Page 1: Introduction
The origins of Sheffield Forgemasters can be traced back to 1805. In that year, Edward Vickers, a traditional miller, made the largest steel ingot of its time. He manufactured (cast) steel bells, which were exported around the world. Over 200 years later, Sheffield Forgemasters International Ltd (SFIL) is the largest independently owned Forgemaster and one of the oldest steel businesses in the world. It is one of the biggest private sector employers in South Yorkshire.
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.’
R&D is the function within an organisation that carries out technical and/or scientific research in the development of new or existing products, processes or services. SFIL has invested heavily in all areas of the business in implementing new processes and technology. It has established a new subsidiary, RD26 Ltd, that focuses solely on R&D. RD26 Ltd provides services to both SFIL’s internal and external customers. It does this by developing unique engineering solutions to meet customer needs. 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.