UK supply chain keeps Formula One on track; The supply chain – often very small companies working to short lead times – provides teams with specialist manufacturing capability they do not have in-house

March 17, 2014 8:30 pm

UK supply chain keeps Formula One on track

By John Murray Brown

As the chequered flag went down on Australia’s Grand Prix on Sunday, hundreds of small UK engineering companies breathed more easily as this year’s new engine rules failed to produce the multiple breakdowns some had predicted.

Despite one of the biggest technical changes in Formula One racing for 30 years, 14 of the 22 cars completed the circuit at Melbourne’s Albert Park track, in a race won by Nico Rosberg driving a Mercedes.

“This was the first race where I’ve heard people questioning just how many cars would finish,” said Chris Aylett, chief executive of the Motorsport Industry Association, the UK industry body.

The UK supply chain, much of it based in “Motorsport Valley” close to Northamptonshire’s Silverstone racetrack, played its part keeping Formula One on the road this weekend. Eight of the 11 F1 teams are based in the UK, availing of an expert supply chain, comprising more than 5,000 people, that earns £2bn in sales a year.

This season the industry has seen major investment after the Paris-based Fédération Internationale de l’Automobile, the sport’s governing body ruled that cars had to be powered by hybrid engines using fuel and energy recovery systems.

The changes are aimed at containing costs and aligning the sport with the wider automotive industry, which is investing heavily in carbon reducing technologies.

“Some teams have prepared better than others, but until the flag drops you can’t tell what’s going to happen. But most teams would probably have liked another couple of months to get ready,” said Peter Digby, managing director of Xtrac in Berkshire which makes transmission products for six F1 teams.

There are currently three engine suppliers – Mercedes based in Northamptonshire, Renault in France and Ferrari in Italy. Honda is supplying engines from Japan for the McLaren team next season – further evidence of the sport’s alignment with volume carmakers.

The supply chain – often very small companies working to short lead times – provides teams with specialist manufacturing capability they do not have in-house. There is a lot of secrecy, with UK companies asked to make complicated parts though it will be the race teams who fit them.

“To be quite honest we don’t know what our parts are used for half the time,” says Alan Rollason, managing director of ACE, a Shropshire company that makes parts for high performance engines.

Suppliers notice a rush for parts as F1 teams refine their cars before the start of the season. “There were lots of last-minute calls. Teams wanting one of those, or a bit of this,” says Martin Dewey, general manager of DC Electronics which makes electrical harnesses for two of the 11 teams.

For the past few years, the Renault-powered Red Bull team based in Milton Keynes has swept aside the competition.

But Tim Angus of Motorsport Research Associates believes that, on the evidence of Sunday’s race, it is teams with engine suppliers close to where the car is built – notably Mercedes and Ferrari – who seem better-equipped to cope with the changes.

Motor racing, he says, is still an industry where face-to-face contact between engineers is vital. “It’s what we call the tacit knowledge and it’s another reason the UK supply chain will continue to thrive.”


Gearing up for fuel-efficient era

New engine regulations, designed to produce cleaner and more fuel-efficient cars, are the biggest change Formula One has seen in decades, writes John Murray Brown.

The 2.4 litre 8-cylinder gas guzzling engines of old have been replaced by light turbocharged 6-cylinder hybrids of 1.6 litre capacity. Engines have to last longer too, with teams restricted to five engines a season, down from eight last year.

The fuel tank is smaller, with no more than 100 kilogrammes of fuel per race, two-thirds of what was allowed last year. But in addition to conventional combustion engine propulsion, the new power train is supplemented by an increased kinetic energy recovery system – energy and heat harvested from the brakes and the turbocharger, which is stored in cells and used by the driver to provide short bursts of power.

There are also rules on fuel flow – the issue that caught out Red Bull’s Daniel Ricciardo, who was disqualified having come second in Sunday’s Australian Grand Prix.

Time in the wind tunnel is restricted although teams are able to use CFD modelling – computational fluid dynamics – which is a cheaper way to measure a car’s aerodynamic performance.

Until now, F1 teams were restricted from testing during the season. But this year, in recognition of the added challenge integrating the new rules, the organisers have allowed four separate two-day testing sessions during the season.


About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: