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R&D Case Study: Spencer Manufacturing

Spencer Manufacturing is a family run business whose range of services and clients have grown significantly over its 60 years of trading. As well as being a leading UK manufacturer of wire mesh products, the company now also provides tube bending, wire forming, mesh and spot welding, pressed parts and fabricated assembly services from its 2.5 acre site in Ludlow, Shropshire.

The company is committed to the highest standards of quality assurance and maintains market leadership through the incorporation of new and emerging technologies such as 3D CAD modelling. Spencer Manufacturing further extends its technical ability through voluntary joint venture think-tank collaborations.

R&D Qualifying Activity

Spencer Manufacturing is a highly progressive company applying an innovative approach to all areas of the business. This has resulted in a range of qualifying activity being included in its claims for R&D tax relief.

The company prides itself on developing solutions for clients, often where other manufacturers have failed. Overcoming technical uncertainties as part of the tendering process often involves the design and production of prototypes. In some cases, multiple versions are produced before a satisfactory proof of concept is achieved with Spencer Manufacturing undertaking the work at its own risk and expense.

The company also regularly reverse engineers existing products either with the aim of producing them more cost effectively or because the products are no longer produced by the original manufacturer. Again, where the costs of developing solutions are not passed on to the client, it is qualifying activity for the purposes of R&D tax relief.

A typical project which exemplifies Spencer Manufacturing’s approach was the development of cricket helmet face grilles on behalf of a leading sportswear manufacturer. The project presented the company with very significant technical challenges, which several competitors had previously deemed impossible to overcome, including the development of new production methods and the utilisation of advanced materials. Through its own technical expertise and collaboration with specialist subcontractors, Spencer Manufacturing produced a solution which is arguably the most advanced of its kind.

The owners of Spencer Manufacturing apply the same innovation to their own business as they do on behalf of their clients, continually seeking ways to work more efficiently. The pursuit of the ISO 9001:2015 standard has resulted in continual development of the bespoke in-house quality control system increasing understanding of processes, bottlenecks, reasons for downtime and the identification of true profit and loss centres.

Productivity has also been improved through the adoption of automated production methods, such as robotic cell welding, and the company is looking ahead to increase capacity and accelerate growth through the ergonomic redesign of its factory layout.

What this Case Study demonstrates

Work undertaken to develop bespoke solutions for clients is often seen by owners as just a necessary part of the sales and tendering process and may be overlooked as R&D activity. As long as the costs are not passed on to the client, prototyping will almost certainly qualify for R&D tax relief and enable companies to recoup a significant amount of the costs associated with this business development activity.

To find out how Haines Watts could support your business call 01432 273189 or contact us hereford@hwca.com

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