23 May, 2017

UK manufacturing demand levels at all time high but how will organisations cope?

Whilst the sector is still trying to plan for a post-EU marketplace, the announcement of a General Election this year is bringing about more mystery for anyone working in or around the UK Manufacturing Sector.

The current accreditation British manufacturing has received as the driving force of Britain’s future is well deserved, given its outstanding and record-breaking performance in Q1 courtesy of the weak pound. But an unexpected slowdown over recent months amid concerns over funding and further investment in the next government’s budget and the prospective elimination of tariff and non-tariff barriers protected by EU membership is creating some unprecedented concern within the sector.

In spite of this, however, the picture remains a healthy one. 45% of all UK exports were courtesy of the UK Manufacturing Sector and the market outperformed itself by 3.7% YOY. Rob Dobson, Senior Economist at IHS Markit stated that “although only accounting for 10% of the economy, the upturn in the manufacturing sector represents some welcome good news after the sharp slowing in GDP seen in the first quarter.”

With expected growth in UK Manufacturing is estimated at over 16% according to experts, stability and sustainability must be underpinned by a cohesive and considered Brexit trade negotiation in order to continue to support the favourable export terms and free trade deals currently enabled by EU membership. And the current ambiguity around trade relations is neither affirming or condemning; and herein lies the problem.

With such steady growth driven by the falling value of sterling, particularly across the automotive market, which has seen its highest demand in 17 years, and the aerospace market, which has more than doubled its demand of 14 years ago, it will be a test of the industry’s ability to deliver transformation to ensure that key producers are preparing and developing more efficient and agile infrastructures for the increasing demand.

Automation and “Connected Factories” could become a key component in managing this according to Sandvik Coromant, who recently signed a research agreement with a Californian based R&D and Innovation centre to develop their digital manufacturing capabilities.

Another immediate solution is the implementation of experienced transformation consultants. Interim consultants that specialise in helping businesses navigate and deliver new high-efficiency production and capability models will be an integral key to successfully moving into the post-EU market place and Green Park’s Infrastructure and Manufacturing Practice has proven experience helping businesses navigate disruption and change. We specialise in providing pre-referenced and highly skilled executive interim managers, providing a varying range of proven abilities such as transformation of underperforming businesses, effective transition into new markets, successful implementation of new technology for manufacturing and delivery of change projects, all with the highest commercial sensibility and competence.

The UK manufacturing market certainly has some promising but turbulent times ahead but the pathways to success are clear and lie directly between effective preparation and willing transformation.

by Guy Herbertson, Consultant at Green Park

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