Data – The Manufacturing Perspective

Thinking about the impact of data in manufacturing? 

Positive on the opportunities or concerned that your competitiveness may be at risk?

In this, the second in Polestar’s series of data articles, we take a brief look at the manufacturing sector, consider input on the accelerating data drivers in the space and give our take on things SME businesses in the sector might consider to ensure future competitiveness and, indeed, growth in business value.

An interesting question to kick off might be: 

Who do you trust with your data?

And a follow-on to consider:

What pre-requisites might you have before sharing data with competitors in the context of remaining competitive yourself?

Are cars made from plants our best shot at reducing their carbon footprint?

First we brought you shoes made from plants, now why not your cars, too?

More specifically, certain car components made from synthesised bioplastics. The carbon footprint of manufacturing a new car can be greater than that of running the car for its whole lifetime, so limiting the amount of environmental impact a car has in the manufacturing stage would be a great move for firm’s wishing to lower their carbon footprint.

Components such as dashboards, tyres, and steering wheels could be replaced with bioplastics made from waste plant pulp. Using plants to form polymers, rather than traditional, fossil fuel-based plastics would greatly reduce the immediate carbon dioxide output of any car factory. Fewer fossil fuels being burned and lower carbon footprints for factories – bioplastics seems to be an obvious choice. 

However, things are not so straightforward.  Recycling expert, Arthur Huang, however, says that bioplastics could potentially be worse for the environment in the long term. Although requiring less energy to produce, bioplastics would require masses of farmland to produce at the scale of conventional plastics, and those that are biodegradable actually end up damaging and upsetting the eco-systems they end up in, where conventional plastics would be ‘largely an aesthetic problem’ since they don’t react with their environment.

The solution may lie instead with recyclable products, rather than degradable ones. Researchers in Japan, for instance, are working on a material made from recycled wood pulp that could replace metal in car manufacturing within a decade. Ford, for its part, aims to start using carpets made from recycled bottles in its newer lines of cars, and already recycles 1.2 billion plastic bottles each year.

Another solution proposed is to use new, eco-friendly materials to make cars lighter and improve their fuel efficiency if using conventional fuels, or to improve their range if the vehicle is electric.

Europe has cut its car-based emissions by 24% in the last 10 years, so while the problem of climate change is daunting, it’s encouraging to see that technology is enabling us to change the way we operate to be more environmentally aware. 

At a more local level these issues are facing our clients as they seek to improve their carbon footprint and plastics content in their products. One such client is E Green, a business that produces amongst other things disposable tableware increasingly from plant-based and recycled materials.

As ever, we are keen to keep an eye on how  technology is shaping the way new businesses operate and adapt to 21st century concerns such as climate change.  

The love drug is at the core of business success

Every deal and and business decision we make relies on trust; without trust, we can’t rely on others to keep their side of the bargain, and so trust lies right at the heart of all business practices. 

Trust is a very human trait. Outside of Homo Sapiens, other animals find it very difficult to ‘trust’ other members of their species outside of their family structure. This is due to two assets of the mind that are unique to humans: theory of mind and empathy, one resulting from the other. 

Theory of mind is the ability to place oneself ‘inside’ the mind of another so that we might predict their behaviour based on what we know about them and what knowledge they posses. Empathy is the ability to understand the emotional state of another person based on personal experience in a similar situation. These two traits are unique to humans and have allowed us to elevate ourselves above all other animals due to our incredibly complex and effective social structures that, at their foundation, are built on trust.

Oxytocin is the key hormone involved in trusting relationships. Oxytocin arises when your brain feels it’s making a strong connection with another person, such as when we co-operate well on a team project. It lowers feelings of social anxiety and motivates us to co-operate with others by regulating the brain’s supply of dopamine. The more oxytocin your brain produces, the more empathetic you feel, and the more trusting you become. A good workplace will try to foster this kind of behaviour by encouraging teamwork and the sharing of ideas. Equally, by treating customers and clients as collaborators, rather than dollar signs, you will build a more trusting and natural business relationship that is more likely to lead to mutual success.

Oxytocin levels and, consequently, trust, are noticeably lowered by fear and the perceived threat of social embarrassment. If a manager rules as a tyrant over their staff, their team will not trust them, similar to how a business that doesn’t treat its customers with any respect will quickly lose them. When one is in a position of power, testosterone floods the body, which can lead to brash decision making and, in extreme cases, a disregard for the feelings of others. Keeping a close eye on how hierarchies present themselves in the workplace can be key to a trusting staff and customer base.

All of our deals rely on trust. Every failed deal can usually be put down to a lack of trust between those parties involved, whether that’s a buyer not trusting a future sales pipeline, a funder not trusting the management team, or a vendor not trusting the buyer.

Our key role in preparing a business for sale is to look at how we can enable trust to build between all parties through proper preparation, honest feedback and open lines of communication. Be wary of the effects of hormones in the workplace, how they are regulated might just be the difference between a successful deal and a failed one.

In data we trust – Are the police becoming robots?

We have all seen a considerable increase in technology focused firms, or firms with a significant technology angle to their operations. Technology increasingly impacts on everyone’s lives so it’s no surprise that policing has followed suit, with forces adopting an ever greater number of these new systems. Most recently, this has extended to the use of artificially intelligent algorithms (i.e. algorithms that have the ability to self-improve and refine themselves as further data is provided) for risk profiling, preventative policing measures, and crime investigation.

Success has been mixed and the police hierarchy might be wise to take a step back and consider how the new technology should be used appropriately, especially when public confidence in policing is reaching an all-time low.

This is a complicated topic, for the on the one hand budget cuts have put an incredible strain on police forces and, theoretically, new technologies should be able to free up officers time to do what the public want them to do most, which is to prevent and investigate crime.

As an example, a police force in the UK is using an algorithm to help decide which crimes are solvable and should be investigated by officers. As a result, the force trialling the solution now investigates roughly half as many reported assaults and public order offences. This saves time and money, but some have voiced concerns over the way in which the algorithm could bake in human biases and lead to certain solvable cases being ignored. The tool is currently only used for assessing assaults and public order offences, but may be extended to other crimes in the future.

The possibility of a “computer says no” response from the police when reporting offences or requesting updates on investigations, is not appealing. Needless to say, if the public believed that police officers had abdicated responsibility for investigating crime to computers, confidence in the police could collapse completely.

The concern is that these programs encourage racial or other profiling and discrimination, and that they threaten privacy and freedom of expression. Given that the data used to drive the algorithm is based on existing arrest data, it is likely that the system is already imbued with discrimination and bias from the way people policed in the past, now entrenched by algorithms.

One area where technology should certainly be put to better use is reducing the amount of time taken up with administrative duties (e.g. reporting, data cleansing etc.). There are many technology solutions available which could save time and cost by assisting in operational tasks, including voice recognition software, big data analytics engines (e.g. Alteryx), and other more bespoke search and reporting tools. This is an area of technology where we at Polestar have considerable experience, and can verify that there are significant potential benefits to clients who deal with very large amounts of data on a regular basis, such as the NHS and police forces.  

Overall, technology and software advances present significant opportunity for substantial improvements in all aspect of business as well as policing. However we should not be dazzled or beguiled into shifting responsibly for decision making to systems, which bear no responsibility for mistakes and may even exacerbate flaws already in place. 

Robbie’s Rehab, a wonderful support for kids recovering from brain tumours – please help me support them in raising £10,000 with robbiesroundmontblanc

On 30 August I will be setting off for a wee run around Mont Blanc as one of the 2,300 competitors in the 2019 edition of the UTMB.  I’m calling it Robbiesroundmontblanc

What is the UTMB – The Ultra Trail Mont Blanc is a 170km foot race with over 10,000m of climbing and more painfully descending.   The course is described by the French as follows :

“We will be rubbing shoulders with Aiguille de Bionnassay and crossing Col du Bonhomme by moonlight. At sunrise, we will cross Col de la Seigne into Italy and the magical Val Veni overlooked by Noire du Peuterey and the glaciers descending Mont Blanc. Later we will reach the Val Ferret, guarded by Dent du Géant and Grandes Jorasses before finally turning into Switzerland to relish the beautifully protected countryside.

“We will have to put up with fatigue, to overcome our fears and anxieties and climb over Bovine and Les Tseppes. Then, with Aiguille Verte in front of them, under the vertical heights of the Drus and with majestic presence of Mont Blanc before us, we will dive down towards the finishing line in the heart of Chamonix.”

For me that will be 32-38 hours later – 170 km non-stop.

So why would I do such a ridiculous thing?  To raise funds for Robbie’s Rehab, a charity set up in memory of one my youngest child’s friends, Robbie Keville, who died three and a half years ago from a brain tumour aged 10. This was the second tragedy to hit the Keville family as his mum had died when he was six of breast cancer.

Mark Keville immediately set up a charity called robbiesrally which raised funds for a pioneering outpatient rehabilitation service at Southampton Hospital for other kids like Robbie.  In just three years, it has raised over half a million pounds and helped countless kids.

Please support me support these kids.  

I am being ambitious with my target of £10,000.  A pound for each metre climbed, every metre supported will be gratefully welcomed by the team and especially by me at 3 a.m. on the second night.

Donating through JustGiving is simple, fast and totally secure. Your details are safe with JustGiving – they’ll never sell them on or send unwanted emails. Once you donate, they’ll send your money directly to the charity. So it’s the most efficient way to donate – saving time and cutting costs for the charity.

What comes next – No deal?

Love Boris or loathe him, a new broom has swept through Westminster and a million-to-one chance of “no deal” has given way to Gove’s working  assumption that it will happen. Change has always created opportunity for the canny.  It’s time to be canny.

The possibility of no deal is rising and the CBI is advising all its members and businesses to prepare – again – for a potential no-deal Brexit. The cost and what it diverts resource from cannot be ignored, neither can the difficulty of time, logistics or uncertainty, but it is time to ramp up efforts. For every firm, these preparations will take a different form, but three principles for business preparation for no deal are important.

The CBI, in its report “What comes next”, urges the UK and EU to capitalise on the new political dynamic presented by the appointment of the new Prime Minister to work towards agreement on a deal that would be a catalyst for future growth and prosperity.

The report is based on thousands of conversations with firms of all sizes and sectors, including no fewer than 50 trade associations, spanning all areas of the UK economy. Overall, it illustrates that even with mitigation, no fewer than 24 of 27 areas of the UK economy would experience disruption (see the chart below).

With 128 pages, including the padding, it is a long report.  So, have a coffee ready.  Like many, I am tempted to put my head in the sand and hope it all goes away.  But we need to raise our game and prepare for what may come.  Those that do will be stronger and ready for any opportunities that will appear.   For where there is change, there are always winners.

Do you feel like an impostor in your place of work?

Impostor syndrome is rife in the workplace. 70% of people will experience it at some point during their working life.

Impostor syndrome arises from the feelings of inadequacy and uselessness an individual feels when they believe they aren’t good enough or well unqualified for a certain task.  This can lead employees to feel like a ‘fraud’ in the workplace, which can be incredibly demotivating.

Impostor syndrome largely affects five types of people:

Unfortunately, many of these thought processes are at odds with the modern world of work and business, so people who find themselves stuck in these ways of thinking will often find themselves anxious, depressed, and demotivated.

So, what can be done about it?

Inclusivity fosters feelings of belonging which, in turn, dulls feelings of inadequacy. The first step a company can make to mitigate feelings of impostor syndrome is to be more involved with employees by giving them feedback and scheduling reviews so they can set their own tangible targets for development. Since many people working in a highly technical workplaces often feel they are expected to know every facet of their work from day one, it can help for supervisors to let them know that knowledge of the role develops over time, and to offer them a strategy to achieve this.

Leading by example and not by oppression can also go a long way to helping people feel part of the workplace. If people can see their boss as an example of how to be successful, and understand how they go to their position, this will inspire them to achieve the same, realising it is a possibility.

Similar to my last blog post on trust in the workplace ‘The love drug is at the core of business success’, the message here is to keep an eye on the mental health and well being of your employees. Employees that feel they’re making a difference in their workplace are more likely to work harder and, therefore, are more likely to bring your business success.

Here at Polestar, we do everything we can to make sure our clients, and where appropriate their team, feel comfortable and informed about every aspect of their transaction so they don’t feel they’re being left out of the process, of course we miss the target sometimes, but aim to quickly rectify that.  After all all deals rely on Trust and security.

The social media paradox

Be it Glassdoor, Trustpilot or Linkedin there is no hiding from social media as the use of e-commerce and social media platforms transforming the business to customer or other stakeholder relationships. 

In a world where consumers are driven by online influencers or content marketing, a strong online presence is crucial in connecting with customers, yes even B2B. Along with the additional benefits this can provide, for example, brand building, sale conversion and awareness, the arguments against are thin.

It’s all positive – isn’t that what we all want to hear!

In reality, a poor online presence can be just as damaging. Social media platforms are an excellent medium for complaints which can subsequently harm future sales or brand image. Once online, it can be difficult to rectify with the 21st century consumer more “connected” than ever.

The key to running a successful online operation is management. Most business exercise this through an internal social media team or more commonly for smaller organisations, an outsourced service. 

Whilst any bit of innovation carries an element of risk, maintaining a good online presence can be a significant value driver and key selling point for a M&A transaction. At Polestar, demonstrating our clients’ online presence has played a crucial role in attracting the right buyers, resulting in increased value to shareholders, employees and the business itself

The healthcare conundrum

Heathcare is one of Polestar’s key sectors.  Why would it not be as the NHS is one of the largest and complex organisations in the world. Annually, the NHS deals with over 245m patient visits with the reliance on the organisation increasing year on year. As the UK population steps closer to exceeding 74m by 2024 the strain on its services is set to continue.

The NHS conundrum of cost vs outcomes is a topic close the hearts of many (as famously demonstrated by Brexit campaigns in 2016). What is the solution? Do we continue to increase budgets or perhaps turn to privatisation and follow a model close to that of the USA?

There is no simple answer. However, where I do believe we can triumph, is using technology and the wider healthcare ecosystem to improve efficiency and the reliance on NHS services. In recent years we have seen the emergence of virtual GP applications (Babylon Health), health focused apps or artificial intelligence solutions. None of which have reached significant scale to address the healthcare conundrum. Where we have seen data transform various industries (e.g. Retail), the reality is that, for Healthcare, any solution using data is very much at its infancy. Less than 20% of the world’s medical data is held in a form that artificial intelligence tools are able to digest and learn.

Although I very much believe the future will encompass technology rich healthcare solutions. For the present, at least, we should continue to work towards an integrated healthcare service model that will help provide the health and care services required to meet the needs of the growing and ageing demographic. Be that in the shape of investing in the community or healthcare related services (e.g. adult social care).  BoJo has made this one of his promises.

The team at Polestar has significant experience within Healthcare be that through tech, buildings or provision, having worked on numerous transactions across capital raising,  valuations and disposals. Wherever your business sits in the market we would love to meet to chat through the issues and opportunities you face and understand how you plan to address them, maybe we can share how others have succeeded.

Amazon’s new drone delivery seeks to revolutionise the way we buy products

In 2013 Jeff Bezos promised delivery drones within five years. Six years later, Amazon’s CEO Worldwide Consumer, Jeff Wilke, is claiming that the company’s drones will be delivering packages to customers within ‘months’.

The news comes hot off the back of Amazon’s re:MARS event in Las Vegas at the beginning of June this year. The company took their time to show off the latest iteration of the drone: the ‘MK27’. The drone now features more advanced AI and computer vision systems than previous models, allowing it be fully autonomous and adapt to various challenging weather conditions.

The most noticeable design change from the previous iteration is the way in which the drone can now take off vertically, like a helicopter, but fly horizontally, like a plane. This allows the drone to have six aspects of motion, as opposed to the standard four afforded to more common modes of flying transportation – an attribute that Amazon claims will make the drone even more capable of handling severe weather conditions.

The delay in getting these things to market is largely due to the restrictions regulation puts on operating drones in civilian airspace – but this is something Amazon has finally been able to crack in the US, and hopes to start deliveries within the coming months.

This is all very cool but what does it mean for business, manufacturing, and technology?

It matters quite a lot. Amazon’s drones have a 15-mile range, can carry up to 2.2kg in weight, and can delivery products in 30 minutes from clicking buy. This could revolutionise the way people buy and consume goods on the internet and on the high street.

One of the few benefits the high street has over online shopping is the immediacy it affords shoppers. With delivery times of just 30 minutes, however, even this facet of physical shops will be severely challenged.

All this new technology is likely to impact other sectors as well. Lightweight and space-efficient packaging will need to be considered, given the space and weight restrictions of the drones. Distribution channels might need to be reassessed to ensure the availability of high-demand products within a 15-mile range of major delivery hot-spots. Furthermore, airspace restrictions will likely need reassessing, as drone delivery becomes the norm for more and more people worldwide. 

And this speaks nothing of the jobs that will soon be threatened by the technology. Why employ a human to deliver your goods when they might fall asleep or get distracted and cause a crash, or slack off on the job and cause inefficiencies? Surely employing a drone that will simply do the job better is the obvious option for any company to take, provided the tech becomes more accessible in the future. 

Taking the idea to its logical conclusion, if delivery drones mean the end of grounded delivery vehicles, how will this impact our roads and cities? Goods transportation accounts for about 20% of all traffic in the UK, and more so in cities, so the alleviation of all these excess cars could lead to more efficient roads and less traffic in cities. 

It’s a lot to think about for sure. 

At Polestar seeing disruptive technology such as these proposed certainly piques our interest. We look forward to seeing how Amazon’s plans come to fruition and transfer across to other business sectors.

The Pilot – June 2019 Newsletter

It seems an eternity since we last had summer, but it has finally arrived – sports days, World Cups, Glastonbury and G20 summit abound.  This year, we can add a race to be our next prime minister.  I must admit to joining the Conservative Party a couple of years back following the BREXIT vote, so as to try and be one of many centralists looking to keep the Conservatives away from the hard right.  I fear an insufficient number have.  

The Reith Lectures this year has been given by Lord Sumption and he touches on this very subject.  In the 1950s, there were millions of members of political parties to keep them aligned to the general population, whilst now there are fewer than members of the RSPB.  Those that are engaged are generally closer to the fringe as centralists have lost interest – see the rise of Momentum and the ERG.  Anyway, at least I will have a vote and it will be for Jeremy Hunt, who, despite his rhetoric, is a centralist. 

This month, we have been discussing all manner of topics (do see our Insights page for them all – 19 in total).  I have highlighted a few below.  Richard Hall has written the first of what will be a short series of white papers on the exponential growth in data.  

I have brought you a report from McKinsey on supply chains and news of the impending arrival of 5G, and Bhavik and Nisch brought discussions on the evolution of the retail customer and how data holds the key to the future of marketing.  

Our resident youngster, Oli, has brought us shoes made of pineapple husks, not as crazy at it may seem.  Have a read. 

And finally, I am pleased to say we have just appointed Sandy Ritchie who has joined us from EY.  I will introduce him fully next month. 


Charles Whelan