A positive
outlook?
2
015 was a turbulent year for the manufacturing sector. Not long ago, EEF, the manufacturers’ association, revised down its 2015 forecast from 0.7 per cent growth to -0.1 per cent shrinkage by the end of the year and noted that output balance was now at its lowest level since Q3 2009. Similarly, commenting on the global manufacturing sector, the J.P.Morgan Global Manufacturing PMI, compiled by Markit, stated that: “the headline PMI remained relatively lacklustre” continuing the “subdued run of data for the global manufacturing sector through 2015.” The recent abolition of the Business Growth Service (BGS), which houses the Manufacturing Advisory Service (MAS), has also been a blow to many who were looking to the Government for support in these troubled times. Further research from EEF shows that there has been a decline in spending on employment and investment, falling by -7 per cent and -3 per cent respectively. So if businesses cannot support themselves and the government won’t either, can any of us help but wonder what the next few years will hold for the 6000 or so British manufacturing businesses? As we continue into the New Year it is important that those working in the manufacturing sector are not disheartened, but continue to develop and innovate in order to combat uncertainty.
10 www.manufacturing-today-europe.com
Technology, skills and servitisation – can these lead to a brighter future for manufacturing?
Let’s talk tech It will come as no surprise that the evolution of technology is a key consideration to any industry, but for manufacturing it is more pressing than ever. The manufacturing industry has generally been seen as slow when it comes to embracing new technology, and with spending on innovation reducing, this could suggest that the amount of money manufacturers are willing to spend on digital will decline as a result. However, in a recent report produced by Salmon, a global digital commerce consultancy, entitled ‘British Business in a Digital Age’, this assumption was disputed. The report claimed that 97 per cent of manufacturers already have an individual or team responsible for their digital commerce channels, with a further 90 per cent using technology to improve their customer service, boosting sales by up to 17 per cent. In terms of future uptake, 45 per cent of manufacturers expect that their digital channels will represent between 10-20 per cent of their revenue in the next five years. This kind of projection would only come about if those at the top had already forecasted for investment into their tech teams, which is promising. Commenting on the report, Martin Girdlestone, Head of Consultancy at Salmon, stated that: “In 2016, manufacturers will gain a greater
understanding of why digital is now such an important part of their business.” Zoe Brimelow, Brand Director of Duo UK, concurs: “Embracing digital and smart connected products is central for manufacturers to become more agile and responsive.” A report published from the Government Office for Science in 2013 stated that the Internet of Things would be key for UK manufacturers over the next few decades “as virtually everything is expected to be connected via central networks and the Internet.” This not only applies to customer service, but it also relates to how software and automation will revolutionise production.
The robot revolution There has been a lot of hype surrounding robotics and automation and, as we move forward, this is showing no signs of abating. Statistics from the Annual Manufacturing Report stated that 83 per cent of companies implemented some form of automation in their production in the past five years and 60 per cent claimed that the effect on working conditions and job satisfaction is one of improvement. Neil Gallant, Managing Director at Neutronic Technologies, had this to say: “In my opinion the future of manufacturing is going to continue moving towards increased use of automation and robotics removing the requirement for human interaction in the manufacturing processes. As