What’s impacting manufacturing?
The future of manufacturing industries globally is bright. According to IIoT World, 27% of worldwide manufacturers estimate at least a 10% YOY increase in revenues until 2024. This growth doesn’t come without challenges, such as trade barriers, political instability and keeping pace with technological advances, whilst remaining sustainable.
New UK export strategy announced
This week has seen the government launch a new 12 point strategy to help UK businesses boost exports to £1 trillion annually. Whilst current projections suggest this target would be reached by the mid-2030s, it is hoped that progress towards this goal can be accelerated through a business-led approach supported by government investment.
The plan, entitled “Made in the UK, Sold to the World” includes the launch of new support services, financial assistance, training resources and a new UK tradeshow programme.
As advisors in the manufacturing space, we know that technology, skills and exposure to the right markets are all critical to the success of our clients, especially when it comes to competing on the international stage. It’s encouraging to see proposed investment across these key areas to help UK manufacturers reach their full exporting potential.
Useful resources for Manufacturers
Adapting manufacturing for the ‘new normal’ – Re-watch Menzies Webinar
The UK itself is currently the 9th industrial nation in the world, accounting for 45% of the country’s exports and 69% of its R&D activity. Despite global economic uncertainty, UK manufacturers remain resilient and resourceful. Investment in automation and technology, combined with a focus on high-value manufacturing, is high on the agenda. The Government’s Industrial Strategy has identified some key areas of opportunity for innovative manufacturers which promotes significant growth potential. As the need to be sustainable is becoming essential rather than desirable, more manufacturers are stepping up to meet the environmental concerns – and making cost savings in the process.
Supporting the Manufacturing sector
We advise a diverse range of manufacturers, as well as a number of sector-dependent clients. We work closely to find solutions to industry issues, utilising our expertise in everything from business strategy and corporate finance, to audit and tax advice.
How tough could Brexit make things for manufacturers?
Caroline Milton – Manufacturing sector expert
With Brexit approaching, it is more important than ever that manufacturers plan ahead. Understanding how individual risk factors might affect their business model is critical and the degree of risk exposure will vary from business to business. Business leaders must take ownership of the situation and prepare a bespoke Brexit plan to support them through the changes that lie ahead.
Key challenges for the manufacturing industry
People and Skills
An estimated 186,000 new UK-based engineers are required each year until 2024 and currently this target is not within reach. Manufacturers should review their future talent requirements and incentivise existing staff to encourage retention. Maintaining and increasing investment in training at all skill levels is key. Manufacturers investing in new systems and equipment are also much more likely to invest in the personal development of their people. Funding is now available as part of the Government’s Industrial Strategy to support Knowledge Transfer Partnerships and strengthen leadership skills.
The UK is one of the world’s top five most innovative economies, according to the Global Innovation Index. To innovate effectively, manufacturers face challenges in balancing competing demands of winning new contracts, delivering projects and helping customers. Manufacturers are leading the way with investment in R&D and opportunities exist to utilise tax incentives, such as R&D tax relief and the Patent Box regime. Making the most of these reliefs will leave manufacturers with more funds to invest in building a stronger business and recruiting skilled staff.
To strengthen their position as global suppliers, UK manufacturers must continue to invest in boosting their sustainability credentials and drive efficiencies in the process. Growing public awareness of environmental damage requires businesses to adopt a proactive approach and take steps to mitigate their carbon footprint and reduce waste. Britain’s manufacturers are implementing a growing range of sustainability measures and reaping cost-saving benefits. According to Make UK’s Sustainability Report, manufacturers are beginning to look beyond the initial cost-saving benefits and instead focus on the long-term benefits of sustainable approaches within their organisations.
According to the UK’s Office for National Statistics, recent figures suggest that labour productivity declined in the manufacturing sector by 0.9%. Manufacturers must explore ways to close this productivity gap and secure a competitive advantage. Data is now available to identify areas where streamlining the production cycles improves efficiency. Good examples of this are the development of lean manufacturing systems, performance dashboards and predictive maintenance.
Manufacturers need to utilise the latest technology to stay relevant, innovative and competitive. Their biggest challenge is how best to use technology to achieve operational goals such as reducing costs, improving quality, productivity and safety whilst pushing product innovation. Without investment in automation and other digital technologies, they risk losing market share to competitors. Strategic investment in AI and robotics is increasingly crucial to deliver long-term value and business sustainability. Embracing Industry 4.0, particularly the Internet of Things (IoT) and the IIoT (Industrial Internet of Things), opens doors for manufacturers to create a more digital focus, including real time tracking and quality management.
More Manufacturing Brighter Thinking
How we’re helping the Manufacturing sector
Menzies boosts PT Plastics successful growth in the UK market
As a packaging expert with knowledge, technical expertise and production flexibility, PT Plastics contacted Menzies to support them with their growth into the UK Market.
Growing a business through work/life balance
Read how Menzies applied #BrighterThinking to FTI supporting a Manufacturing owner/manager not only restore a work/life balance but grow his business.
Read how Menzies applied #BrighterThinking to a specialist manufacturing business by advising on Group Reconstruction. The result: this new structure allowed the business to ring fence valuable assets without incurring onerous tax charges.