Barclays manufacturing boss calls for more robots

In this exclusive interview, Mike Rigby, Barclays’ head of manufacturing, talks about how robotics and automation technology can help UK companies compete with the rest of the world – even those in the Far East

It’s a generally accepted notion that when it comes to computer technology, what happens in the US this year is likely to happen in the UK the following year, and then on mainland Europe the year after that. Meaning, Germany is a bit behind the leaders when it comes to IT. That’s the perception some people in the tech industry have anyway.

The wider public’s perception of Germany as a tech leader is predicated on the country’s prowess in engineering, specifically its expertise in auto-making, and, by extension, manufacturing. And crucial to manufacturing is the technology of robotics and automation, which is also an area in which Germans are thought to be strong.

But while that’s the general perception, it’s not one that some people like to perpetuate or overblow, especially if it means a relative diminution of other competitor countries, such as the UK.

One of those people is Mike Rigby, head of manufacturing business in the UK for Barclays Bank. Rigby’s unit has produced what is probably the most authoritative study about robotics in the UK manufacturing industry.

Entitled Future-proofing UK manufacturing, the report makes the central claim that for an additional £1 billion investment in robotics, the country would see £60 billion added to its economy overall.

“The reason why we produced the report is that it’s relevant to our customers,” says Rigby in an interview with EM360. “Investment decisions relating to robotics and automation are decisions they are wrestling with right now.”

According to calculations made public by the Houses of Parliament, the UK manufacturing industry employs approximately 2.6 million people, and accounts for around 10 per cent of the country’s GDP. And while the general perception of the UK is that its economy is mostly about finance and services, it’s still one of the top 10 manufacturing nations in the world.

Barclays has had a dedicated team dealing with UK manufacturing businesses for more than a decade, and Rigby is the main man in that team.

“I’ve spent virtually my entire working life talking to clients,” says Rigby. “And the typical responses I hear now is not whether to invest in robotics and automation, it’s how much to invest.”

Rigby is keen to dispel the notion that British manufacturing business leaders’ implementation of robotics and automation strategies is somewhat slower and less ambitious than that of their German counterparts.

“Germany is held up, certainly within the press, as being far more advanced,” says Rigby. “So what we tried to do with the report is to do a comparison of UK manufacturers versus their German peers. The figures are relatively close. And I think that was one of the most pleasing things.

“Germany’s slightly ahead because of its large automotive manufacturing sector, which would typically lead to greater investment in robotics and automation.”

According to the International Federation of Robotics, half of all industrial robots in the US are bought by the big automotive manufacturers. Britain does have an automotive industry, with Nissan, Jaguar Land Rover and other companies based here, but it’s not on the scale of Germany, Japan and certainly not the US, which, in turn, has been overtaken by China.

According to the Organisation Internationale des Constructeurs d’Automobiles, the UK is in the top 20 list of auto manufacturing nations in the world. It’s about a quarter the size of Germany’s automaking sector, which produces about 6 million motor vehicles a year.

From Rigby’s and Barclays’ point of view, for obvious reasons, the most important numbers are in the investment column of the accounts books. In its research, Barclays found that 53 per cent of manufacturing businesses in the UK have invested in robotics and automation. The figure for Germany is 61 per cent.

Rigby says Barclays “has always been a strong supporter of the manufacturing industry”, but then he would say that robotics and automation will level the playing field, as it were. For while labour costs can vary enormously from country to country, the costs of robotics and automation systems are more or less the same the world over.

“Investment in robotics and automation makes the UK globally competitive,” says Rigby. “Also, the technology opens up new areas of manufacturing that people may not be aware that the UK excels in.

“For example, Eakin [one of the case studies in the Barclays report] manufactures a product that could come from anywhere. It’s generic and the sort of thing you might associate with the Far East. But these type of products can be produced cheaply with robots here in the UK.”

Rigby’s implication is obvious, although not necessarily one that would play well politically, considering that what he seems to be saying is that while productivity will increase, job creation would be minimal.

What could also happen is that the robotics and automation sector could become an industry in itself. All the top global robot makers already have a presence in the UK, and there are some interesting technologies and products being developed in one of the areas that Rigby is responsible for at Barclays, specifically logistics.

For example, Ocado, which claims to be the world’s largest online-only grocery store, has developed a fulfillment centre that in itself has become a product – other companies which need to use a fulfillment centre in their logistics process could simply purchase Ocado’s ready-made solution.

Highly automated and with far more computing power than previous warehouse automation systems, the Ocado solution, developed by Cambridge Consultants, features 1,000 robots, all centrally monitored but mostly autonomous.

There are one or two other companies around the world which are developing such “factory in a box” solutions, and there’s even companies which can manufacture single items to order, using 3D printing and advanced manufacturing techniques. It’s a brand new area where it’s all to play for.

Rigby and Barclays’ hope must be that they can get in there and sign up a few people for their loans and investment packages, or whatever else they sell. Because, after all, it’s all about the numbers.

EEF, the manufacturers’ organisation, says the UK manufacturing industry employs 2.6 million people and represents 44 per cent of total exports.

While they might sound like reasonably healthy figures, opposition Labour Party leaders claim UK manufacturing is facing an “existential crisis” and suggest robots are the answer.

Shadow business secretary Angela Eagle criticised the Conservative government after Tata decided to sell off its steelmaking its operations in the UK, which means a possible loss of more than 10,000 jobs.

Eagle said in the House of Commons, that “the challenges facing the steel industry represent an existential crisis for the UK’s manufacturing sector as a whole”.

Meanwhile, Labour’s deputy leader, Tom Watson, has been going on for months about robotics and automation and how they’ll steal all our jobs.

Most recently, in a Guardian column, Watson quoted Bank of America statistics that suggest “automated systems will be doing nearly half of all manufacturing jobs within a generation – saving an astonishing $9tn in labour costs“.

The Conservative apparently has no specific policy around robotics and automation, but it has been funding projects to develop driverless cars and other smart mobility initiatives.