Creating a competitive advantage through R&D A Sheffield Forgemasters International case study
Page 2: The purpose of innovation, research and development
In an engineering business, innovation is a core activity. It is important for its survival and can help the business remain competitive in changing markets. Innovation can take many forms. It does not simply cover new product development. Innovation can be applied to product renewal or the design of new processing technologies. It is important to understand the difference between invention and innovation. Invention involves creating something new, but it only becomes an innovation if it is a practical and marketable application.
SFIL has to meet the challenges of competition from low-cost manufacturers and suppliers. It does this by continually developing new ideas – ideas that can be developed into new products, materials and process improvements. Companies can adopt different approaches to new product development:
a product oriented approach – a product is developed and then a market is identified for it
a market oriented approach – a product is developed in response to an identified customer need.
A product can also be developed in response to a competitor’s product. An existing product may be enhanced through research into how to make the product better. Research can also lead to technological developments that improve the manufacture of the product or the way it is delivered to the customer.
R&D is very costly. However, it is an important investment. Money spent on R&D can secure the future of an organisation. SFIL spends between 5% and 10% of its annual profits on R&D across the company, compared to a national average of 3%, and has substantial R&D capabilities. RD26 Ltd can support projects related to the manufacture of carbon, low alloy and stainless steel grades for almost all heavy forging and casting applications. The majority of its R&D activity involves the optimisation of its manufacturing processes, material developments and the implementation of new manufacturing processes. One focus is on raising quality and reducing costs through improved methods of working. Another is on researching new materials and techniques in forging and heat treatment practices.
R&D can also be in response to a specific client or industry need. For example, in 2009 production had to be stopped at an oil platform in the North Sea. Cracks had appeared in the subsea structure joined to the oil storage tank underneath the platform. The damage occurred because the grouting material applied to fix the caisson (watertight structure) had failed. The operator of the platform came up with a temporary solution. However, SFIL was approached to help solve the problem. The company has particular expertise in high integrity steel castings for the offshore sector. The large repair casting that was created won the Cast Metals Federation (CMF) Cast Component of the Year Award 2012.
There are different challenges facing the nuclear industry. Nuclear power is increasingly seen as one solution to meet future energy demand. This will create opportunities for UK businesses with expertise in nuclear engineering and associated technologies. SFIL has identified the nuclear power sector as a key market opportunity. As such, it is placing R&D effort in this area. This is looking at innovative ways to manufacture the large components required in civil nuclear reactors.
Sheffield Forgemasters International | Creating a competitive advantage through R&D