (vii) Consider the health and care sector due to the opportunities for growth in both the service and manufacturing (goods, medical equipment, pharmaceuticals) supply brought about particularly through Lincolnshire’s growing and aging population. Introduction to the Project Team 1.4 This report has been produced by a collaboration of the University of Lincoln, ADAS and Rose Regeneration. The research team comprises: - Martin Hingley, Professor of Strategic Marketing at Lincoln Business School - Liz Price, Senior Research Fellow at Lincoln Business School - Gary Bosworth, Reader at Lincoln Business School - Gerrit Meerdink, Head of Department for Food Manufacturing and Automation, National Centre for Food Manufacturing (NCFM), Holbeach - Mark Swainson, Principal Lecturer, NCFM, Holbeach - David Lancaster, Business Manager – Food and Drink, ADAS - Vanessa Sturman, Sustainability Consultant, ADAS - Ivan Annibal, Visiting Fellow at Lincoln Business School and Director of Rose Regeneration University of Lincoln and ADAS 3 Opportunities for Our Supply Chains 1.5 The University of Lincoln has a long history of working with key sector businesses and representatives across the county, and has previously managed a number of similar studies in Lincolnshire and the East Midlands. 1.6 Lincoln Business School has conducted several studies of the local economy, including the Lincolnshire Economic Strategy 2008-2012. The University’s National Centre for Food Manufacturing at Holbeach engages with food and logistics companies across the local area for training and consultancy. The University also has strong links with the engineering sector, with its School of Engineering having recently been established in partnership with Siemens Industrial Turbo-Machinery. 1.7 ADAS is a science-based independent environmental consultancy. ADAS specialises in the agri-food sector, including horticulture, farming, food manufacturing, renewable energy, environmental technology, research and development. 1.8 Rose Regeneration is a Lincoln-based consultancy. Rose has a reputation for working with closely with local authorities in the fields of economic analysis, policy formulation, and community and rural development. Structure of this Report 1.9 The rest of this report is set out as follows: Section 2: Our Approach – sets out the data gathered and the method used for the study. Section 3: Supply Chain Concepts and Trends – introduces some of the supply chain concepts, and recent trends in supply chain management. Section 4: Greater Lincolnshire’s Trade and Export Profile – analysis of the Greater Lincolnshire’s key exporting activities. Section 5: Supply Chain Survey of Greater Lincolnshire – analysis of a quantitative survey of firms across Greater Lincolnshire, which explores supplier relationships, collaboration, and the geographical distribution of customers and suppliers in each sector. Sections 6- 11: Key Supply Chain Analysis – drawing on qualitative interviews, this section provides a detailed analysis of the supply chain linkages and interdependency in each identified sector, and supply chain vulnerabilities and opportunities for growth. Section 12: Discussion and Action Points – the opportunities and the influences and barriers for each key sector supply chain. This sets out the opportunities for the short, medium, and longer term, for consideration by the Greater Lincolnshire LEP Board. University of Lincoln and ADAS 4 Opportunities for Our Supply Chains 2. OUR APPROACH 2.1 This project follows directly from the ‘Our Place in the Global Economy’ project, which provides a baseline for our understanding of the key identified sectors in Greater Lincolnshire. While the ‘Global Economy’ study focuses specifically on analysis of secondary data, this research has used mainly primary research to develop a detailed understanding of supply chain issues from a local business perspective. 2.2 The research has been structured around the following five stages of activity: (i) Key Expert and Stakeholder Interviews (ii) Supply Chain Interviews (iii) Supply Chain Survey (iv) Supply Chain Focus Groups 2.3 Key Expert and Stakeholder Interviews: In conjunction with the ‘Our Place in the Global Economy’ study, a number of interviews with key sector representatives were undertaken at the start of the project. These included economic development policymakers, experts from the University and partner organisations, and key sector employers. The interviews were used to explore the factors affecting the key sector supply chains, interdependencies between supply chains, and priority areas for investment. Interviews were undertaken with: Laura Farr and Jackie Tulley, North Lincolnshire Council Helen Thompson and David Robinson, North East Lincolnshire Council Doug Robinson, Lincolnshire County Council Tony Hill, Lincolnshire County Council Neil Corner, Siemens Andrew Vaughan, Industrial Chaplain for Lincolnshire Mark Swainson, Holbeach Centre for Food Manufacturing Jill Stewart, Lincoln School of Engineering Phil Considine, Lincoln Business School (Healthcare) Jeffe Baker, Associated British Ports (ABP) 2.4 This stage of the research was also used to identify businesses within each of the key sector supply chains to approach for interview. 2.5 Supply Chain Interviews: the core component of the research focused on qualitative interviews with businesses to explore the issues affecting the supply chain members and leaders in Greater Lincolnshire. The sampling for the supply chain interviews was based on a ‘snowball’ method, whereby prospective business interviewees were identified initially through the expert interviews. Businesses approached for interview were then asked to suggest other businesses that they thought might be relevant for the study. These might be suppliers, customers, or firms that they work in partnership with. Businesses were also identified through existing University of Lincoln linkages, such as via the National Centre for Food Manufacturing at Holbeach and Lincoln Engineering School. 2.6 Detailed face-to-face interviews were conducted with businesses within each of the sector supply chains. An interview proforma was developed, and is included as Appendix 1. The interviews covered the following broad questions: What products and services do you offer? Can you tell us about your links with your suppliers? (local, national, global) Who are your customers? (local, national, global) How do you collaborate with other companies for producing goods / satisfying customers / sharing equipment / joint purchasing? University of Lincoln and ADAS 5 Opportunities for Our Supply Chains What opportunities do you envisage for collaboration