Welcome to the latest Manufacturing Barometer report revealing the latest performance, views and opinions of manufacturing SME’s across the South West of England.
Around 90 senior decision makers in South West based manufacturing SMEs have once again shared their views on business performance and forecasts for the future.
Note too, this quarter’s special focus looking at SME manufacturers’ plans to address productivity. We asked about their own thoughts on where and how in their business they want to improve productivity and also how they plan to do this – the results may surprise some readers.
The Core Trends
66% of respondents reported an increase in sales in the previous 6 months reflecting a picture of continued growth being achieved in the sector. 61% believe they will grow sales in the next 6 months, showing ongoing confidence in spite of uncertain market conditions.
However, just 43% say they are planning to invest in new equipment, representing a downward trend since climbing to 57% in Q4 of 2016. Further, only 41% are planning to recruit to meet future needs. This raises questions around how businesses will manage growth and has clear implications on the need to increase productivity to meet the predicted increase in sales.
Special Focus: Productivity
This is a pivotal time for the UK to focus on what ‘productivity‘ actually means to manufacturers. It has very much become headline news over the past months with government and industry talking about a need to solve the “Productivity Puzzle”. Last quarter’s Barometer, highlighting business concerns about the impact of Brexit and availability of people, also showed that the importance of efficiency and the ability to be more productive is more crucial than ever.
Thus the latest Barometer explored two important questions: ‘where’ and ‘how’ these improvements in productivity should be made.
When asked where in their business manufacturers would like to make improvements, they are saying reducing the cost of operations, supply chain and back office are distinct priorities.
The surprise for some could be in how manufacturers believe they should improve productivity. Businesses say that they intend to prioritise making their existing people and processes more productive ahead of investing in new production facilities or through automation and robotics. This is somewhat out of step with the developing industrial strategy, which sees robotics and automation as much more central to solving the productivity puzzle.
The Autumn 2017 Manufacturing Barometer has left no doubt that manufacturers recognise the need to improve productivity within their businesses and that optimising existing processes and improving existing employee effectiveness is a priority.
SMWAS support the view that the UK will need to invest in automation as part of the strategy to grow productivity and increase manufacturers’ ability to cope with the unavailability of labour. However, it is vitally important that we listen to what manufacturers are actually saying as to where and how they feel they need to improve in order to become more productive. The right information and support must be available to enable them to get the most out of their people and processes. This suggests that government and industry bodies need to facilitate manufacturers to get more out of their existing people and processes and businesses may need to look harder at investing in robotics so they do not fall behind in the medium and long term.
To help manufacturers address these needs, we, at SWMAS, are launching our productivity 2020 campaign. Informed and fuelled by our depth of knowledge and extensive experience in enabling manufacturing companies to increase their efficiency, effectiveness and profitability, the 2020 campaign will support those who engage with it realise their goals through expert productivity workshops, in-business productivity assessments and through hands-on support to drive real improvements. To register your interest and receive more information please email firstname.lastname@example.org.
You can download your copy of the Autumn 2017 South West Barometer report below: