David Lewin

Who’s Going to Take the Lead? | David Lewin, GMBA-UK

I’ve just moved our boat to a swanky marina on the south coast of England – all very smart with spotless facilities, wide pontoons and most things you could wish for in a marina. However when I went to lodge a spare set of keys with the harbour office a found myself behind a man complaining that he couldn’t park his Ferrari. He was quite opinionated about the size of the parking spaces and demanded to know what the marina was going to do about it. Not that the parking spaces were narrow, they were pretty standard size, but once you fill your carpark with SUVs from Stuttgart, Coventry and a few from Crewe there isn’t much room left to open the two doors of a red Italian supercar. A ‘first world problem’ as they say.

Much the same goes for the boats in the marina. Certainly several of the World’s leading powerboat builders use this marina as a floating showroom for their wares but the average size of the boats seem inexorably to get larger and larger so that manoeuvering in and out of the berth in any sort of weather can become quite challenging. As well as larger boats, no-one seems satisfied without a multiple outboard motor installation on the back – and not small outboards either – burning petrol (gasoline) rather than diesel.

It has become an ‘arms race’. I suppose we should be thankful that there are ever more people with enough money to support our industry and its growth in ever larger and more powerful craft as indeed I am one of those involved in the construction of some of these boats but deep down in my gut I can’t help feeling that all this is unsustainable, certainly in its present form anyway.

Haven’t the people who buy these craft and engines heard about the climate emergency? Or do they feel it doesn’t impinge or have anything to do with them? Is it still alright for them to specify twin German, American of Swedish high horsepower diesels or indeed two, three, four or even five 450hp outboards on their transom? All this must ultimately be unsustainable. Do we all secretly acknowledge this but whilst the customer is buying we are happy to ride the wave? Who is responsible for moving our industry to a more forgiving, recyclable, carbon neutral and sustainable future – the customer or the manufacturer?

There are plenty of initiatives out there. We are beginning to see some meaningful electric or hybrid power plants, there are people developing fibres such as hemp and linen to reinforce bio resins and there are low friction displacement hull shapes out there too.

But the mainstream carries on as if nothing has changed. Whilst the auto industry will have to stop producing cars with internal combustion engines by 2030 and be able to recycle their product, apart from a very small number of builders, we continue to use glass reinforced polyester and ever larger (comparatively speaking) emissions producing engines.

Now you could argue that the technology is not completely there yet. Nothing offers the energy density of liquid combustible fuels such as petrol and diesel and the cost of the newer fibre and resin systems is still prohibitive for mainstream craft. You could also argue that whilst there is still such a demand for the current vogue of craft we should continue to give the customer what they want.

But I can’t help feeling that this is the sign of an industry that has for too long followed the curve rather than being on the front edge. Apart from the adoption of GRP in the 1960s, boatbuilding has rarely been at the forefront of service or technology.

The change to a fully sustainable future must come so why not embrace it. I’m still waiting for the first leading boat brand to announce to the world that it will only be producing net carbon zero craft from some year not too far into the future. I was amazed and impressed when Volvo Cars announced that it would go fully electric a few years ago. The technology is still evolving and we may yet see hydrogen become the fuel of the future, but Volvo gained a lot of points in my mind for having made the leap and committed to the R&D that it would need to fulfil their dream.

Why can’t we do that in our industry? Where is the company that is going to lead the way? We know change is coming so let’s be helping form the shape of that change. Although I celebrate the craftsmanship and ingenuity in some of the magnificent boats in my marina I sometimes feel a bit ashamed of the conspicuous consumption I see in front of me. There are plenty of people out there willing and ready to buy boats – let’s not sell them something that will pollute our world for years to come.

28-06-2021

David Lewin, GMBA-UK
+44 7767 687 987
david.lewin@gmba.blue

Disclaimer: Global Marine Business Advisors and its associated website www.gmba.blue are not registered legal entities. GMBA is a network of independent marine industry advisors. In all articles the opinions expressed are those of the author and does not necessarily reflect those of GMBA

When it’s gone it’s gone! | David Lewin, GMBA-UK

When it’s gone it’s gone!

Around the turn of the century, I was running a mail-order chandlery company in the UK which was headquartered in Germany. It was the first time a dedicated mail-order/internet only business dedicated to boating accessories had been tried in the UK rather than as an extension to the regular ‘bricks and mortar’ chandlery store.

Naturally when a professionally produced and styled catalogue hit the doormats it created quite a stir, not only because it was new but the company also undertook to manufacture or find many of its own products. We often stocked limited quantities of the major brands just to demonstrate what good value the ‘own brand’ products were. As a result we became quite successful very quickly and soon had a customer base all over the country.

Looking back on it all now everyone would recognise the business model. Stick to the centre ground – nothing too esoteric that might have low demand – and manufacture a finite amount that will not leave you with unsold stock at the end of the year. You don’t have to look farther than the current German discount supermarkets to see the trend.

However in those days, life was very different. Boating is a hobby, a pastime, a way of life, where we often try and leave the rules of business behind. We regard the boatyard manager as someone we can discuss our boats with and the chandlery staff as colleagues who will work with us to find the ‘bit’ we need. Your friendly chandler was like your doctor or solicitor and was there to look after your every whim. When we exhibited at the London and Southampton Boat Shows, customers would come with great shopping lists of items they would need for the season from small electronic widgets to suits of foulweather gear and safety equipment.

Based upon the aforementioned German business model, we simply did not stock all these items – it’s not what we did. Instead of ringing round manufacturers and ordering in single quantities of various items, we bought a suitable range of products in bulk and as a result could offer some stunning prices but if we didn’t have it, you couldn’t either. We’ve all heard the comment that if a product has ‘marine’ written after it, it is going to be expensive – well, we were actually trying to do something about that but it’s not how the customer base wanted to purchase it’s boating equipment at that time.

We can see it all now, Aldi and Lidl had been doing business in Germany for some time by then and people there got used to the fact that if you wanted something at a good price, you would have to buy it when you saw it and when it was gone it was gone – and no, we didn’t stock the other brand….!

We tried for some time to overcome this in the UK (the Germans never really understood why we needed this service) by having an account with various UK suppliers so we could buy in some specialist equipment but as we all know this is very time consuming and therefore expensive to operate.

As it happened and for whatever reason the pound sterling started to drop against the euro and all the good work we’d done in sourcing in bulk started to be eroded. This in turn put pressure on our ‘special parts department’ so we had to close it and customers went back slowly to their old ways of discussing their needs with a local supplier and probably paying more for several items.

Roll on 20 years and it just seems natural. Most of us shop – or have shopped – at Aldi or Lidl and rushed to the centre aisle to see what there is before it’s gone. We buy our mainstay groceries there before going on to a ‘full-service’ supermarket to buy the stranger things on our shopping list – and so it might have been for this pioneer of the online chandlery but it’s time had not yet come in the UK. It has to be said however, the internet then was nothing to what it is today and searching for parts was not easy if you didn’t know where to look so it was often easier to leave it to an expert – your friendly local chandler and in some cases that is still true today.

However it is yet another case of living in one culture and naturally thinking that another country would be exactly on the same wavelength. In this case we really hadn’t taken into consideration the conservatism of the UK market but who knows how it might have fared ten or twenty years later.

13-01-2021

David Lewin, GMBA-UK
+44 7767 687 987
david.lewin@gmba.blue

Making the Most of It | David Lewin

2020 certainly has been a strange year and as for the boating season, it didn’t get started here until half way through. Most boats didn’t get launched until late June or July so we have all been trying to extend the season and enjoy some quality leisure time for as long as possible.

Boating has been the perfect vehicle for this – fresh air, isolation from others and perfect for family and family ‘bubbles’.

For most people the season in the south of England has hitherto ended in September but actually there are many days in October (and even later) that are perfectly good for a cruise (the racers will go out in any weather!) and we had one of the best with a memorable sail to Bembridge for a seafood lunch! However the sail back was to windward and with the short days and the sun going down, we certainly needed our thermals and waterproof clothing!

A week or so later we had another great sail over to Cowes in a good 25 knots of wind. It was great fun for the active sailors on deck but by this time of the year the spray had a real sting in it!

And our season wasn’t finished then; my daughter and young family wanted to show us their new RIB which they had hardly had chance to use all year. However the only day we could all be together had 18 knots of wind and rain to go with it! Still we had a wonderful time blasting up and down Southampton Water but we all got very wet.

And then it dawned on me. We all go to boat shows and look at boats and their videos showing them being used in wonderful weather in warm locations. But more often than not that is not reality. If we want to get more out of our boating year and we are not going to travel so freely in the future, we need to think more practically about the boats we build.

It may be wonderful to dream about large open companionways, bimini tops and large sun lounging areas but I would have given anything to have a small doghouse or inside steering position on those late (or early) season outings. What’s more it might have made the difference that the less keen members of the family might have come too as they certainly would have enjoyed lunch in Bembridge or a glass of ‘fizz’ whilst moored in the River Medina.

My daughter and family will certainly be changing their boat for one with more weather protection as soon as they can and I would never own a sailing boat without a comprehensive sprayhood, but I believe if we want our customers to get more out of their boating season we need to think more about those who boat in the reality of a temperate climate and for whom a little more structured weather protection would mean they and their families would get far more enjoyment and for longer.

There are also areas of the British Isles where better weather protection is essential. One of the World’s greatest cruising areas is the West Coast of Scotland, but it is often said that you can have all seasons in one day! It is majestic and magnificent with numerous protected lochs and islands to explore but you may well lose at least one day a week to the weather. There is not much use for a bimini or cushions on the foredeck in that situation. What is more, it is not easy to charter a suitable sailboat for these waters. Anything built to be cost effective for the charter market tends to be of French or German origin who seem to have their sights firmly fixed on the Mediterranean. Could decks not be designed so a proper ‘hard top’ could be offered as an optional (or standard) extra and if the mainsheet is moved out of the cockpit and a rear folding hoop fitted, it can be used to create a full cockpit tent to extend the living space in poor weather.

Similarly, the ability to fit a small ‘cuddy’ on any motorboat gives the driver and crew some weather protection and the ability to be out of the wind and the waves. I am surprised that more small boats are not designed to be adapted to take a small wheelhouse or frame with zip-out canvas panels.

If we want our customers to get more out of their boats we need to make them more user-friendly and that means for temperate climates as well as tropical ones.

David Lewin: It’s the Little Things that Matter

Some years ago I was asked to work with a Finnish builder of fast aluminium boats to research if there was a market for their products in the UK. I remember travelling to the factory deep in a forest somewhere in the dark, having been driven extremely quickly on snow packed roads by yet another aspiring Finnish rally driver.

However the factory was ‘state-of-the-art’ with the most sophisticated folding and welding techniques and they certainly built a tough and durable product. Having looked round the plant we spent the rest of the day going through market data working out possible sales projections for the first five years. Who should we select as our dealer, which part of the country would be best suited to the product, how should we structure the pricing, how would we transport the boats and how would we organize the marketing and distribution?

It had all been such a rush the previous day that the next morning I had the first chance to ask the product development manager what changes to the boats he foresaw for the UK market. He looked at me with incredulity, wondering why anyone would want to change his beloved boats.

The problem was that no-one had visited the target market and taken note of the ‘cultural’ requirements of its customers. Perhaps it was right that I was there!

Firstly, the British Isles are surrounded by salty water, much saltier than the Baltic and as comparatively very little motorboating is done on our inland waters, the British are wary of aluminium corroding in our coastal waters. Although modern aluminium construction and finish is much more resilient than before, an epoxy coating may have helped allay those fears.

All the seas around our coast are extremely tidal with an average of 4.5m to 6.5m tide range with 12m in some areas. For that reason we can’t moor to a rock and climb off over the bow, we tie up to a mooring buoy, use an anchor (with chain) or moor alongside a floating pontoon. It is therefore critical that boats for use in our waters have a heavy duty bow roller (and preferably an anchor locker) and if they are over about 7m long have a mooring cleat halfway along the deck for ease of fixing a ‘spring’ to stop the boat drifting forward or backwards in the tide.

Most of our coastal waters are quite shallow and the waves tend to be very steep and short so any boat needs to have a bow suitable for this sort of use as well as many small boats being left on tidal drying moorings so also need to be able to take the ground.

Returning to our friends in Finland, some of the required modifications were quite feasible but others would require a considerable redesign of the boat so whilst some boats have been sold in the UK, they have never had the penetration that they possibly deserved.

The moral of the story is to make sure you really know the market you want to enter or get some really good indigenous advice! Spend a little time or money (or both) with someone who really knows and works in the market you wish to enter.

What can we learn from this crisis?

Lessons to be learnt in a crisis!

The importance of a flexible business.

If we look back over the last half century or so we appear to have had some sort of crisis or recession roughly every 10 to 12 years. Although we have never seen a crisis quite like this one, there have been some large upheavals such as the Oil Crisis in 1973, UK recession of 1981, the 9/11 attacks, the 2008 financial crash and the 2012 UK tanker drivers’ strike.

It is also a truth that some sectors are more prone to these fluctuations than others and the leisure boat industry is often the first to feel it. For it to succeed, so many ducks have to be in line at the same time; confidence and stability being the main ones such as a buoyant stock market to enable buyers to realize their savings or investments, a strong housing market and a steady and secure outlook for the economy as well as stability in our way of life without conflict and terrorism.

Sometimes you can see these things coming but more often than not they take us completely by surprise and it’s then when you have to adapt to the ‘new normal’. Most often it is not the companies with the best product that survive but the ones that adapt the best and the usual problem is having too high a fixed overhead that cannot easily be shed when sales inevitably fall off.

How often do we see boat builders taking on more staff, plant and equipment to ramp up production only to find them surplus to requirements when the downturn inevitably comes? The reason is simple; it’s easier to do it that way. By having your own staff in-house, you can make decisions later, work on specifications on the job and muddle through with less planning and management time. And let’s face it, who doesn’t enjoy going into the works and seeing your product being brought to life in front of you?

But when the crash happens it’s you that is hitting the wall! Suddenly you have too much production capacity and a factory unit you wished you didn’t have to pay for.

Many industries have discovered that the only way to weather these fluctuations is to outsource some or all of their production. But it’s hard. It requires decisions on specifications and quality standards at an early stage and then recording them as a written standard. Everything from the 3D and 2D working drawings to the level of gloss in the final lacquer. It means sample inspections and possibly ‘sealed’ comparative parts held in-house and at the contractor.

Other than the boat industry I have been closely involved with two other industries, the clothing industry, both in fashion and in watersports clothing and then in the paint manufacturing business. The clothing industry discovered the benefits of outsourcing several decades ago, not only to control costs but to add variety and flexibility in the product range. One might say that you can’t compare the complexity of a boat with a piece of clothing – correct – but when you make a mistake in the specification of a garment and you finally open the doors of the container, there it is – 5,000 times! I remember the story of a delivery of jackets from China which had been beautifully made but all the back neck labels were sewn on upside down because no-one had thought to put it on the specification. How many of us would know which way up to sew a Chinese label?

So it is hard – but it is the only way forward for an industry that swings to the whim of the world economy.

During my time owning a share of a paint manufacturing company, the business was not doing well at the start of 2008, so much so that we had to take a long hard look and a red pencil to anything we didn’t think core to our business. Out went our company delivery van, external warehouse, buffer stock and we outsourced dye stuff rather than make our own from pigments. By the time the crash came in the September, we were lean and mean and never looked back. There was a good deal of luck in that but it proved the point!

Outsourcing can be successfully used at many stages of boat production from some of the detail design drawing (such as making the 2D construction drawings from the 3D ‘space claim’), external moulders for hull, deck and small parts and the design and manufacture of the interior furniture. Running a full wood shop with attendant CNC machines and a finishing department with spray booths or a UV lacquer line is a very expensive business. Would you better asking an external expert to provide that service?

In all my 40 years involved in boating (this probably applies to any business), it’s not the margin you show at the bottom of your costing sheet that’s the problem, it’s the time lost in reworking parts that have not been adequately designed for production. If you outsource you can’t and won’t have these problems. Firstly the design has to be right and secondly any ‘fiddling about’ isn’t on your premises!

Sometimes it’s worth reappraising what one went into business for. In this instance it is to design a boat that customers will want to buy and then deliver it to them for a price that will have made a profit. Don’t let the bit in the middle drag you down!

By David Lewin

David Lewin of GMBA UK talks about the importance of getting it right first time.

The case for in-depth computer aided design

Apart from a brief few years running a mail-order company I have spent all my working life in or around manufacturing. In the late 1960s I still remember doing part of my apprenticeship in a traditional garment tailoring factory, lots of handwork with re-cutting and re-shaping parts as necessary. It was only through being sent to Germany to study production engineering that I realised how wasteful that method of manufacturing was and how the product could be somewhat further de-skilled by identifying and separating out the different tasks.

Upon my return to the UK, I became part of team that organised and ran clothing factories for a large group, creating some of the most efficient manufacturing facilities in the country, sadly later to be undermined by the lure of cheap labour in the Far East and the near total loss of that manufacturing sector. During that time I learnt (and it was easy to see) that it was not necessarily how fast the product could be built but about not wasting time between operations or having other forms of downtime. Time lost is money lost and you never get it back.

Because the clothing industry (and other FMCG – fast moving consumer goods) has always been under pressure it was forced to take up advanced technologies at a very early stage. We were experimenting with CAD/CAM in the early 1970s – computer size grading of the patterns, digitizing the patterns and waterjet cutting of the cloth. We undertook studies whereby we ‘commonized’ certain parts such as pockets across many styles so they could be made on pre-programmed machines.

So what has all this to do with boats? Everything. The boat manufacturing sector is under huge pressure, not necessarily to build more boats but to build them more efficiently, thereby offering better value or perhaps more importantly better margins so the industry can re-invest it its staff and equipment.

I now visit lots of boat builders and here we are in the 2020s with too many still being built by traditional ‘tailoring’ methods. There is still a huge amount of effort (quite rightly) put into creating a strong hull with a fair gelcoat but often with less regard to the inside of the hull and fixing such major items as the bulkheads in the right place – every time!

This means the bulkheads are too often cut with ‘green’ around the edges so they can be scribed in and everything else is then fitted to them. This means the boat can only built in a linear way; one section of the build after another – hull, bulkheads and bearers, engineering, floors furniture, deck, deckhead cladding etc. As these tasks mostly require different skills and lead times, the non-productive downtime is where all the costs mount up.

I’ve seen plenty of boat costings with every nut, bolt and piece of equipment on the Bill of Materials and even a fair stab at an accurate labour cost, but never a realistic quantification of the downtime.

Thankfully many have now seen the light and are committed to designing their craft on CAD as well as using advanced manufacturing methods such as vacuum infusion so there is some control on the inside dimensions of the hull. That having been said, it has been my experience that not enough time has then been allowed for the further design of the engineering and interior in that a lot of the finer details ‘will be all right on the night’! Unfortunately they so often aren’t and all these things impact upon one another.

The’ holy grail’ must be to have the design – all of it – right before commencing to manufacture; to have thought through all the little niggles like where the side cladding meets the deckhead or whether there is enough depth and width in the bow to create a proper bed etcetera.
If all these parameters can be fulfilled then the boat can be built ‘concurrently’ – ie: whilst the hull is being moulded, the engineering can be planned, ordered and such things as the electrical loom manufactured. At the same time the furniture can be committed to the woodshop or outsourced, any rigging made up and the soft furnishings planned and put into production.

That means all parts should be ready for assembly and no time wasted in constructing the boat – after all the automotive industry has been doing this for some considerable time now – parts are outsourced and only final assembly happens on the line.

The important point in all this is that there is no substitute for design time on the computer and building a complete virtual model of the boat. The time cost may look outrageous to some but there are no materials being wrongly or wastefully cut, no time spent chamfering or shimming pieces into place and no downtime waiting for parts to arrive or be manufactured. And of course the boat will finally be assembled in much less time.

Many companies in many countries have accepted this now, but it still worries me that many smaller companies in the UK, whilst using some form of CAD do not take it through to finish the job, usually because they are not sure exactly what they want and will decide when it’s in situ. Well, that’s no different to a potential owner asking for a change of specification during the boat build for which you would charge lots of money – only this time it’s costing lots of money in yet more downtime whilst decisions and lead times are considered.

It’s the smaller companies that in the main don’t have the resources to push through a difficult build and would therefore benefit most by working towards a complete design package before committing to fibreglass, resin and wood. “Measure twice, cut once”, I was always told. Take your time with the design and build the boat right first time- and on budget.

David Lewin – Global Marine Business Advisors