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2022 Kirkstall Precision Engineering Year End Review and looking ahead to 2023

2022 witnessed the aftermath of Brexit and the continued impact of Covid on elective surgeries and its impact on our business. We experienced a positive effect in the growth in sales orders and a negative effect on the availability of raw materials. These supply problems were due to demand as the world’s economy reopened after the pandemic and the lack of global production capacity during the pandemic.

At the start of January 2022, our management team had planned that this would be a year of stability and growth in the market. However, the Russian invasion of Ukraine threw the world into a new turmoil that nobody was expecting or had planned for.

Russia accounts for more than 30% of Europe’s gas for home heating, industry and generating electricity. As Europe relies very heavily on oil, gas and energy from Russia this pushed up the global prices for oil, gas, and energy. Ukraine is one of the world’s top agricultural producers and exporters and plays a critical role in supplying oilseeds and grains used in most food manufacture. Ukraine and Russia are also the world’s key exporters of minerals used in steel production.

It’s easy to see why for any precision engineering business, the shortage of raw materials and the rise of energy prices can be a cause for concern.

Planning for success in 2022 and well into 2023 and beyond.

Fortunately for us, we had pre-ordered a large quantity of raw materials for our forward orderbook and had held these in storage for some time. In fact, we had luckily foreseen the rush for raw materials once the world opened again and had collaborated with major customers to have forward orders or stocking agreements in place so we could safely satisfy their order requirements.

Regarding the rise in energy prices, we had again kept a close eye on world events and proactively addressed measures which we believe will safeguard us well into 2023. This kind of outflow price safeguarding is especially important to a business like ours where the cost of machines and energy can easily erode away at our bottom line.

Standard Costing drives more profits and allows re-investment.

We implemented Standard Costing in March this year and again this has been a real game changer in the way we quote orders and steer the business towards efficiency and profitability on everything we manufacture.

This step change has made the whole business more focussed on cost, gross margin and improving efficiency to increase our margins and this will continue into 2023 to combat the global economic pressures we are facing.

This type of focus on margins and profits enables us to invest in both people and machines. This year saw us purchase an EDM machine, two new Star machines and Solid CAM software, to drive future efficiencies.

And on the people front we have taken on of four new apprentices this summer. Our apprenticeship development programme was reported with National TV coverage in the news and showcased Kirkstall Precision to a wide audience. We also welcomed new starters in other departments, such as finishing, planning, quality inspection and CNC machine operation. All of which will help promote our skill-base and enhance our offering for for the future.

Raising our profile in the region and globally through social        

Kirkstall Precision’s profile as a specialised precision engineering company continues to grow through our marketing campaigns on social media. In fact, engagement on our social media posts has happened in countries as far away as the USA, South Africa, India and China.

Our regional profile was given a huge boost also when we were honoured to host a visit for the West Yorkshire Mayor Tracy Brabin and representative from Leeds City Region Enterprise Partnership. During the visit they all commented on how impressed they were with our facility and the competencies they witnessed during their tour as well as the wide range of sectors and local and international client base that we have.

A healthy order book and focus on medical

Our order book has grown significantly this year, one of the main contributions to this is our strategy to offer customers bespoke supply chain agreements and stocking agreements. Our customers are accepting these proposals and committing to long term orders.

These actions demonstrate that the hard work we have all contributed to is now showing dividend. These forward orders indicate commitment from our customers and more importantly their confidence in Kirkstall Precision as well as security for the business moving forward.

We believe that 2023 brings a golden era for the medical device sector. The graph below shows the backlog in elective surgeries since the pandemic, just in the UK alone this is above 7 million patients. The picture is the same globally and the UK is only a small market for medical devices. To take advantage and ensure that the market is aware of our existence, we will have a stand at the Medical Technology Exhibition in March 2023, showcasing our expertise to potential new customer.  This will be a first for Kirkstall Precision.

We are already seeing lots of enquiries and forward orders with our medical customers and this is a unique scenario and as a company we need to be proactive to win this business.  To ensure we can do this in 2023 we will be implementing a new production planning and scheduling software called Orchestrate, this will help improve efficiency.

We will also be implementing ISO14001 Environmental Management Standard to drive environmental focus and improvements. Our team will drive strategic focus on refining our current business systems, further developing GEMBA walks and the implementation of 5S philosophy. Machine and operator efficiencies combined with effective cost management will also be one of the key factors for our success.

And finally…

No doubt 2023 will throw us some challenges, but as always, the management team here at Kirkstall are taking a proactive approach to ensuring we try stay ahead of any curves that come our way. Our educated analysis of world markets and geo-political changes has paid dividends in the past and we will continue to take this approach moving forward as we build on the success of 2022 and make 2023 even more successful for us, our employees, customers, and our partners.