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The United Kingdom's manufacturing sector has undergone a profound transformation, driven by rapid technological advancements and global economic shifts.
To explore the challenges and opportunities within this evolving landscape, Myerson Solicitors have engaged Geoff Crossley, Senior Manufacturing Advisor of GM Business Growth Hub in a comprehensive Q&A session.
This discussion provides crucial insights into the sector's current state and strategies for future growth.
We examine the impact of technology, sustainability imperatives, supply chain complexities, global competitiveness, talent acquisition, risk mitigation, and the transformative potential of Artificial Intelligence.
Additionally, we highlight the support and resources offered by GM Business Growth Hub to manufacturers in the North West.
1. How have advancements in technology impacted the manufacturing industry in the UK, and what trends do you see emerging in the next few years?
The advent of technology has brought about both positive and negative impacts on manufacturers, particularly small and medium-sized enterprises (SMEs).
Among the positive impacts are improved connectivity, better data capture and manipulation, enhanced productivity, better record-keeping, tighter cost control, less wastage, and continual precise repeatability.
Conversely, technology has instilled a sense of fear in SMEs with a high age demographic.
Some business leaders may lack a comprehensive understanding of the technology and fear losing their jobs, so they might be reluctant to adopt it.
Adopting new technology will undoubtedly change the traditional way of working, which may result in a loss of skills in the manufacturing industry.
New talent, mainly apprentices and graduates, are not interested in joining the manufacturing sector as it is considered a challenging work environment devoid of glamour, unlike the IT, finance, and commercial sectors. This means 'tech native' employees aren't entering the workforce in the same way they do in other industries.
To embrace technology and unlock the benefits, it is imperative for SMEs to address the challenges that come with it. This requires a proactive and comprehensive approach that involves training, upskilling, and encouraging a culture of innovation to foster a competitive edge in the business environment.
2. What steps can manufacturers take to reduce their environmental impact and move towards a more sustainable future?
Manufacturers can approach sustainability as a resource efficiency question.
Previously, energy efficiency may not have been a priority due to low costs. However, with the rise in energy prices, investing in resource efficiency has become very cost-effective.
There are three recommendations that almost every factory needs to address:
- Replace your lighting with LED (they are significantly cheaper to run and give a better quality of light)
- Listen for compressed air leaks in your production area during breaks. They represent wasted money. For a second level of saving, look into purchasing a variable drive compressor that only produces what you need.
- Understand your factory's energy consumption by undertaking an audit for energy usage. GC can loan businesses meters to check specific machine consumptions.
These actions offer free money for your business and have an immediate positive impact on the environment. They are also the first steps towards building a sustainable business.
Seek assistance in mitigating the manufacturing risks highlighted above and embark on your journey to Net Zero. The GM Business Growth Hub stands ready to help.
3. What challenges do UK manufacturers face in terms of supply chain management, and how can they overcome these challenges?
Supply chain management has been challenging over the past few years, with disruptions caused by COVID-19, the Suez Canal blockage, and recent conflicts in Ukraine and Israel.
To address these issues, management has adopted tactical procurement strategies, such as holding higher inventories and sourcing products closer to home. These strategies may be more expensive but ultimately result in a more sustainable and predictable supply chain.
To manage the supply chain in such a complex environment, it's crucial to understand every step of the supply chain and identify potential bottlenecks by using techniques such as the '5 whys.'
Carbon reduction is also a growing concern, making local supply chains more favourable.
Companies must adapt by promoting sustainable solutions, becoming more agile, and proactive in supply chain management.
4. What strategies do successful UK manufacturers employ to remain competitive in a global marketplace?
British manufacturing has struggled due to the lack of a long-term industrial strategy, leading manufacturers to adopt a risk-averse approach and perceive the UK as too expensive to manufacture.
Some companies excel by specialising in areas where others can't match their level of detail, excellence, and creativity. This requires investment, often by reinvesting profits to safeguard future prospects or by acquiring overseas companies to establish a presence in key markets.
Automating and digitising processes leads to better product quality and flexible production capabilities.
Continuous improvement through reinvestment keeps the company innovative and often acknowledged as a market leader.
British companies often underestimate the value of their goods in international markets. However, British products are still highly regarded overseas. Those who succeed in overseas markets prioritise client relationships and continuously innovate to set the pace within the sector.
To achieve the status mentioned above, continuous reinvestment is necessary, and a national long-term industrial strategy would aid in creating conditions for more companies to follow suit.
5. How can UK manufacturers attract and retain skilled workers in an increasingly competitive market?
UK manufacturers are struggling with a shortage of skilled workers due to the COVID-19 pandemic, Brexit, an ageing workforce, and negative industry perceptions.
To attract and retain skilled workers, outreach programs highlighting the diverse and rewarding career paths available to students can help change negative perceptions of manufacturing among high school teachers.
The manufacturing industry offers great high-skill, high-pay, and high-tech job opportunities for students.
It generates more GVA for the UK than other sectors. Initiatives like National Manufacturing Day help create a talent pipeline by inviting schools and colleges to visit factories.
Atec Engineering Solutions showcased this by offering a tour of their facility in Salford with live equipment demonstrations as part of their Social Value agenda.
UK manufacturers should engage with their local community and stakeholders through events, sponsorships, awards, campaigns, and social media. This will create a positive perception of the industry and help attract skilled workers to address the shortage in the sector.
6. What are the biggest risks facing UK manufacturers today, and how can they mitigate these risks?
Manufacturing companies are expected to face a range of risks and challenges in 2023 and 2024. Among these, the skills shortage is a top concern.
To address this issue, UK-based manufacturers are advised to adhere to a "rule of three", which means that all employees should be capable of performing at least three tasks, and at least three individuals should be able to complete each task.
It is also advisable for companies to plan ahead based on the age demographic of their workforce rather than waiting for retirement to occur before filling a skills gap.
Inflation and margin pressure pose another significant challenge for manufacturers. Companies may implement Lean Processes to address these concerns by increasing productivity and reducing cycle times.
Additionally, thoughtful material selection and design for cost or design for manufacture can help reduce unit costs and maintain margins.
An increasing number of leading manufacturing companies are adopting a design-to-cost (DTC) methodology to address costs throughout the new product development process. Design for manufacture can also help to mitigate rising costs and material scarcity.
Supply Chain Disruption remains a persistent real-world issue that manufacturers may confront. It was initially observed during the COVID-19 pandemic and has since persisted due to global conflicts, natural disasters and unforeseen incidents. These restrictions are expected to remain in place through 2024, with alternative routes being significantly more expensive.
To mitigate these risks, manufacturers should consider reshoring or sourcing more regionally to replace lengthy supply chains where it makes economic sense and reduces business risks.
7. How do you think AI will change and influence the industry in the future, and what threats and advantages do you think it will bring?
AI is set to transform manufacturing, boosting productivity, reducing expenses, improving quality, and minimising downtime.
Small and medium-sized businesses should consider adopting affordable AI solutions.
AI is widely used in manufacturing for defect detection, predictive maintenance, demand forecasting, waste reduction, quality control, process optimisation, and performance enhancement.
AI's image and video recognition capabilities enable advanced simulation and complex data analysis. In addition, AI can optimise supply chains, monitor suppliers, and prevent disruptions.
Smart manufacturing practices like real-time vision, hands-free systems, resource tracking, autonomous vehicles, optimised deliveries, and industrial robots can be used with sensors and cloud-connected factories.
Moreover, AI can perform Intelligent IT Operations that involve data management, analysis, performance analysis, and root cause analysis.
Generative AI can create design iterations, while augmented or virtual reality can help producers test models. High-resolution cameras identify flaws, reducing waste.
The benefits of AI in manufacturing include increasing efficiency, enhancing product quality, predictive maintenance, customised manufacturing, streamlined supply chains, better inventory management, and reduced transport costs.
However, AI implementation and management require a careful approach due to potential threats, including job displacement, high upfront investment, security concerns, and overreliance.
To conclude, AI is poised to play a pivotal role in the future of manufacturing, but its success depends on its careful implementation and management.
8. What help can GM Business Growth Hub provide to manufacturers in the North West, and what resources are available to them?
GM Business Growth Hubs' Manufacturing team is comprised of six seasoned advisors, each with extensive knowledge of GM Manufacturers.
They dedicate their days to working closely with manufacturers to enhance their businesses, leveraging their expertise and experience to drive tangible results.
The most exciting part is that this service is fully funded, meaning the customer incurs no costs.
If you require Manufacturing Support, please do not hesitate to contact us today through the inquiry form available at https://www.businessgrowthhub.com/manufacturing/manufacturing-service-enquiry.
9. Do you have any other recommendations for manufacturers to help with their business?
Manufacturing is ultimately a game of standards. Standard Operating Procedures (SOP) generate repeatability and uniformity, which are the foundation of any improvement work and necessary for maintaining good productivity, quality and happy customers.
When standards slip in manufacturing, repeatability is lost, and things begin to unravel very quickly. It's always the responsibility of manufacturing leaders to set the standard.
An organisation that celebrates firefighting will seek a temporary workaround to lesser problems like a missing spanner. For example, it might be to use an adjustable spanner, so if one size goes walkabout, it won't be missed.
Learning organisations are different. A learning organisation does not firefight or accept workarounds. They take the time to truly understand a problem, learn from it and eliminate it forever.
Manufacturing leaders adopting the learner culture should regularly walk around the factory premises, talk to employees, and avoid making hasty conclusions. They should consult with management for their insights and work together to make incremental improvements without extreme alterations.