The IMI Newsletter Issue 3 August 2015 · The IMI Newsletter Issue 3 August 2015 Critical Precision Hydronic Engineering GREAT the IMI Way Mark Selway summarises our interim results

The IMI Newsletter Issue 3 August 2015

Critical Precision Hydronic

EngineeringGREAT the IMI Way

Mark Selway summarises our interim results to 30 June 2015 Page 3Our top scoring lean site welcomes IMI Executive Page 5IMI Truflo Rona deliver “monster” valve in 16 weeks Page 15Precision uses Engineering GREAT to win new contractPage 20

Highlights

For the first time in eight years, Precision Engineering attends the Hannover Messe P16

Delegates from all three divisions attend lean workshop in Brno

P13

Hydronic welcomes 8,000 visitors to its trade show exhibitions P17

IMI Critical Engineering opens a new world-class facility in South Korea

P8

Investors and analysts from the UK visit our Critical and Precision Engineering sites in the Czech Republic

P5

IMI meets the new chairman and enjoys his address at the Group Conference P23

Integrating H,S&E with lean has positive results P13

Meet IMI Precision Engineering’s new Divisional Managing Director, Massimo Grassi P22

Enthusiastic colleagues embrace our 5th IMI Way Day P24

2 The IMI Newsletter Issue 3

IMI annouces interim results to 30 June 2015

The five year plan continued to be executed effectively and good progress and increased momentum were evident across the Group’s strategic initiatives.

On a reported basis, revenues of £765m (2014: £809m) were 5% lower after the impact of adverse exchange rate movements of £31m, organic revenue reduction of £18m and a net benefit of £5m related to acquisitions and disposals. After adjusting for the impact of adverse exchange rate movements and for acquisitions and disposals, Group revenues on an organic basis were 2% lower than the comparable period in 2014.

On a reported basis, segmental operating profit of £116m (2014: £137m) was 15% lower. Excluding the impact of adverse exchange rate movements of £6.1m and £3.0m related to acquisitions and disposals, segmental operating profit on an organic basis was 9% lower than the comparable period in 2014.

The Group’s segmental operating margin was 15.2% (2014: 17.0%) reflecting the impact of lower margins in Critical due to order book phasing and the effect of portfolio changes related to mergers and acquisitions.

Cash generation continued to be strong at £82m (2014: £65m) despite an increase in capital spending of £7m. The results include the benefits of improved working capital management (+£23m) and lower tax payments (+£11m) when compared to the previous half year. Net debt was £289m (2014: £232m) reflecting the payment for the Bopp & Reuther acquisition.

The resulting adjusted earnings per share were 30.3p (2014: 34.9p). Reflecting continued confidence in the Group’s prospects, the Board is recommending that the interim dividend be increased by 2% to 13.9p (2014: 13.6p).

Critical Engineering’s inherent strengths, including the division’s significant installed base and unique technical offering, have enabled the business to demonstrate its competitive advantage and deliver robust growth in its Aftermarket and Liquid Natural Gas (LNG) sectors.

Order input of £292m (2014: £309m) was 6% lower than the same period in

2014. On a like for like basis, Aftermarket orders increased 5% to £134m (2014: £128m) reflecting continued strong customer demand to optimise performance of Critical Engineering’s significant installed product base. Oil & Gas order input continued to be strong with orders up 8%, including large LNG orders in the US and some significant project wins in the Middle East. As anticipated Nuclear, Petrochemical and Fossil Power orders were all lower in the first half of 2015, reflecting the impact of slowing market conditions, particularly in China.

Organic revenue of £278m (2014: £295m) was, as expected, 6% lower than the same period in 2014 and was impacted by the phasing of this year’s order book as well as the inflated comparable, related to the shipment of £20m of the £40m HIPPS order in the first half of 2014.

Operating profit of £40.8m (2014: £50.6m) was 19% lower than the same period in 2014 due to the above mentioned lower volumes and market-driven delays of more profitable projects into the second half of the year. The reduced operating profit resulted in margins decreasing to 14.7% (2014: 17.2%).

The acquisition of Bopp & Reuther completed on 2 January 2015 and is not included in the above numbers, however for the purposes of comparison in the results, Bopp & Reuther reported order input of £24.3m (2014: £27.7m), revenue of £17m (2014: £27m) and an operating loss of £1.0m (2014 profit: £2.2m).

Precision Engineering’s organic revenues of £342m (2014: £344m) were 1% lower with good growth in Commercial Vehicle (4%), Rail (20%) and Life Sciences (9%) offset by reductions in Industrial Automation (3%), Oil & Gas (5%) and Food & Beverage (11%).

Operating profit of £63.7m (2014: £69.1m) was 8% lower with a number of factors impacting the comparison. The higher volume of lower margin Commercial Vehicle revenues and reduced higher margin sector revenues negatively impacted results. In addition, a number of one off charges were incurred including a £2.5m operating loss resulting from the deteriorating Commercial Vehicle market and negative

exchange impacts in Brazil. Additionally, the implementation of the new ERP system in the US highlighted a number of issues relating to prior periods, which amounted to a charge of approximately £1.5m.

Offsetting these one off costs, the half-year results include a £4.2m gain related to the sale of a Precision Engineering property in the UK. The combination of the reduced operating profit and the recognition of the gain on the Precision Engineering property disposal resulted in an operating margin of 18.6% (2014: 20.1%).

Hydronic Engineering’s most important markets include the European residential and construction sectors, which continued to experience the subdued conditions that have prevailed in the past few years.

Organic revenue of £128m (2014: £127m) was 1% higher. New product sales totalling £10m offset the impact of a 2% European Construction market decline and currency revaluations related to products produced in Switzerland and sold in European markets.

Operating profit of £23m (2014: £24m) was 2% lower impacted by a £1m reduction in patent payments, which were received in the first half of the prior year, inventory reduction and reduced Swiss based selling prices, which were implemented in response to the revaluation of the Swiss Franc. The reduced operating profit resulted in margins of 18.0% (2014:18.5%).

New product development costs increased substantially from 2.7% of revenues in the first half of 2014 to 4.0% of revenues this year with further investment planned in the balance of the year.

Group outlook In the remainder of the year organic revenue is expected to have a comparable percentage reduction to the first half result. Second half margins, supported by improved results in Critical together with second half seasonality and new product sales in Hydronic, are expected to be broadly equivalent to the second half of 2014.

Full details of these results, including the webcast of the presentation to the City, are available at www.imiplc.com/investors

The Group performed broadly in line with expectations in the first half of the year despite challenging economic conditions in a number of key markets.


3


Our Brno site in the Czech Republic is Precision’s divisional lean showcase site and continues to work hard at making continuous improvement. As we progress on the lean journey, it’s the attributes around cultural improvement, material control and level production that are essential to take lean to the next level.

At Brno we’re starting to look at the mixed model line concept. Mixed-model assembly is one where more than one model of the same general product is intermixed onto one assembly line. The amount of work required to assemble units can vary from model to model, but the speed of the line is able to cope with these

differences, the parts needed for each product along the assembly line being introduced at the point the manufacturing operator needs them. Building different products simultaneously is the critical next step to improving efficiencies and reduce the manufacturing ‘footprint’ space in the plant.

We’re also looking at how we level out the line – one product line producing the same as multiple production lines. Put simply, levelling is about bringing all the manufacturing orders together at the start of the day and to then distribute them during the day to reduce lead time, avoiding any production ‘spikes’ and enabling flow.

Supply chain management is evolving ‘Push; Pull & Flow’ approaches in progressive stages and it’s our goal to move towards a ‘flow’ approach in our desire to be more efficient, reduce lead times and waste.

The different approaches are:

l Push manufacturing to build stock or working to a forecast estimate – this has the danger of over-production creating too much inventory and reducing stock-turn

l Pull batch production based on a stable demand to prevent building excessive stock levels

l Flow levelling out the loading in the plant, not building stock but reliant on accurate sales forecasts. Just-in-time stock is needed to align to this model

Over the past five years, we’ve moved from Push with a stock turn of 6; then to Pull with a stock turn of 7.5 and now we aim for Flow and level loading. Bringing together customers and suppliers, as well as level loading and direct shipping, will have a significant impact on our inventory levels and plant efficiency.

We’re keen to make our factory as efficient as possible, and the team at Brno is working hard and continues to share our experiences and help the broader Precision team in our journey to growth.

Taking lean to the next level at Brno - mixed model lines and levelling

WRITTEN BY Sascha TometschekBrno Plant Director IMI Precision Engineering

Since becoming part of IMI in January 2015, IMI Bopp & Reuther in Germany has enthusiastically embraced our lean implementation. In May, a group of Lean Champions from four Critical locations was dispatched to Mannheim to help lead and introduce the first Total Productive Maintenance (TPM)implementation workshop at IMI B&R.

The goal of TPM is to ensure the equipment is maintained in good running condition and ensure the machine is always available when needed to deliver customer requirements.

During this 4-day event, some best practices from other sites were shared and 43 improvement actions were completed on the Weller E70 machine. In addition, as part of the Autonomous Maintenance process, operators were trained to conduct 8 specific standard daily maintenance activities.

First lean event at IMI Bopp & ReutherWRITTEN BY Jeff Lumsden Director, Operations IMI Critical Engineering

Thomas Schmuck, Operations Director at IMI B&R, was very pleased with the support from the other locations and the positive response and enthusiasm from the IMI B&R team as they begin their lean journey.

Before ... After

Using cardboard engineering, the team at Brno lay out a mock-up of the new mixed model line approach


business improvement

On Tuesday 9 June we were pleased to take a group of 35 analysts and investors to the Czech Republic to visit two of our showcase sites for lean manufacturing – IMI CCI Brno and IMI Precision Engineering Brno.

The event started with a dinner the night before, hosted by Mark Selway, but also attended by 23 employees from all three divisions. We wanted to allow our guests access to a variety of different people who could all talk enthusiastically about the great work they are doing in their functions.

The next day we started at IMI CCI Brno and the group, some of whom had last seen the site in 2010, were impressed by the improvements that had been made. We were given fascinating tours around the facility and saw real examples of improvements that had been made by implementing lean.

After lunch we moved to Precision’s facility where we were equally impressed by the work that had been done to improve the efficiency of operations. Visitors and IMI colleagues alike were particularly keen to

sit in the Zetor tractor on display and listen to the accompanying presentation on how Precision has worked with their customers to provide innovative solutions that have helped them to increase market share.

All presentations from the visit can be found in the Investors section of the IMI website.

Feedback on the visit from analysts and investors was extremely positive. Not only did the share price rise 2% the following day but, more importantly, our visitors could see the benefits and understand the opportunities that lean offers. Whilst they recognise there is work to do, they appreciated the clearer insight into our capabilities, processes and strategies. They also left believing, more than ever, that IMI has the best people and the best culture - invigorated, open and committed - so necessary to real success and yet often absent in industry.

With visits like this there is a lot of hard work that goes on behind the scenes and we would particularly like to thank the teams at IMI CCI Brno and Precision Brno for all their hard work to make this event a resounding success.

Czech sites welcome investors and analysts

Visitors watch a video on Critical’s Kashagan Field project

Precision’s Divisional Managing Director, Massimo Grassi, gives the Zetor tractor the thumbs up

WRITTEN BY John Dean Head of Investor Relations IMI plc

Recently there has been a lot of interest in the Hydronic factory in Olkusz, Poland. Understandably so when you see the tremendous progress made in the implementation of lean principles and the top ranking on the group lean scoreboard. We have been pleased to welcome over the last six months, not only colleagues from the other divisions, but also Carl-Peter Forster (non-executive director) as well as the IMI Executive following their May meeting.

The management team at our Hydronic Engineering showcase site is proud of the very positive feedback received from Mark Selway and his Executive team, following on from the visit by Carl-Peter Forster back in November. Visitors were impressed by the consistency of Visual Management, plant lay-out organisation, flow of materials and the way assembly-activated production pulls from customer orders just in time for delivery.

With the ’see through’ concept, a visual factory speaks for itself: machine conditions, output from each line, quality assurance

and fool proof devices, material stock levels – all are easy to assess with the glance of an eye. The shop floor is managed on the spot and in real time!

Competitor product benchmarking was another important topic covered during the visits. In Olkusz, seven products have been torn-down to expose differences, opportunities and gaps to support our plans for continuous improvement and the product development programme.

Mark Selway confirmed that our factory was moving in the right direction and the policy deployment process implemented will support and guarantee the achievement of our goals.

With his in-depth knowledge of the automotive industry, Carl-Peter focused on helpful comments and tips to further improve our visual signage, customer satisfaction, process and product development.

The warm reaction to our achievements to date gave real encouragement to the teams to continually strive to improve our factory.

Olkusz site is the centre of attention

WRITTEN BY Grzegorz Gonet, Plant Manager Olkusz, & Alberto Tureikis Head of LeanIMI Hydronic Engineering

Mark Selway & Group Finance Director Dan Shook take a tour through the Olkusz factory

5


One of Precision Engineering’s key FIX8 projects is focused on rationalising our product range - taking out as much complexity as we can within the supply chain, and making room for the growth in new products. We know we have too many parts and duplication of product ranges, but how many is too many? And which product ranges can we remove without affecting our customers?

A core divisional team is working on this project which includes Joyce Webb and the Product Management team who bring their knowledge and expertise to

make some of the difficult decisions on which parts stay and which parts go. Sonja Janssen and the data team are looking at how we manage this from a system perspective. This project touches the whole of Precision Engineering and the process of making a part obsolete is now being piloted to make sure we check with the right people and ask the right questions in order to make the best decisions possible when it comes to specific parts.

In June, we presented progress on the FIX8 Rationalise project to our investors as part of their Brno visit, further details of which are in the story on page 5. They were keen to see what progress we had

already made and how we were moving forward. So far we have removed around 150,000 parts from our systems and we are now in the midst of phase two – looking at the infrequently ordered products to review which ones can be obsoleted – focusing on the ones that don’t impact our customers. Phase 3 is focused on working collaboratively with all regions to review our product families to define the core products we should be offering and make sure we’re not duplicating our range and creating unnecessary complexity. The emphasis is to create room, to give us the ability to create new products that are in demand – a true recipe for growth.

Focusing on the right productsWRITTEN BY Caroline Zyla Global Purchasing Strategy Manager IMI Precision Engineering

WRITTEN BY Julie Minnell Corporate Projects Manager IMI plc

Shop floor employees can now access IMI’s global intranet, thanks to the rollout of computer kiosks in manufacturing sites.

Although over 8,000 desk-based employees were given access to the news and information the intranet provides within six months of launch, colleagues who did not have a permanent computer were

missing out. Projects to install the communications points in Critical and Hydronic Engineering have taken place on time and on budget to give full access to the intranet, promoting collaboration and better business awareness.

Precision have started the same journey and many sites have kiosks in communal areas. It is important that our shop floor colleagues gain access to all lean benchmark and training tools available as engagement for operational improvements starts with them.

Global intranet rollout to the shop floor

Implementing the new JD Edwards enterprise resource planning system (ERP) has become a cross-divisional learning experience. In April this year, Lean Champions from IMI Hydronic met with Precision’s President for Brazil & Latin America, Ricardo Rodrigues and his team at IMI Precision Engineering in Brazil to find out more about their current implementation of the JD Edwards ERP system.

“Sharing the experience and lessons learnt on site is an invaluable part of the ERP implementation project ” said Raphael Finck, ERP Implementation Programme Director at IMI IHydronic “It will enable us to avoid losing time re-inventing solutions already perfected by Precision, as well as helping us avoid some of the obstacles encountered by that division”.

Areas of collaboration included ERP framework guidance, support in how to progress lean manufacturing, support organisation, core process definition, products and process structure design,

tests and pilots. The time spent observing how operators interact with the ERP system allowed the Hydronic team to identify opportunities where processes and lines at Precision could be optimised for full lean performance. It showed the system capabilities live and not just as theoretical slides and explanations!

xLeft to right: Fabio Aguiar, Factory Manager, Carlos Marques, IT Manager,Ricardo Rodrigues and Alberto Tureikis

WRITTEN BY Alberto Tureikis Head of Lean, IMI Hydronic Engineering

Sharing best practice and experience across IMI divisions

A typical IMI intranet computer kiosk



IMI Hydronic Engineering in Sweden and Germany successfully negotiated a frame agreement with Nordic Green Energy and FairEnergie GmbH respectively. As a result, they have also been awarded the Green Power Certificate.

This means that now all our electrical energy comes from exclusively renewable energy sources, such as sun, wind and water. Therefore, we are using mainly green energy in our facilities, which enables us to reduce to the minimum level the usage of gas during the production process!

Sweden is a leading country in the usage of green electricity, with 57% green energy production, and we are proud that IMI Hydronic Engineering is one of the country’s most committed and active players in reducing pollution and enhancing global well-being.

Within the Hydronic Division, the Ljung factory is the largest user of energy in Europe with a consumption of 24 million kwh/year, and the Erwitte site in Germany is the second largest with a consumption of 13 million kwh/year. Obtaining the Green Power Certificate is an excellent contribution to our commitment to environmentally-friendly energy solutions.

Green Power certificate awarded to HydronicWRITTEN BY Rossana Cantu Marketing GraduateIMI Hydronic Engineering

As part of its drive to strengthen its core capabilities in project management and operations, IMI Critical is targeting 18 sites for the implementation of its Obeya programme.

Obeya, from Japanese meaning ‘Big Room’, is a project management tool that originated in Asian companies, and has been adopted worldwide as a lean management technique. In practice, Obeya is a dedicated space where teams can track and review the progress of their projects across the entire life cycle. It enables collaboration, problem solving, and decision making. Obeya is divided into four main sections or phases:

l Pre-Machining Control Wall – project management, design engineering, manufacturing engineering and procurement

l Component Machining Control Wall – in-house machining, outside processing, and outside machining

l Post-Machining Control Wall – kitting, assembly, testing, paint, source inspection, crating, final detail and invoicing

l ‘Act’ Wall – Obeya room guidelines, KPIs, 3Cs and Actions/Owners/Timings

These phases allow employees to visualise a project from end to end, with a clear sequence of the work and the timings to ensure projects are delivered to customers on time, on budget, and to a very high quality standard. A successful Obeya implementation will achieve ‘takt’ – a ‘heartbeat’ of outputs at regular intervals which ensure the project remains on track.

So far, three sites have gone live with Obeya. IMI CCI RSM and IMI CCI Korea completed their implementations in February and April respectively, with very positive feedback from employees. In May it was also implemented in IMI CCI Brno.

“Before Obeya, we only saw the manufacturing process,” said Vanessa Settle, Planning Manager IMI CCI Americas. “After the Obeya implementation we can now see the entire order-to-invoicing process. Before Obeya, we made decisions in isolation, now we can prioritise what work to see in the right sequence.”

“Obeya promotes collaboration between each member of the project team,” added Aisha Jafri, Fossil Engineering Manager, IMI CCI Americas. “The daily meetings focus on progress and support quick resolution of issues that arise.”

IMI Critical begins implementation of Obeya programme to support project management excellence

Before improvement After improvement

WRITTEN BY Jim Herbert Director, Project Management IMI CCI Americas IMI Critical Engineering

Obeya Room

Project Room

The IMI CCI Korea Obeya room implementation result

7

Critical Precision Hydronicbusiness improvement


Less than six months after the groundbreaking ceremony, IMI CCI Korea has opened its new £8m facility in Paju, a city in the north-west region of South Korea.

“We have all the right ingredients for success in Korea – a business-friendly environment, a history of strong growth and most importantly, a passionate

workforce who are committed to making the effort to be the very best in their industry.” commented Mark Selway, who hosted the opening ceremony which was attended by over 60 customers and 20 government officials.

The new 20,000 sq.m facility is a third larger than IMI CCI’s previous site, and will provide the capability of manufacturing larger valve sizes in-house, of up to 42”, as well as enhancing welding and testing capabilities. It will also provide a significantly improved and safer working environment for employees.

After a traditional opening ceremony, which featured Korean drumming, tree planting and ribbon cutting, customers and guests were treated to a factory tour. “The new facility looks fantastic and we look forward to working with IMI CCI Korea for the upcoming Ultra Supercritical Thermal Power Plant projects.” said a representative

from Doosan Heavy Industries. Another, from KOMIPO, added:

“We have been satisfied with the supreme quality of IMI CCI valves so far, but we can now expect much shorter delivery and more competitive prices with local manufacturing at the new facility in Paju.”

Congratulations to the project team, led by Chungduk Suh, for delivering the new facility on time and within budget.

WRITTEN BY Sergio Sartoni President , IMI CCI Asia IMI Critical Engineering

The FIX8 initiative is giving the Precision Engineering division a real foundation for continuous improvement and there’s a marked difference in the conviction to change how we work – ‘do it once and do it well’ is our underlying principle.

The quality team from across the division came together under the chairmanship for the FIX8 quality project, Robert Guerra - President for Americas region. The divisional quality system was initially piloted at Alpen in Germany with Fradley UK, Queretaro Mexico, and Shanghai China plants undertaking a gap analysis to align their quality systems with the new global standards.

To ensure the division maintains the process discipline and rigour the quality

team developed and gained approval of a number of defined standard operating procedures (SOP). The SOPs define the work required within the factory floor quality system – identifying the metrics to use; the frequency of their review and the actions required where we are not meeting our targets. It’s about developing and defining standards that can be used in any of our businesses. We can really see the benefit of standardisation – a better response to global customers and a standard form to capture the feedback. Quality alerts and best practice shared across the business and posted where required to ensure corrective actions are identified and followed through.

Global and site level SOP process owners have been assigned to ensure ownership and consistency across the

division. Weekly meetings to review progress take place at each site which drives accountability. In the past global quality projects were very difficult – right now everyone is committed to deliver, often working long hours to get the best and most responsive systems in place to make quality a global competitive advantage.

If a customer contacts us with a problem, they typically expect a response within 24 hours. We have to get these standards into place and make them routine – this requires lots of discipline with site leadership involvement. What was right yesterday is not right today. That’s what great quality is all about. Customers expect the best and with Precision’s new global quality system, that’s what they’re going to get!

FIX8 delivering improved quality across the board

WRITTEN BY Steve BrownQuality & Business Process VP for the Americas regionIMI Precision Engineering

IMI CCI’s new site in South Korea provides a safer working environment for employees

Opening ceremony with Mark Selway, Roy Twite and Critical Engineering senior management

New world-class Korean facility opens on time and within budget

The IMI Newsletter Issue 8

IMI CCI’s new site in South Korea provides a safer working environment for employees

WRITTEN BY Bernhard Ruser Operations Director Continental Europe IMI Precision Engineering

The integration of IMI Bopp & Reuther into IMI Critical took a step forward in China, with the co-location of IMI Bopp & Reuther’s Shanghai Representative office with IMI Critical’s Greater China team.

Jackie Hu, IMI Critical’s President for Greater China, visited new employees at their Bopp & Reuther offices to welcome them to the team before the move in February. The eight new staff were then assigned to Sales, Project Management and Administration, according to their experience and skills. Groups from both companies worked closely together to ensure a smooth integration and accelerate synergies and teamwork.

IMI Bopp & Reuther integration well on track in China

IMI Bopp & Reuther team now integrated in the IMI Critical offices in Shanghai

The team at Precision’s Fellbach site in Germany has been working hard to improve and it’s reflected in its latest lean assessment – up from 32% last year to 59% this year. To achieve this step change they had to change the culture. Significant effort was put in place to ensure employees understood the goals and priorities.

All employees have been trained in the use of lean tools to understand what’s involved and the benefits they will bring. Every manager and supervisor recognises that they must be a lean role-model, visible and active in the factory, getting involved in improvement activities and Gemba walks to identify areas for improvement.

Key performance indicators (KPIs) are defined at all levels so everyone knows the contribution they need to make. Employees need to understand what our scrap levels are, what our on-time delivery performance is and inventory stock turns – the things they can directly influence.

By driving a continuous improvement culture using lean tools, scrap levels on the inlet throttle production line have now been reduced by over 90%! Other lean activities such as single minute exchange of die (SMED) have significantly reduced set-up times and made it much easier and quicker to locate tools and spares as well as reducing shop-floor space requirements through a comprehensive ‘5S’ clean-up programme.

Employees are now much more willing to share their views and ideas, discuss improvements, highlight investment needs and deliver their plans. Small investments bring GREAT benefits.

Fellbach springs forward to improve lean!

claiming and approving expenses and one system to be used by all. Concur is already successfully used by around 25% of the Group, including at Head Office, IMI CCI and IMI Norgren.

The global roll outs will commence in Q3 2015, initially covering the UK and some European countries and we expect to complete the roll-out across all IMI units by June 2016. The new Concur system and SOPs will enable us to have better management of our expenses and also help us deliver savings across our travel spend. If you have any questions, please contact your divisional T&E champion:

As a Group we spend millions of pounds a year on travel and expenses but we haven’t previously had consistent guidelines for the costs incurred by employees for business purposes, nor a common system to record and report on these costs.

In May, a new Standard Operating Procedure (SOP) was launched on the IMI intranet to provide overall guidelines and where appropriate, limitations to all IMI employees on travel, subsistence, gifts, entertainment and other expenses incurred for business purposes.

This SOP will be followed by the global roll-out of one standard process for

Group-wide standard for travel and expenses introducedWRITTEN BY Ivan Ronald Group Controller IMI plc

WRITTEN BY Richard Hu, Business Development, IMI China IMI Critical Engineering

WRITTEN BY Bernhard Ruser Operations Director Continental Europe IMI Precision Engineering

Head Office: Ben Guest Critical Engineering: Santosh Arya Precision Engineering: Malcolm Dewhirst Hydronic Engineering: Garrath Lyons


9


There are three distinct sales forecasting project phases:

Phase 1 We established the process and standard operating procedure. During this time, a small trial was completed in Spain and customer feedback was very positive.

Phase 2 Piloting the process within each region which is nearing completion. Again, lots of positive customer reaction as they see the improvement in our responsiveness.

Phase 3 Divisional roll-out of the standard operating procedure by 30 September 2015.


need. It is imperative that to improve our business we need to gain a better understanding of what our customers actually need so that we can simplify our supply chain.

TOGETHER, we will improve our competitiveness and build a strong platform for future growth.

One of the key FIX8 projects is ‘Optimise’ which is focused on improving the sales forecast from customers. With a focus on our ‘runners and repeaters’ – the core products with lower variability and greater sales, we want to work with customers to capture their anticipated needs.

This data will enable us to develop a clearer picture of future demand to ultimately give our factories the opportunity to better plan their production schedules and supply chain. This will improve our effectiveness and reduce our costs – while increasing on time delivery and reducing lead times to customers too.

The goal of the project is to create and implement a visual, robust sales forecasting process for core products manufactured at all of our regional key sites from Americas to Europe and across APAC. We’re starting by collecting the sales forecasts which will eventually be provided to the factories and supply chain.

There is a global cross-functional project team - Supply Chain, Sales and IT are all heavily involved.

At the beginning of the project, the team identified that a large percentage of the costs of goods sold from our European Distribution Centre (EDC) at Alpen already had a customer forecast by part number and quantity. We felt that this was a very good start because these items also have a customer on-time-delivery of at least 95%. For the rest of the products, our factories use historical planning data. As we know, history doesn’t always accurately predict the future. For example, our non-stock products from the EDC have an on time delivery of 82%, which is well short of the 95% we have for the parts with a forecast. The lack of a robust sales forecasting process, along with factories using history to plan the supply chain and operations are two root causes which lead us to high inventory days.

So you may ask yourself don’t we already complete the sales forecast anyway, what is different about this project? The answer to that question is yes, but this is only completed by value and is not transferable to part number and quantities, which is what the factories

Better forecasting of customer needs means better Precision planningWRITTEN BY Jill Gunson European Inventory Project Manager,IMI Precision Engineering

IMI CCI RSM welcomes Group CEOWRITTEN BY CM Merrimon, President, IMI CCI Americas IMI Critical Engineering

A visit in March by Chief Executive, Mark Selway, to IMI CCI RSM in California was an ideal opportunity for the management team there to highlight recent successes with sales of US$65m in 2014, and a hit rate in the LNG order book of almost 100%, with 36 projects in train.

They were also able to report on the introduction of IMI-wide programmes to improve operational efficiency. These include a very successful SMED programme, which has been embraced enthusiastically by employees on the shop floor, and the building of their Obeya project tracking room, the first to go live in the IMI Critical Engineering division.

The Obeya room provides a simple, collaborative, tracking system through the design, purchasing, manufacturing and customer approvals processes, to ensure projects are delivered on time, on budget and to the high quality customers expect.

Mark Selway described the Obeya room as excellent and said “I am pleased with the progress here.”

The Obeya project tracking room at IMI CCI Rancho Santa Margarita plant


Over the last few months, IMI Group Finance have been working with representatives from all three divisions to bring the finance community, and wider IMI, an area on the intranet where we can collaborate and share finance best practice throughout the organisation.

We have identified seven core themes across finance to cover in the initial launch of the Finance Best Practice Guide, which will go live on the finance pages of the intranet in July.

This will include practical examples and guidance on areas including accounting and internal controls, financial reporting, optimising cash flows, taxation, and forecasting accuracy.

At the same time, we will also be launching four discussion forums on improving forecasting accuracy, insightful monthly reporting, improving overdues on accounts receivables, and getting the best from Cognos, so finance colleagues and non-finance colleagues alike please drop by and let us know what is on your mind and how we can help!

Sharing finance best practice WRITTEN BY Ben Mackenzie-Grieve Chief Management Accountant, IMI plc

“When I joined the Hydronic Division last year, I wanted to understand how our HR processes performed” said Louise James, HR Director for Hydronic Engineering.

With some advice from Laurie West, the HR team assessed the performance of each process, and rated its importance to internal customers. It was immediately clear that recruitment offered the most opportunity for improvement.

The opportunityFocusing now on the recruitment process, the team analysed how it works today, and identified the following issues:

l Turnover in key roles has been too high

l It has been hard to fill roles internally

l There are long lead times to fill roles, and we can carry key vacancies for far too long

l Candidates are not seen as customers of our process.

The solutionCorrective actions were identified, and members of the team volunteered to lead them. Examples include:

l Establishing an internal recruitment process

l Developing standard job roles across the business, with selection tools that can be used for each one

l Training recruiting managersl Developing an employer brand, and

materials to promote the Company l Developing strategic relationships with

universities, and a smaller number of search companies

l Using KPIs to track the performance of the process,e.g. time to hire, and cost of hire, so we continuously improve.

Key learning The biggest benefit is engaging the HR team in improving their own processes. This gets buy-in, and develops the capability of the team. We are learning by doing.

We have learned that we can apply lean techniques in ways that are simple, practical, and work in a non-manufacturing area of the business.

Applying lean techniques to improve recruitment

WRITTEN BY Tatiana Pont CarteretHuman Resources Manager, IMI Hydronic Engineering Switzerland

The Hydronic HR team during a lean workshop

IMI Z&J is embarking on a €7.4m upgrade of its Düren facility in Germany, as part of IMI Critical’s £30m investment in improving the quality and efficiency of its manufacturing sites to support its growth ambitions.

The upgrade involves demolishing four manufacturing halls which are over 100 years old, refurbishing five others, building new offices, and upgrading the site and equipment to meet current Health & Safety standards. The upgrade will take 18 months to complete, with an expected completion of mid-2016.

The investment will accelerate IMI Z&J’s drive to lean and create capacity for growth. We are delighted to see IMI investing in this upgrade, which follows a £3.3m Health & Safety investment last year. We are looking to grow by 50 per cent in the next five years and this new facility will give us a platform for growth and all employees are very motivated by the ambition.

The IMI Z&J upgrade follows IMI Critical’s investments in world-class facilities in Houston, USA, Italy and Korea, all of which have opened over the past 12 months.

IMI Z&J begins €7.4m upgradeWRITTEN BY Metin Gerceker Managing Director, IMI Z&J, IMI Critical Engineering


11



IMI Remosa is accelerating its plans to increase resources in Kuala Lumpur, following a number of business wins, including the award of the RAPID (refinery and petrochemical integrated development) project in Southern Johor, Malaysia, and winning the contract to modernise the Tupras, Kirikkale refinery in Turkey.

Kuala Lumpur is considered the main hub for Oil & Gas in Asia, and IMI Remosa is building a local support team for Petronas, which will be located with IMI CCI’s Kuala Lumpur office.

IMI Remosa will locate commercial and senior technical field service specialists in KL. They will become the primary contact points for all customers in the Far East region, and will also pursue new aftermarket opportunities, including spare parts, field service and planned maintenance.

IMI Remosa expands Malaysian base in response to business winsWRITTEN BY Fulvio MeniniSales & Marketing Director, IMI Remosa IMI Critical Engineering

WRITTEN BY Kieran Griffin Head of EngineeringIMI Hydronic Engineering

With a clear focus on customer value, we have committed to enhance our standardised advanced product quality planning process (APQP) with a consistent approach to competitive benchmarking.

The key aspect of this is Tear Down Analysis of our competitor products and their respective value proposition. The newly-created SOP and manual have been developed by a cross-divisional team: David Powel-Wiffen (Precision Engineering) & Martin Sauermann (Hydronic Engineering) whose aim is to improve our understanding of our best-in-class competitors on a product level (features, published data,

cost breakdown, real test data and manufacturing processes) and on a commercial level (availability on stock, available information online, technical support and responsiveness). Robust and deep dive analysis is performed through exhaustive workshops and testing to provide a comprehensive report in a consistent, standardised format in addition to factory teardown boards. Going forward, we will use the output as part of our product development programmes, marketing activities and overall positioning to win against the competition. We have already started pilots in Precision and Hydronic as we embed the process and make it available on the global intranet.

Cross-divisional collaboration on competitor benchmarking

IMI Z&J in Düren, Germany, have achieved impressive results from a recent SMED (Single Minute Exchange of Die) event, a key lean technique for improving efficiency and reducing waste in manufacturing processes.

The DMG 200 machining centre was the centre of the SMED event at IMI Z&J. Thanks to SMED, the operator movement was reduced from 647m to 91m, as shown on the before and after spaghetti diagrams. Even more impressive was the reduction in the set-up time from 102 minutes to just 12 minutes, thanks to the use of prepared changeover trolleys.

The DMG 200 machining centre is a key machine that is in constant use, so it was a good candidate for a SMED event. Even so, we were still amazed at the results, which show just how much room there is for improving our operations and efficiency. As a result of this SMED, we’ll enjoy much higher capacity on this vital machine.

Lean technique at IMI Z&J slashes set-up times and operator movementsWRITTEN BY Metin GercekerManaging Director, IMI Z&J IMI Critical Engineering

Before improvement After improvement

l Spaghetti operator movementsl Distance 647 metresl Time 102 minutes

l Spaghetti operator movementsl Distance 91 metresl Time 12 minutesl Use of prepared changeover trolleys

Dan Shook, Paul Roberts and Roy Twite at the teardown board which can be viewed by all staff


Divisional executive teams have decided that we can further improve the ownership and leadership of Health, Safety and Environment (H,S&E) by integrating H,S&E with lean activities to ensure that our plants have total direct responsibility for H,S&E. This will continue to improve our safety and at the same time help us to deliver sustainable growth.

The following ten H,S&E items have been added to existing lean assessments:

1. Total direct responsibility of site management2. Skills, expertise and training3. Safety signage and labelling4. Tool provision and care5. Risk assessment for change management6. Machinery and equipment guarding7. Management of chemicals and

environmental protection8. Accident investigation leading into improved

risk management9. Documentation and performance tracking,

communication and planning10. Interface between contractors’ and IMI sites’

working systems and equipment

The first wave of H,S&E lean assessments were completed in May and June by nominated H,S&E specialists and representatives from each location’s plant management team, who worked in collaboration with the lean assessors.

Improvement opportunities identified during the assessment are added into the site’s existing H,S&E action plans i.e. Credit 360 and completion is owned, agreed and managed by the local plant management.

You can find more information about the H,S&E and Lean assessment process and results on the intranet in the lean benchmarking page within the manufacturing function. Initial feedback from our sites is positive:

“This makes perfect sense.” “The addition of the H,S&E audit has helped to embed responsibility for safety with plant management.” “The H,S&E questions are well organised and informative.”

Divisional teams at Critical and Precision have been working hard in recent months to get their new communication hubs launched in the form of new divisional intranets.

Critical Engineering is consolidating divisional information into their new site, eliminating the need for regional sites and ensuring all employees can access consistent messaging, useful tools and the latest news. Roy Twite, Divisional Managing Director commented: “Through the intranet, the whole division can benefit from our collective knowledge and expertise, and can collaborate to make our business GREAT.”

The new Precision intranet enables divisional collaboration and sharing of best practice, as well as communication of their

strategy. Having one divisional communications hub, ‘one source of the truth,’ ensures we’re all working with the same set of information and have access to our latest standard operating procedures. Work is currently underway to progressively add information which is relevant and up-to-date within each of the functional areas. Precision employees are encouraged to check back frequently to review new updates. Regular news is posted on our FIX8 2015 strategic priorities to keep everybody up to date on how we’re doing on our journey to Engineering GREAT.

Hydronic will be re-launching their intranet later this year to ensure consistency amongst the divisions and to give their employees the same benefits as Critical and Precision are seeing.

Investment in divisional intranets

WRITTEN BY Julie Minnell, Corporate Projects Manager IMI plc

As part of our mission to develop future leaders in operations, I recently lead a 3-day lean workshop at Precision’s plant in Brno. The 14 attendees included representatives from all three divisions of IMI, not just participants from the Hydronic Fast Track programme.

Workshops, in addition to class room sessions on lean basics, gave us the opportunity to visit and benchmark the status of lean implementation at both Brno factories. What followed was an intense exchange of good ideas and best practices.

Both Sascha Tometschek and Miroslav Benes, plant managers respectively for our IMI Precision and IMI Critical plants in Brno, supported the event, sharing their current challenges, strategies and the way lean implementation is producing results. “Since first introducing lean techniques we have seen an improvement in customer service, shortened lead times, and reduced waste.” said Sascha.

Participants left the event motivated and full of ideas to take back to their own plants for immediate implementation.

For more information on the Operations Fast Track Programme at Hydronic see the story on page 22.

Operations Fast Track- integrating three divisions

WRITTEN BY Alberto Tureikis Head of Lean, IMI Hydronic Engineering

Safety first! WRITTEN BY Alan Harrison Group Lean Manager and Maurice Tunstall, Head of Health, Safety and Environment, IMI plc

H,S&E and lean teams developing assessment process

Workshop participants from across the Group on the shop floor at Precision’s Brno plant


13


customer focus

The annual Offshore Technology Conference (OTC) in Houston included a session on trail-blazing gas processing technologies – and featured IMI CCI’s recent high-integrity protection system (HIPPS) project for the Al-Wasit onshore gas plant.

The session was led by Saudi Aramco’s chief engineer, Nabilah Al-Tunisi, who discussed the history, scope and challenges of complex gas field systems.

The Arabiyah-Hasbah development contains 13 offshore platforms. Gas is gathered through trunk lines and transported to the Al-Wasit onshore gas plant. Challenges included multiple sources of power both onshore and offshore, long distances traversed by trunk lines, high pressures and temperatures, non-traditional wellheads and corrosion, the presence of sulphur, unconventional flare requirements and a demanding project time line.

The chief engineer explained why Aramco decided on a HIPPS – designed, developed and shipped by IMI CCI EAME during 2014, in lieu of a traditional flare. A traditional flare system would have

introduced safety, technical and environmental risks due to the

high pressure of the reservoir. By contrast, the HIPPS enabled safe operation through rapid opening and closing of the system and was compatible with the high pressures and temperatures.

The HIPPS prevents overpressure of the platform by shutting off the source of high pressure before the design pressure of the system is surpassed. The systems were installed at all 13 wellheads, preventing equipment exposure to the higher pressures of the reservoir and generated a significant cost advantage for the overall system.

No other examples existed for such high-pressure, high-temperature gas wells offshore, Al-Tunisi explained. This forced Aramco to forge a technology pathway to enable the safe, reliable production and gathering of gas from the Arabiyah-Hasbah fields. Saudi Aramco are so pleased with the success of the HIPPS system, that they

are proposing it should become the industry standard for oil & gas.

Top Aramco engineer highlights trail-blazing gas processing technologies from IMI CCI

WRITTEN BY Mike Semens-Flanagan Director Strategic Planning IMI Critical Engineering

Precision has been a supplier to Kongsberg Automotive for many years, supplying valve solutions for clutch control mechanisms on mining trucks. Kongsberg is a Tier 1 supplier to the automotive industry in both passenger cars and commercial vehicles.

Our engineering, technical and marketing specialists have been discussing our Phoenix valves with Kongsberg for a couple of years and the interest has been

growing. We worked hard to develop good customer relationships at all levels and there have been regular customer site visits to our lead site at Fellbach. We were delighted to win the contract to supply integrated valve-banks for a gearshift and clutch control, which will be the brain of a transmission system produced by their system integrator.

The Phoenix product proved to be superior to our competitors with improved response times, faster speed and reduced

weight. The customised valve bank solution was developed by Fellbach engineering in Germany and the assembly is planned at our Brno site in the Czech Republic.

This contract, worth nearly €30m over seven years, was secured as a result of a great team collaborative effort. GREAT Engineering, with customer-focused teams is the way to go and we’re really proud of this success!

Precision responds to win Kongsberg Automotive’s clutch control contractWRITTEN BY Lars Ebsen Key Account Manager, IMI Precision Engineering

Gate valves undergoing customer witness testing for IMI CCI HIPPS


This huge valve’s ultimate destination is Cidade de Ilhabela, a floating oil production, storage and off-loading unit (FPSO), operated by Petrobras. The FPSO went into production in November 2014 at the Sapinhoá field in the Santos Basin, offshore Brazil. Cidade de Ilhabela has a processing capacity of 150,000 barrels of oil and 212m standard cubic feet of natural gas per day.

Noton BV, a Dutch company that is part of Eriks Group, specialises in upstream oil & gas projects. It procured the valve for SBM Offshore, the owner of the Cidade de Ilhabela, to replace an existing valve from another manufacturer that was leaking.

SBM decided to re-use the existing actuator made by ATC, so the challenge for the IMI Truflo Rona team was to design

IMI Truflo Rona delivers 22 inch ‘monster’ valve in just 16 weeksWRITTEN BY Antonello VagoManaging Director, IMI Truflo Rona Italy IMI Critical Engineering

Delighting our customers is our aim in everything that we do – be that through service, new product development or the knowledge, training and support we can pass on to our customers to help optimise HVAC (heating, ventilation, air conditioning & cooling) systems. This means listening carefully to what our customers have to say. This year we took the opportunity to invite one of our key customers from the Netherlands to our divisional conference held in Krakow in May, to talk openly and candidly about what it’s like to work with us.

Paula Reinders – Procurement Manager HVAC at Technische Unie, market leader and the oldest technical wholesaler in the Netherlands (operating since 1880) certainly gave us something to think about.

Delighting our customers, means not only delighting those who install or use our products, but also our partners on the market, such as wholesalers, who help to ensure our products are available. It means co-operating, thinking and building a strategy together, to ensure the future success of both parties.

Paula urged us to take an example from the automotive industry – not only in our manufacturing and new product development processes, as we already do with lean and APQP, but also in our approach to marketing and generating demand when launching new products. She also shared some lessons learned from the recent Eclipse launch. The overarching message was IMI Hydronic does a lot of good things, but there is always room for improvement. Really listening to our customers and understanding their needs will help us to not just be good but GREAT.

Paula Reinders and the Dutch sales team from IMI Hydronic Engineering

Hydronic embraces the Voice of the Customer at its divisional conference

new actuator connections as per the existing valve.

The order, worth over €100,000, was placed on 1 December 2014, with a requested delivery date of 20th March 2015. Despite the challenging timescale, including the Christmas holiday period, the valve was designed, manufactured, tested and delivered on time.

IMI CCI Sri City has successfully manufactured its first turbine bypass valves for a 1050MW supercritical power plant, after the Sri City manufacturing facility successfully passed an audit by the commissioning company. The valves are the first produced in India for a 1050MW thermal power project.

The Japanese engineering, procurement and construction company (EPC) chose IMI CCI Japan to supply eight sets of low-pressure turbine bypass isolation and control valves, each with a capacity of 1050MW. While the assembly and testing of the turbine bypass valves was undertaken at IMI CCI Japan, IMI CCI Sri City was chosen as the manufacturing facility for the valve body (including all welding and desuperheater), fully machined internals and the bonnet.

Both IMI CCI Japan and IMI CCI Sri City collaborated closely during the manufacturing cycle to ensure the project was completed and shipped on time, to meet the customer’s specification.

We’re really delighted that IMI CCI India has been able to bring the latest technology for manufacturing turbine We expect that this will be the first of many orders for valves manufactured in India.

IMI CCI India manufactures first 1050MW turbine bypass valve

WRITTEN BY Natalie ZeranskaHead of Marketing Communications IMI Hydronic Engineering

WRITTEN BY Ajit Sreekumar President, India IMI Critical Engineering

Antonello Vago with the ball valve


15

customer focus

customer focus

In June this year, four IMI Critical brands joined forces to showcase their latest technologies at Achema 2015, a leading global exhibition for the chemical process industries, held in Frankfurt, Germany.

IMI Bopp & Reuther exhibited under the IMI branding for the first time, taking its place alongside IMI Zikesch,

IMI TH Jansen and IMI Z&J. The four companies showcased specialist safety relief valves and pressure relief valves which have been designed using the latest materials to offer premium in uninterrupted performance in extremes of temperatures, pressure and exposure to corrosion.“We are a long-term, key strategic partner to the power, oil & gas, petrochemical, iron & steel and other process industries, but

when we maintained separate brands, our product range, technical expertise and geographic reach were not always clear. So we are delighted to have showcased four of our core brands together this year at Achema, as it gave delegates the opportunity to understand the breadth and depth of the experience and skills IMI Critical can offer.” said Mike Semens-Flanagan, Critical’s Director of Strategic Planning.

Quartet of IMI Critical brands join forces at AchemaWRITTEN BY Jürgen Herzog Managing Director, IMI Bopp & Reuther IMI Critical Engineering

WRITTEN BY Jacqui McKinnon, Marketing Communications Manager, IMI Precision Engineering

IMI STI attended a key exhibition for actuation in May called IVS (Industrial Valve Summit) 2015. This exhibition was held in Bergamo, IMI STI’s home base and featured IMI STI sporting its new branding to the valve industry.

It is crucial that IMI STI is seen as an independent supplier of actuation to the valve industry, whilst at the same time benefiting from the IMI global strength. The stand built on the IMI Critical divisional branding and presented IMI STI as a world-class business with total actuation capability.

IMI STI attends IVS show in Bergamo, ItalyWRITTEN BY Mattia Tami Sales & Marketing, IMI STI IMI Critical Engineering

Within Precision Engineering, in addition to continuing to invest in our current market sectors, we’ve identified the industrial automation sector as a huge opportunity and we’re starting to develop our product roadmaps to realise the growth potential in this sector.

For the first time since 2007, the division exhibited at Hannover Messe, the leading global industrial automation trade exhibition. This exhibition attracted over 200,000 visitors and having a presence at this prestigious event represented a major investment by Precision Engineering.

The stand incorporated large touchscreens on each display, key products and demonstrations to highlight each theme, along with new videos and brochures. One of the videos showed the

Hannover Messe – showing we mean business

Fellbach product test centre and there was a Norgren Express animation showing the great service on offer. We also used a ‘virtual assistant’ called Leonie - a life-size projection creating the illusion of a real person who spoke in German and English to attract and guide visitors through our stand and product offerings.

The Hannover fair was a great event which required lots of hard work from all those involved. An event like this is not so much about selling as it is about showing our products, services and new branding. As we introduce more new products and develop potential for more applications, we’ll have lots more to show at future events like this. This was a high profile way of truly ‘Engineering GREAT’.

The new branded IMI Bopp & Reuther stand with IMI Z&J and IMI Th Jansen

The IMI STI stand at IVS

The team proudly display the new brand and products to visitors in Hannover


The first half of 2015 was the busiest for exhibitions and trade shows for the Hydronic division. We were pleased to attend a total for four shows with over 8,000 visitors to our stands.

The highlight was undoubtedly ISH in Frankfurt – the HVAC (Heating, Ventilation and Air Conditioning) industry exhibition, held bi-annually in Germany. All the exhibitions – in Russia, Germany, China and the UK allowed us to showcase new Hydronic products developed and launched over the last year, and reinforce the IMI Hydronic Engineering brand.

The new APQP process and the increased investment in new product innovation have been the motor for the changes – and you can see the energy reflected in the sales and marketing teams, who are driving these products onto the market.

IMI Pneumatex not only showed off the recently launched and highly impressive Cyclone dirt separator – proven to be up to 9 times more efficient than any other on the market, but also the updated Connect

range of pressurisation and degassing systems. This range has revolutionised the way these devices can communicate within building management systems (BMS) and even allows easy remote control from the comfort of the user’s office or home.

IMI TA has been focused on developing a number of more compact, more precise valves to more effectively help control flows in water-based HVAC systems. The new TA-Pilot-R is already setting new market standards as a modern compact differential pressure controller, uniquely combined with PILOT technology. Up to 80% lighter, twice as fast to install combined with up to 40% better control accuracy... that’s hard to beat.

The IMI Heimeier product category has in particular honoured its innovative engineering heritage this year with the launch of the next generation automatic TRV – Eclipse - making the highly successful Automatic Flow Control (AFC) technology even smaller, smarter and simpler to use. To find out more about Eclipse, see page 19.

IMI Hydronic exhibition season!

WRITTEN BY Natalie Zeranska Head of Marketing Communications IMI Hydronic Engineering

Getting hands on with Eclipse at ISH

Explaining how the new Compresso Connect functions at the China exhibition

Products live in action have the most impact on customers

17

Critical Precision Hydroniccustomer focus

IMI Remosa has been awarded a multi-million euro order to supply FCC (fluidised catalytic cracking) valves to the Rapid Project in Malaysia, owned by Petronas.

The RAPID (Refinery and Petrochemicals Integrated Development) Project, aims to build a world-scale integrated refinery and petrochemical complex in the Southern Johor Region in Malaysia. It will have a capacity of 300,000 barrels per day, producing gasolene and diesel to Euro 4 and Euro 5 specifications, as well as supplying feedstock for the petrochemical complex.

The petrochemical units will produce highly specialised grades of products such as polyethylene, polypropylene, synthetic rubbers and others. The refinery will use the latest technologies to produce these products following stringent environmental regulations.

IMI Remosa has supported Petronas for the design and supply of FCC critical valves since the early stages of this project, from the Front End Engineering Design up to scope of supply with the Engineering, Procurement and Construction company based in Taiwan.

The award of the contract is a result of the strong commitment and dedication to Customer support by the IMI Remosa team over a long period of time, and further orders for additional part of the refinery are expected.

IMI Remosa’s FCC valves heading for MalaysiaWRITTEN BY Fulvio Menini, Sales & Marketing Director, IMI Remosa IMI Critical Engineering

IMI Critical has secured a new five-year framework agreement with Statoil for the provision of control and choke valves through IMI CCI. This means that IMI CCI has had a continuous framework agreement with Statoil for the provision of valves since 2007.

The new framework agreement, which was signed by Karl Wonisch, Managing Director, IMI CCI Austria, was won due to a concerted team effort over six months by IMI CCI colleagues Michael Pedigo (Project Manager), Sanja Peric (Inside Sales Engineer), Ronny Simon (Applications Engineer) and Siegfried Karner (Contracts Manager). The agreement covers the supply of control and choke valves, field personnel, maintenance facilities, and the equipment and documentation for the supply and service of the valves and associated spare parts. The agreement covers primarily brownfield operations.

The agreement establishes a challenging delivery KPI of 95% on-time delivery for all Statoil projects.

“This is a key customer who values what IMI Critical brings and even more importantly, it will enable us to win a larger share of Statoil’s business.” said Trevor Sands, Head of Control Valves.

New 5-year framework agreement secured with Statoil

Critical secures major international oil & gas contracts

WRITTEN BY Rob Campbell Vice President Sales, EAME, IMI CCI IMI Critical Engineering

IMI Orton has won eight contracts, totalling tens of millions of euros with three different customers to supply valves and actuators for the Yamal LNG project, one of the largest industrial projects in the Arctic, with potential to win still further contracts.

Yamal LNG is based in the estuary of the Ob River in Northern Siberia, and is ice-bound for nine months of the year. This makes for a highly challenging environment for LNG production. Nevertheless, over 200 wells are expected to be drilled to

develop the huge South Tambey natural gas field, where reserves are estimated at more than 1 trillion cubic metres.

Whilst IMI Orton’s long experience of operating in hostile environments was clearly a major factor in its contract wins, early engagement with Chicago Bridge & Iron Co (CB&I) after they were awarded the front-end engineering design contract was also key.

IMI Orton experts travelled to London to meet CB&I to highlight the technical advantages of the IMI Orton TRI-X solution,

with its replaceable seat and seal ring on the valve’s body and disc respectively. These features mean that, should maintenance be required, the sealing elements could be replaced locally – an important factor when the site is so remote.

Alberto Aliani, Managing Director of IMI Orton, said: “The important message is that on a large project it is important to jump on board in the very first phase and follow all the parties during the entire project life. This is what has helped us win multiple contracts for Yamal.”

IMI Orton wins multiple contracts for Yamal LNG projectWRITTEN BY Enzo Stendardo Marketing Director, IMI Orton Italy IMI Critical Engineering

customer focus


IMI Critical is a key partner supporting oil production and refining around the world

18

WRITTEN BY Enzo Stendardo Marketing Director, IMI Orton Italy IMI Critical Engineering

IMI Z&J Houston faced a real challenge to meet a customer’s outage requirement – they had 14 days to complete refurbishments on 27 wedge within wedge valves, ranging from 8” diameter to 12” diameter for a high profile project.

To achieve this challenging assignment, the team needed to achieve a Takt time of 1.9 valves a day – greater than the current machine capacity and set up requirements allowed for.

Calculating that they were 8 valves behind schedule, the team challenged themselves to find efficiencies to meet the customer’s challenge. Improvements included:

l Designing special jigs to enable a quick change from one part to another

l Special gauging and positioning tools to enable faster set ups

l Modifying fixtures to allow two different machine operations to be run without the need to remove and set up part (eliminating one whole set up per part)

l Training the whole team on job setup in advance

Thanks to a superb team effort, with collaboration between engineering, quality control, machining, and planning, all 14 valves were successfully delivered a day early.

SMED helps IMI Z&J Houston meet customer challengeWRITTEN BY Daniele Cecchelli, President, IMI Z&J Houston IMI Critical Engineering

Sales teams are the lifeblood of any organisation and Precision is working on a series of projects to improve its sales teams’ effectiveness. Across the division, many individuals have been seconded to work on projects aimed at ensuring we have ‘best in class’ efficient, standardised processes to support our sales teams. Each project is clearly scoped and prioritised according to commercial requirements, explored, consolidated and following a successful trial, implemented and finally defined by a SOP (standard operating procedure).

Recently, we have focused on finalising a standardised sale cycle process, which will be trialled in the US, delivering common language and alignment on opportunity tracking. A new process for sales opportunity qualification has also been trialled and is in the process of being implemented within our Pivotal customer relations management system. Standardised account development plans have been agreed and will be automatically generated from Pivotal in the near future and we are working hard to improve our process and roll it out across the division so that we have one system to interrogate for all sales related reporting needs.

Helping sales teams be more effectiveWRITTEN BY Awaiss Mirza, Sales Efficiency Manager IMI Precision Engineering

During the 2015 ISH Exhibition in Frankfurt earlier this year the main highlight was Eclipse – the next generation automatic thermostatic radiator valves from IMI Hydronic Engineering. And with Max the Dragon as the face of the campaign it certainly was the most unconventional product launch we have had.

The concept behind the creative campaign was to highlight the unique features of Eclipse: the new TRVs (thermostatic radiator valves) help to keep radiators incredibly silent and are extremely accurate in terms of performance. So much so in fact, they can even be used to control the precise room temperature required to hatch the egg of the bearded dragon – otherwise known as the Pogona Vitticeps family of lizzards!

And with no risk of banging radiators, Eclipse additionally ensures a calm and noise-free environment for the new arrivals.

IMI Hydronic Engineering hosted Max and his wife at the ISH Exhibition booth as the star attractions for the IMI Heimeier product brand. It certainly got a lot of inquisitive looks from the 6,000 plus visitors to our stand. In addition to a VIP international press event, we also invited almost 100 special guests to an evening event at Frankfurt Zoo. The Australian-themed evening (Max comes from Australia) celebrated the launch of the Eclipse and customers had a chance to see an Australian cowboy performance, have a go at cracking a whip themselves, and enjoy the sounds of the didgeridoo – not forgetting to take pictures with Max in the reptile house.

Meet Max the Dragon - the face of the new Eclipse campaign!

WRITTEN BY Aleksandra Bejer Marketing Co-ordinator IMI Hydronic Engineering

Beyond this, we will be focusing on generating a new sales league table to identify pockets of divisional best practice and ensure our standardised processes are robust and followed. We are finalising a communications strategy to ensure our sales teams are more aware of what we are working on, and how they can get involved to help grow the business. We are planning a trial in the UK on efficient and effective visit planning to maximise our time in front of our customers.

Each of these projects will improve the effectiveness of our sales teams and support our growth agenda to outrun the competition.

19

Critical Precision Hydroniccustomer focus

customer focus

Iveco is a well-known global player in the commercial vehicle sector and manufactures everything from light vans to huge construction and mining vehicles. They have been an important customer of Precision Engineering – we continue to supply them with check valves on their new heavy trucks and solenoid valves in special vehicle applications.

In 2014, Iveco contacted Precision Engineering to see if we could supply individual solenoid valves and regulators for a pneumatic system on their latest 2016 Euro 6 Stralis truck. We really showed our ‘Engineering GREAT’ credentials and developed an integrated manifold solution containing a solenoid valve, pressure & relieving regulator along with integrated tubing connections. The solution clearly impressed and we responded quickly to their requests for prototypes for both laboratory and on-board vehicle testing.

This contract win was a fantastic team effort:

l Project Manager Darren Brunt and Technical Manager Simon Lyons managed customer relations and offered fast response to evolving specifications

l Darren also worked with Design Engineer Daljit Singh spending time with a Chinese die-cast supplier to ensure specification & quality standards were achieved

l The engineering and product team ensured the optimum solution was offered to Iveco by presenting six different design concepts - the Fradley team really pulled out all of the stops to deliver this.

Securing this new contract has been a great achievement for the business, and I remain confident that with the continued support of the wider Precision team we can deliver great new solutions to an ever increasing customer base.

Precision wins an important Iveco contract - ‘Engineering GREAT’ in action!WRITTEN BY Steve Green Business Development Director, Continental Europe IMI Precision Engineering

IMI CCI won contracts totalling £22m in 2014 to supply Kazakhstan’s Kashagan Giant Field, the biggest oil reserve discovered in the last 30 years.

The business win, for choke valves, aftermarket services, HIPPS (High Integrity Pressure Protection Systems) and emergency shutdown gate valves, allowed the project team to scoop the IMI Critical Award for Commercial Excellence at the recent divisional conference. The Kashagan Field is an example of an extreme operating environment where IMI Critical excels. Based in the Caspian Sea, which freezes over completely during the winter, but experiences very high temperatures in the summer, IMI Critical has had an installed base of choke valves and HIPPS in the region since 2006, and secured an aftermarket contract in 2013. This win for an additional £22m of equipment is for the next phase of the exploration programme there. Product build and integrity were of utmost importance, following delays to the programme due to the discovery of pipe cracks. The IMI CCI team faced several challenges in winning the contract, including achieving Fire-Safe Certification and Fugitive Emission Certification to ISO standards. Thanks to close collaboration between development, project management, sales and operations, the team were able to align their solution with the needs of the customer and project to secure this outstanding deal.

Kashagan order wins IMI Critical’s internal award for Commercial ExcellenceWRITTEN BY Mike Semens-Flanagan Director Strategic Planning IMI Critical Engineering

Simone Zuccerini and Rob Campbell receive the award from Roy Twite

Left to right, Daljit Singh, Steve Green, Darren Brunt and Simon Lyons


people

Following a review and extensive consultation we are delighted to announce the launch of our two new leadership and management/supervisory development programmes.

Both have been developed to support and facilitate our five year strategic plan to Fix, Focus and Grow, building a business that will last. The programmes are designed to allow sharing of best practice, collaboration across the business and will support us in building a strong talent pipeline to achieve our ambitions, whilst enabling leaders and managers to build and inspire great teams.

Leading the Way to Engineering GREATThis programme supports senior leaders across IMI to grow and sustain their businesses to realise our full potential. The programme completed over several months consists of 3 modules of 3 days including:

Module 1 - Leading Performance

l Business strategy, financial drivers and management, driving performance, developing strategies for growth

Module 2 - Leading Self

l Leading self and others through change, quality of thinking, developing resilient organisations

Module 3 - Leading People

l Building sustainable and high-performing teams, collaboration, coaching for performance, building accountability in self and others

The first group of senior leaders started the programme on 20 July and further senior leaders will be invited to attend subsequent programmes.

Being a GREAT IMI ManagerThis workshop supports managers/supervisors to improve business performance through their own performance and that of their teams and will focus on:

l Applying key IMI processesl IMI financial requirements including cost

accountingl Prioritising and delegating work for

continuous improvementl Building high performing teamsl Decision making, accountability and

communication skills

The workshops will run in the UK, USA, Germany and Europe during 2015. A full global rollout will take place in 2016 with programmes being delivered in-country and in local languages.

Participants for both programmes will be selected and approved by divisional managing directors.

IMI leadership and management development programmes

WRITTEN BY Sue Hall Head of Capability Development IMI plc

Leading the way to engineering GREAT

IMI is a diverse and global organisation and from a Group Reward perspective this brings both opportunities and challenges! As we continue to grow and expand around the world, a key challenge is to ensure that we have people in the right place to meet business needs.

This is a complex area with key concerns regarding tax, immigration, social security and employment law. Group HR supports the divisions in moving key talent around the world, ensuring that employees and any accompanying family, receive the support they need in transferring successfully to a new country, in a compliant and cost-effective way. 2015 is a key time for IMI in this area. The start of the year saw the launch of the IMI Global Mobility Policy Standard Operating Procedure ( SOP) which provides a fair, consistent and transparent approach to managing international employee moves. The SOP and additional supporting material is available via the global intranet, under the HR Reward section. Another key area of activity is around short-term business travellers. Tax authorities around the world are increasingly focussing on individuals who spend increasing time in different countries as part of their roles. Group HR are supporting the Group Tax team in developing a framework for managing this, identifying high-risk travellers and ensuring that any compliance risks are managed accordingly. Finally, Group HR are working with divisional HR colleagues to understand IMI’s current employee benefit practices in all of our countries around the world as part of a project to identify opportunities for harmonisation and simplification. As IMI continues to expand globally, this will be key in ensuring that our employee benefit offering is competitive and leverages IMI’s global scale, allowing us to recruit and retain key talent. In supporting this activity, we’re pleased to welcome Andrew Burley, who joined us in May this year as Global Mobility & Benefits Manager. Andrew is based at IMI HQ in Birmingham and has significant experience in managing international assignments and transfers as well as overseeing global benefit arrangements.

Following the sale of IMI’s Retail Dispense businesses in 2014, it was decided that the Group’s US Corporate offices, which had been located in the Cornelius facility, would be moved.

The US Corporate office in Minneapolis was therefore closed in April and a new US Corporate Office established at Precision’s facillity in Littleton Colorado, where our team has been warmly welcomed by the President of Precision Engineering Americas - Robert Guerra, and the entire site. The Denver Corporate office continues to manage certain finance, tax, treasury, HR, insurance, pension and EH&S activities for the US businesses. This relocation will result in a lower cost to the business. The team comprises five individuals: Gary Dribnak, Risk Manager Americas; Susan Barkley, Senior Benefits Manager Americas; Julie Bennett, Manager, Finance & Tax Americas; Annette Rains, Manager Finance Americas; and myself. If you are in the area, please drop by and say hello to us.

Introducing SOP for global mobility & benefits

New base for Americas Corporate office

WRITTEN BY Liz Rose Head of Reward IMI plc

WRITTEN BY Steve RileyVP Tax & Finance Americas IMI Americas Inc, IMI Critical Engineering

21


people

“One of the biggest constraints to Hydronic Engineering’s growth strategy is having the people to deliver it” says Louise James, HR Director for Hydronic Engineering.

Ian Morris, European Operations Director agrees “We’ve done far too much external recruitment over the last few years, and we haven’t invested enough in developing our own people internally.”

This is especially true for core business roles, and so the Hydronic Executive Team introduced a Fast Track Programme in Operations.

The Fast Track Programme targets high potential employees, below the level of the plant management teams, and aims to create a pool of talent for senior operational roles. It lasts for 12 months, with a series of training workshops, as well as experience-based learning.

The workshops cover topics such as:l Health and Safetyl Leadershipl Leanl Operations managementl Maintenancel Process and Project Managementl Finance

Operations Fast Track ProgrammeWRITTEN BY Tatiana Pont CateretHuman Resources Manager, IMI Hydronic Engineering Switzerland

Here at Precision we’re committed to realising our ‘good to GREAT’ engineering vision. Developing a pipeline of new engineering talent is vital if we are going to deliver our growth agenda.

IMI Watson Smith in Leeds UK has been working hard to develop a close working relationship with the University of Bradford. Summer student interns from the university join the business for six-week placements to focus on real business projects. Having agreed project aims and defined outcomes is a great development opportunity for aspiring engineers, and some of our interns then go on to permanent jobs with IMI which really helps us recruit the right people for the future.

A ‘Best Placement Student’ award was won by one of our interns at the university’s annual awards with IMI Watson Smith receiving the ‘Best Placement Provider’ award. IMI Watson Smith also won a National Undergraduate Employability (NUE) award at the PwC sponsored event in the ‘Best New Provider of Work Experience’ category. This award recognises how strong links with local engineering universities and colleges can benefit everyone involved.

At our Precision Engineering Fradley UK site, we’ve worked hard to develop an effective apprenticeship programme to meet the skills shortage. Employees at Fradley get involved in promoting the scheme at local careers and school events. Our scheme combines local training centre attendance with IMI work experience, rotating through all areas of the Fradley business. Later in the scheme there’s more time spent in the business areas that the apprentice and their managers feel they will be best suited to in the longer term.

Award-winning career pipelines WRITTEN BY Claire Kennady

HR & HSE Manager, IMI Watson Smith IMI Precision Engineering

Fradley works closely with In-Comm, its external training partner and at the training company’s recent annual awards Fradley apprentice Mark Chamberlain won two awards; ‘Most Improved Apprentice’ plus ‘Adult Learner of the Year’ in recognition for his efforts and achievements. Precision also won In-Comm’s ‘Apprentice Employer of the Year’ award in recognition of the overall structure and delivery of its apprenticeship scheme.

It’s great to see the efforts we’re making to grow our own engineering talent rewarded – we offer GREAT careers with outstanding development opportunities.

Qamar Hashmi, Quality Manager and Claire Kennady, HR Manager with IMI Watson Smith interns Chris Popple and Beth Lowe Watson Smith in Leeds UK

Left: Ben Briguglio holds‘Apprentice Employer of the Year’ award certificate and trophy Right: Mark Chamberlain with one of his awards

The participants are encouraged to network and learn from each other, collaborating across all the factories. Each person has a three month assignment in a different factory and a member of the senior operations team as a mentor throughout the programme.

Whilst Ian Morris is the sponsor, all the plant managers are involved as tutors and mentors.

The programme was kicked off in April in Eysins, with very positive feedback from participants.


people

We warmly welcome Massimo Grassi, who joined us in June this year as Divisional Managing Director, IMI Precision Engineering.

Massimo graduated as an engineer from the University of Florence where he studied Fluid Dynamics. He has held a number of senior roles in the high-volume automotive industry, water technology and manufacturing sectors and joined us from Stanley Black & Decker. In addition to his experience as a business president, he has successfully led change programmes, delivered global growth strategies and successfully integrated new businesses.

Massimo’s induction benefitted from his attendance at the recent Precision Engineering conference where he described what he’s about:

“My business passions are firstly lean and continuous improvement – what is good today is going to be average tomorrow. My second passion is about performance – always outperform on commitments and the third is growth – the best possible evolution for the Company and finally, customer focus - customers should be at the beginning and end of all of our processes. My style is straight forward and open, I am a very accessible person but I expect everyone to be committed and perform to do their best. We need to work together to pull in the same direction to deliver our promises.”

Massimo is undergoing a comprehensive induction programme in his first few months and is looking forward to meeting as many of his divisional colleagues as possible to see and hear first-hand how the business is currently performing and what’s needed for us to succeed on our journey to excellence.

Introducing Precision’s new Managing Director

WRITTEN BY John MocklerDivisional HR Director, IMI Precision Engineering

Ajitkumar Sreekumar has been appointed President, IMI Critical Engineering, India with immediate effect. In his new role, Ajit will report directly to Roy Twite, IMI Critical Divisional Managing Director.

This new appointment reflects India’s potential as a significant growth market for IMI Critical, and provides a focal point for all the divisional brands operating in India. Similar roles exist in China and Russia and have proven very successful in ensuring

a coordinated approach and strategy to enable us to win business.

Ajit will continue to work closely with the control valves organisation but will establish the necessary structures and relationships to support growth in the petrochemicals businesses, the isolation businesses and IMI STI.

Critical appoints first president for India WRITTEN BY Chris Battersby Human Resources Director, IMI Critical Engineering

We are delighted that Lord Smith has been appointed as chairman of IMI plc. A comprehensive search process, led by Anita Frew, former senior independent director, on behalf of the Board, was undertaken by an external executive search firm, and in March 2015 we announced that, subject to his election at our Annual General Meeting (AGM), Lord Smith of Kelvin would succeed Roberto Quarta as chairman.

Full biographical details of Lord Smith can be found on the IMI plc website, but it is safe to say that his high level board credentials, his extensive industrial, international and M&A experience means he is the right person to succeed Roberto at this important time in our evolution.

We are pleased to report that Lord Smith was elected to the Board at the AGM on 7 May with an overwhelming majority, indicating that our shareholders also believe he is the right man for the job. An unexpected show of support for our outgoing and incoming chairmen occurred at the end of the meeting when Roberto was interrupted by a shareholder who handed him a bottle of Dom Pérignon for his services. At the same time, Lord Smith was given a bottle of brandy!

Lord Smith attended the gala dinner at IMI’s Group Conference in April and gave an address the following morning. Explaining how delighted he had been to receive the approach to consider the IMI position he told delegates: “My initial conversation with Anita reassured me that IMI would tick the boxes for me as it is a long-term business, a real company making a real difference by making things and has a proud heritage with a strong sense of place. We should be proud of British engineering and aim to develop its influence in global markets.”

Over the coming months, Lord Smith will be visiting IMI sites and looks forward to meeting colleagues from around the Group.

IMI welcomes Lord Robert Smith of Kelvin as its new chairman

WRITTEN BY Katrina Feeney Communications & Investor Relations IMI plc

23


Group: Katrina Feeney [email protected]

IMI Critical Engineering: Mike Semens-Flanagan [email protected]

Group Head Office IMI plc Lakeside, Solihull Parkway Birmingham Business Park Birmingham B37 7XZ United Kingdom Tel: +44 121 717 3700 www.imiplc.com

Next Edition March 2016 Do you have any articles for the EYE? Please submit your story ideas, copy and images by the end of December to:

IMI Precision Engineering: Jack Winters [email protected]

IMI Hydronic Engineering: Natalie Zeranska [email protected]

people

It was a case of survival of the fittest during a recent obstacle challenge for a team from IMI Hydronic Engineering.

The Belgian team of six showed their courage, deterimination and prowess during the annual Spartacus Run challenge. Not only was it an ideal opportunity to promote our new brand “IMI Hydronic Engineering”, but also an excellent team-building exercise. Together with over 15,000 other participants they completed a challenge which involved 15 obstacles in total, including swamp crossings, rafting, big jumps into pools, hill climbing, and going down waterslides. The most challenging of all was the 10km distance in the rough environment and countryside, testing the team to the limit.

The event was an excellent networking opportunity as a number of customers – installers and wholesalers such as Vanden Bergh and Radson also particpated with their own teams in the event. The network afternoon following the race was a sucess with customers enthusiastic about the event. Plans are already in place for next year’s Hydronic and Customer team!

IMI Hydronic Belgium is Spartacus-proofWRITTEN BY Rik Van Herk Programme Manager, IMI Hydronic Engineering

2015 IMI Way Day

WRITTEN BY Katrina Feeney Communications & Investor Relations IMI plc

During the week of 15 June, IMI businesses around the world stopped their usual work for a morning to take part in the annual IMI Way Day. Presentations given by site leaders clarified and reinforced themes from recent Group and divisional conferences, and colleagues were able to explore The IMI Way and its influence on everything we do.

Emphasis was put on the extensive investments being made at the moment and our progress as we continue our

journey to Engineering GREAT. Through a series of group activities, colleagues also looked at our refreshed Code of Conduct and the five behaviours that guide us.

For the fifth year in a row, many IMI employees spent an afternoon working voluntarily in their local communities. Whilst much of this activity was very much ’hands on’ - gardening/tidying/painting etc, other colleagues were able to spend time with vulnerable elderly people and disadvantaged families - helping out with daily activities such as serving lunches and shopping. A huge amount of planning beforehand ensures our efforts have a big impact on the communities we operate in.

Hydronic’s team in high spirits!

The entire team at Precision’s Queretaro plant in Mexico celebrate the IMI Way Day

SingaporeUnited Kingdom Italy

Documents

The IMI Newsletter Issue 3 August 2015 · The IMI Newsletter Issue 3 August 2015 Critical Precision Hydronic Engineering GREAT the IMI Way Mark Selway summarises our interim results