Storms ahead: The challenges for UK manufacturers

UK manufacturers are currently enjoying a strong finish to the year, with output, new orders and employment all looking buoyant. British operators are no slouches and have sought to make good use of their advantages. A positive approach to modern methods, flexibility and a great workforce mean that whatever the weather, UK manufacturers will be open for business.

But none of this should be cause for complacency. Nobody can be certain about what the long term effect of the current  currency situation in terms of improved exports and higher production costs, and there are still huge question marks over the UK’s European single market status. Even Brand Britain, currently a key growth driver, is not guaranteed to come out of the current uncertainty unscathed. Couple this with some hard facts about the future of manufacturing and you start to see how important is for UK enterprises to really put the hammer down in terms of innovation.

What are these hard facts? According to Microsoft’s recent study: The Age of Innocence, Inertia or Innovation’, 43% of UK manufacturers believe that their business model will be dead in the water within five years. That number rises to 66% when you make it ten years. This is a rate of change that has never been seen before, and which is going to hit lagging businesses like a hurricane. Elsewhere in the document we see that of the five major industries surveyed, manufacturing is the least worried about disruption over the next two years. This could be because manufacturers feel that they have prepared themselves appropriately for what’s coming, or it could be foolhardy. The proof of the pudding is in the eating.

Breaking down the data further, we find that manufacturing companies are also the least likely to accept internal disruption in an attempt to ward off external disruption, and also the most likely to answer “don’t know” in response to the question. Again, this could mean that manufacturing CEOs are uniquely well prepared for what’s coming, but then we see that the industry is by far the least likely to have even one senior digital leader in place. At a time in industry when Information Technology is increasingly wedded to Operational Technology, leadership on the digital side is fundamental to understanding the nature of the challenges to come.

The article’s conclusion provides some excellent advice to anybody looking to chart a successful course through the choppy waters to come. The report is free to view, but I have picked out the pieces of advice which are most relevant to manufacturers.

  • Ensure you have some digital leadership in place.
  • Be willing to experiment with how your business operates
  • Make the most of your data and treat it with respect – it is extremely valuable
  • Make the most of the people who already work for you
  • Be creative

We all want to see manufacturing continue to carry the torch for what we are capable of here in the UK. People have been making amazing things here for a very long time, and that won’t change because of a bit of stormy weather. Nevertheless, the challenges are real, and as with all challenges we can meet them head on or suffer the consequences.

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