Creating a competitive advantage through R&D

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A Sheffield Forgemasters International case study

With its headquarters in Sheffield, SFIL is the parent company of seven subsidiary companies. These provide steel forgings, castings and engineering solutions to customers around the world. The business operates in many sectors, including defence, nuclear, offshore oil and gas, power generation, marine and construction. Despite a steady decline in steel manufacture in the UK over the past few decades, SFIL has continued to grow. It is now a world leader in heavy steel castings and steel forgings. Like any business, SFIL can be affected by various factors in the external environment in which it operates. These factors are often grouped under six headings: political, economic, social, technological, environmental and legal (PESTEL). Companies need to understand these factors to make sure they develop strategies to remain competitive. They need to find ways to manage and influence the external environment effectively. This case study shows how SFIL uses research and development (R&D) to sustain its competitive advantage. As Dr Graham Honeyman, chief executive of SFIL, has noted:

‘Research and development is the fastest growing area of this company and is fundamental to the strategy of the business.’

This case study features two of these solutions: a new way of manufacturing large components for the nuclear energy industry and an innovative method of repairing a damaged subsea oil platform in the middle of the North Sea.

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 activity

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.

Its research activities cover all aspects of the manufacturing process. It has made significant developments through research into metallurgy.

In looking for a solution to the problem on the oil platform, the client proposed a new structure, sited 2,000 metres below the platform. RD26 Ltd used its expertise to support the casting design to meet the strict requirements. This included researching the material properties and dimensional accuracy needed to withstand severe operating conditions.

Research team

Researchers can also build models to replicate a system. These can be physical models or computer-based representations. RD26 Ltd uses 3D solid modelling to design parts, assemblies, tooling and processes for casting and forging activities. In seeking ways to improve the manufacture of nuclear reactor components, extensive research was conducted by RD26 Ltd using modelling techniques. These were key in developing the optimum chemical composition and methods design for the foundry castings. Laboratory trials were conducted to determine the correct tempering process. This is the process of heating metal to a high temperature below the melting point, then cooling it, usually in air, to obtain the necessary balance of mechanical properties. On a larger, plant-based scale, trials were undertaken to investigate material flow, heat transfer and the frictional conditions.

Researchers used a scanning electron microscope to investigate microstructure property relationships. These trials are expensive. However, the size of the reactor components means that there is no room for error once the process is used in commercial production. Engineers need to get the product ‘right first time’.

‘We have created new processes for manufacture in civil nuclear, such as the integral forging of nozzles into ultra-large components, the delivery of highly complex castings for offshore oil and gas exploration and we are now working with some of the world’s most renowned engineering companies [on] collaborative research and development work.’

Advances in materials and processes

Recent developments at SFIL have lead to advances in materials and processes. Material advances have allowed the company to develop products with higher strengths and toughness using specific grades of steel. This requires close control during the steelmaking process to produce ingots with the required quality. A major process development has enabled the company to forge large complex components for the nuclear industry. One component incorporates a support ring and integral forged nozzles. This combination of features has not been achieved by any other nuclear engineering company. Such new shape forgings create not only greater manufacturing efficiencies but also delivers a component that has higher integrity than one that has been machined and welded to create the same shape. To produce this component, new forging procedures were developed using specially designed tools. Everything was designed and fabricated in-house. This included designing the computer-controlled apparatus for localised heating of the component.

Other challenges include maintaining health and safety, looking after the wellbeing of employees and sustaining the environment. These are factors that apply across SFIL, and not just in its R&D facilities. SFIL is committed to reducing the environmental impact of its operation. Manufacturing operations are tightly managed to comply with environmental legislation. Emissions, energy consumption and waste processes are monitored continually. The company has also invested over £3 million in modern burner technology to reduce its natural gas usage.

However, expenditure on R&D can bring significant benefits. It has created a distinct competitive advantage for SFIL. Being the first in the world to produce large-scale cast and forged nuclear components helps to distinguish SFIL from its competitors. The investment in R&D also enables SFIL to focus on major projects across the business and to form partnerships with high-profile companies in the delivery of its solutions and products.

The research and development facility enables us to be much more flexible in defining the characteristics of each component and tailoring the manufacture process to suit. The resources here are enabling us to take on increasingly technical challenges and to look at entirely new ways of creating components, which allows for greater manufacturing efficiency and stronger, lighter, more complicated end products.’

R&D is embedded within SFIL’s culture. It drives the innovation needed to meet the challenges of emerging technologies. Over 200 years after it was originally founded, it allows SFIL to remain at the forefront of the world’s most technically driven markets, developing at the pace demanded by its clients and customers.