UK: The Wotton World Beater - RENISHAW PLC'S DAVID MCMURTRY. - Think of a British manufacturer who has revolutionised its industry, has a 70% market share worldwide, and exports 90% of its production. You probably can't. But if you were a Japanese manufa

Last Updated: 31 Aug 2010

Think of a British manufacturer who has revolutionised its industry, has a 70% market share worldwide, and exports 90% of its production. You probably can't. But if you were a Japanese manufacturer, you'd have little trouble naming Renishaw plc, an industrial trail-blazer in Wotton-under-Edge, Gloucestershire. Believe it or not, leafy Wotton is a place of pilgrimage for Japan's 200 machine tool-makers.

In 1990, a panel of Japan's top industrialists in the field of factory automation gave Renishaw's founder and chairman David McMurtry the ND Marketing Award for contributions to factory automation. McMurtry, 51, is only the seventh winner of this annual award, highly prestigious in Japan. He is the first non-Japanese ever to win. Previous ND award-winners include such luminaries as Teri Yamazaki, founder of the world's largest producer of machine tools, and Dr Seiuemon Inaba, president of Fanuc, the world's leading maker of computer controls for machine tools.

In the US, McMurtry is no less respected. The touch-trigger probe, McMurtry's revolutionary system for the measurement of machined steel to accuracies of millionths of a metre, is used by every US car-maker to ensure the accuracy of vital components like car engine blocks. At General Motors' Saturn plant, where the state-of-the-art Saturn model is supposed to be digging the world's largest car-maker out of its $8-billion hole, GM boasts that the plant is equipped with 24 Renishaw probes. On the space shuttle, where an accurate fit of the heat-shielding tiles is vital to the shuttle's surviving life-off through the atmosphere, every single tile is measured for accuracy by a Renishaw probe. "There's nobody in the industry I respect more," says Renishaw's joint managing director, Ben Taylor, of McMurtry.

Once one of the US government's two metrologists, Taylor left a job in Chicago running giant Bendix Corporation's metrology subsidiary for pastoral Gloucestershire for a chance to work for McMurtry. "To meet him, you might think he was the janitor. But he's brilliant. He's not just a metrologist, he's a physicist, and an expert in optics. The breadth of his knowledge never ceases to amaze me."

Metrology is the science of measurement, and it gets a lot more complicated than drawing a line on the wall against your child's head. When extreme accuracy is required, or if the measurements need to be a full set of three-dimensional co-ordinates, or if internal as well as external measurements are required, good metrology is vital to good manufacturing.

The world's leading industrial metrologist is a thin, unassuming man with sandy-coloured flaxen hair falling across his high forehead. Genial, smiling, and soft-spoken, he's the sort of man who always looks a size too small for his suit. In an interview, McMurtry is the antithesis of the typical public company chairman. He smiles a lot, answers questions briefly, impatiently, and occasionally vaguely, and sneaks regular glances across the room at his desk, as if he longs to return to tinkering with the designs of Renishaw's next product. The company salesman role is usually left to Taylor (who does the job with gusto).

McMurtry was born in the Republic of Ireland but came to the UK at the age of 18, as an apprentice engineer at Rolls-Royce. By the age of 36 he was chief design engineer and a leading designer on the Concorde project. It was while working on Concorde that McMurtry began to develop the probe.

A Renishaw probe is a thin shaft of steel tipped with a synthetic ruby. The spring-loaded probe makes thousands of tiny movements around an object; every time it touches the object, the shaft tilts slightly, sending an electrical impulse to its computer, backs off, and approaches again at the next co-ordinate. In this way, the computer builds up a precise three-dimensional picture of the object. It sounds simple, as great breakthroughs often do in retrospect. Then state-owned, Rolls-Royce was unwilling to back McMurtry's idea of a separate company to market the probe technology to machine tool-makers and users around the world. However, it agreed to support his efforts by financing international patent protection for the probe, in return for a share of the patent rights.

In 1974, McMurtry's colleague, John Deer, left Rolls to set up Renishaw. McMurtry continued development work on the probe at Rolls for two more years, only joining Renishaw in 1976 when the company had enough orders to guarantee a future. "At first it grew slowly. It wasn't just a brand new product but a brand new market, and people weren't ready for something so different," McMurtry recalls. Rolls's strategy of comprehensive patent protection proved vital when, in the early '80s, US manufacturer GTE-Valeron brought out a similar product which was in effect a steal from Renishaw's technology.

Renishaw steeled itself for a process dreaded by all British companies: a tortuously long and expensive US lawsuit. Renishaw's US lawyers warned McMurtry to expect legal costs of $150,000. The lawyers were wrong, of course. The actual cost came in at over $1 million. But finally after five years' legal battle, Renishaw won a decision including compensation. The company won't disclose but is rumoured to be in excess of £5 million, and a blanket prohibition on GTE-Valeron producing or even servicing existing models of its copy-cat product.

"We were very lucky that our lawyers were wrong, because if they'd told us back then the legal costs would be $1 million, we'd never have fought the case," comments Ben Taylor. If growth was slow in the early years, in the 1980s it took off with a vengeance. In 1983, the year Renishaw went public, turnover was £6.5 million and pre-tax profit £1.7 million. Last year, in the depths of world recession, Renishaw earned £11.1 million on turnover of £45.7 million.

While the current deep recession in capital expenditure has hit growth, constant innovation and development in Renishaw's product range has enabled the company to continue growing faster than the market. "We listen to what customers ask for, but then we decide what we think they need, and we go ahead and design that," says Taylor. The current state-of-the-art probe boasts a motorised head with 720 attitudes, offers a wide variety of sizes, and includes an autochange unit which can be programmed to select and load any one of eight different probes. There is also a probe which uses laser instead of the standard ruby-tipped steel for soft objects such as clay models.

Accurate machining is vital for the quality, reliability, and durability of everything from car engines to wristwatch gears. Before the Renishaw probe, maintaining accuracy in machining was difficult and time-consuming. Equipped with a Renishaw probe, a machine tool can check the accuracy of its own work. The current worldwide emphasis on quality in manufacture is a boon to Renishaw. A recent issue of the US magazine Business Week was devoted entirely to "The Quality Imperative" in American industry. (Like one of those Marilyn Monroe movies in which the breathless girls all want to marry a millionaire, Business Week's tale was full of manufacturers who knew exactly what their objective would look like, but were a bit vague on how to reach it.)

"By selling an increasing percentage of their products to end-users (as opposed to machine tool makers), they've bucked the recessionary trend," says Ralph Singleton, an analyst with Bristol-based brokers Rowan Dartington. Singleton forecasts that when the good times return, Renishaw will deliver profits of £16 million or better.

Although brokers give Renishaw fairly stunning market share figures like 60% for metrology devices on machine tools and 90% for co-ordinate measuring machines (CMMs), the majority of machine tools now in use are still not fitted with any metrology devices. McMurtry sees substantial growth potential.

Five years ago, McMurtry lured physicist David Pitt away from STC's research labs to set up and run a new division, Renishaw Transducer Systems Ltd. Under Pitt's aggressive leadership, this division seems to be as much of a creative hothouse as McMurtry's metrology division and has developed a portable machine for checking the accuracy of a machine tool, called a laser interferometer. The most popular laser-based machine for checking and calibrating machine tools was made by Hewlett-Packard. The Renishaw interferometer is half the size, half the weight, and takes half as long to set up. And, it has seized half the market from HP in just three years on the market. "Our big breakthrough last year was very good sales into Japan," says Pitt. Like McMurtry, Pitt sidesteps questions about market share or profit margins. "It suits us to have somebody else in the marketplace. If you ended up with a semi-monopolistic situation that would be bad for the industry, bad for the products, and bad for us."

In its small niche, the interferometer is very profitable, simply because it offers so much to the user. It enables a service engineer to service three or four machine tools in a morning, throw the machine in the boot of his car, and move on to another site in the afternoon. Other interferometers often require half a day's set-up time alone.

Another one of Pitt's product launches last year was an even quicker and simpler device for machine tool calibration called a ball bar. Recession notwithstanding, it sold out its initial production run in three months. "Our products cover the whole range from high-cost lasers to lower-cost products that still fulfil all the requirements of the machine tool user," says Pitt.

Renishaw is based in a restored woollen mill in idyllic Wotton-under-Edge, 30 miles north of Bristol. Founded in 1810, New Mills prospered supplying both sides in the Napoleonic wars before settling down to a century of gentle industrial decline. It was near to closing in 1981 when McMurtry acquired it. After a couple million pounds renovation and landscaping, New Mills today houses some of the world's most sophisticated engineers and metrologists, tapping away at quietly humming computers with 15 acres of pastoral beauty visible through the windows.

Last October, Renishaw opened a new £2.3 million-building, the Technology Centre, adjacent to the old mill, to house its growing manufacturing and research operations. Chairing a Department of Trade and Industry committee for industry/university collaboration, Pitt is a keen advocate of drawing the two sides closer together. Renishaw Transducer currently has projects under way at five universities across the UK. While he believes enormous progress has been made, he says universities still need to go further in broadening their culture to advocate the importance - and the challenge - of practical applications, making students more product-and goal-oriented. "Universities often think they're at the forefront of their field, but original ideas often come from industry first, and go into academe for collaboration. But they may expand the project; the push comes from us."

McMurtry's philosophy has been to grow slowly, by keeping in close touch with his clients, investing in new products to meet perceived needs, and the marketing the products. Growth has usually been financed out of past profits, not borrowings. "I don't sleep well when I'm in debt," he explains. With management owning about 52% of the company (McMurtry alone owns 37% of Renishaw, for a market value of £50 million), Renishaw has not traditionally taken a great interest in the City. The promotion of the exuberant Ben Taylor to joint MD two years ago has improved City relations. "They've done much better in keeping the City up-to-date, and that's shown in the share price," comments Dartington's Singleton. While the City may have woken up to Renishaw, the rest of the great British public seems little aware that nestled in Gloucestershire lies a world-leading company that the Japanese regard as better than their own.

Renishaw has won a list of awards as long as a robot's arm (two Queen's Awards for Technology, four for Export, the McRobert Award, and an American SME, to name a few), but general recognition is still pretty thin on the ground - partly no doubt because McMurtry doesn't pursue it. At last year's ND Marketing Dinner in Tokyo, 400 Japanese businessmen packed the room to hear McMurtry's acceptance speech. In McMurtry's office, the 18-inch high bronze award stands on a side table, flanked by photos of Japanese industrial leaders shaking hands with McMurtry and his colleagues. There are no photos of a British dignitary. Asked if he received congratulations for winning the award from a British industry minister, the modest McMurtry seems genuinely puzzled by the question, before replying: "No. We did get a nice letter when we won the Queen's Award for Technology. But that came out of a computer."

Despite the progress of the 1980s, the importance of industry is still under-rated and poorly understood by the public and their representatives. We'll know that Britain has a culture suited to mass prosperity when David McMurtry is as famous in Britain as he is in Japan.

Jeff Ferry is a business writer and television producer.

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