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Digitisation of UK Manufacturing

Has there ever been a more important time for UK Manufacturing to step in to the spotlight? As Brexit looms (sorry, but it’s relevant), trade deals are struck (we hope), and our world leading Finance industry takes the inevitable hit, the country is going to slip in to recession. Don’t worry - I’m sure it’ll be one step backwards and three forwards – he says crossing his fingers. Whatever your thoughts on Brexit, the die has been cast and we now need a robust plan. 

Robots

When the storm arrives, UK Manufacturing could be our ‘get out of jail card’. Frankly it hasn’t had the recognition it deserves; it certainly has a bad rep amongst millennials who would rather invest their early 20s in digital marketing companies and app based agencies than get dirty in our factories. Massive generalisation, but you get the point.

Despite a slight tempering in 2018 vs the rapid expansion in 2017, depending on what sources you read, if the current growth trend continues we could be a top 5 industrial nation by 2021. I published an article in October 2017 advising caution to the UK Manufacturing Industry -  it is essential that the growth is sustainable, otherwise it will not last.

The key issue I am keen to explore is the binary situation the growth potentially creates. To grow sustainably, we have to continue to invest in the latest digital technologies. Nothing new here. But there is a growing movement which highlights how damaging this could be to the employment market, and hence society.

To compete on the world stage, our Government and the industry leaders must continue to invest in industry 4i. In the last 12 months the Engineering & Physical Sciences Research Council (EPSRC), has awarded £11.4m to seven projects which focus on the creation of innovative digital tools and practices that help facilitate the translation of digital functionality into the Manufacturing sector. Could this leave people surplus to requirement once the transition is complete?

 

Arguments pro

The significant economic benefits are undeniable. Within the Made Smarter review it was estimated Industry 4i could generate over £450bn to UK Manufacturing sector over the next 8-10 years.

Industry leaders certainly want to automate. Interim Partners attended the Manufacturing Expo in Liverpool last November. The key focus was around automation, digitalisation and 4i. In the build up to the Expo there was an excellent interview in the Manufacturer.com with Juergen Maier – CEO, Siemens UK. He identifies the efficiency challenges within the UK and points out in very clear terms the need to invest in the digital technologies available. Although the interview does paint a positive picture of our UK Manufacturing Industry, Juergen warn of a ‘burning platform’ if we don’t get this right.

To give credit where credit is due, the UK is one of the largest Manufacturers in Europe and currently the 8th largest in the world. For a nation of our size and population we punch well above our weight. But, the cold hard facts remain. When it comes to technical investment in the sector, we are behind nations like Germany, the USA, South Korea, Japan & China. Climbing up from 8th to 5th will not be a gap easily closed; it could even widen unless we address operational inefficiencies.

In the last twelve months I have visited many factories so advanced you would think you were turning up for surgery! However, there are still so many examples where the sites are somewhat Dickensian – they simply can’t handle the demand they were servicing 3-5 years ago, let alone the surge they would have experienced since June 2016.

In the current political and economic climate, investment & automation are essential. Pick your reason as to why. It’s ecologically sustainable. It allows for increased efficiencies. It allows for growth. The UK economy cannot rely on Finance alone… Yes, the naysayers will scream that jobs will be put at risk, but remember the Bradford riots when the Spinning Jenny was invented. If the UK Manufacturing sector expands through sound technical investment, surely more jobs will be created than are lost?

 

Arguments against

In Yoval Noah Harai’s Homo Deus he proposes that as the world becomes more and more automated, we will rely far less on human labour, up to 80% of current jobs could be replaced by machines. There will be new positions created that didn’t exist before but will this replace all 80% of the positions that are rendered redundant? Doubtful.

In a recent article by Tom Pickering, CEO & Founder of Ice-Breaker, he discusses exactly this [insert link]. Tom explores the difference between Industry 4i in 2018, and the Industrial Revolution in 1800. As with a growing number of academics & politicians, Tom points out many growing concerns. Although new positions will be created, people will struggle to retrain fast enough.

Amongst many of the anticipated issues is significant social disruption. If up to 80% of current positions are displaced, people will potentially need to enter in to lifelong learning to remain useful. If they’re not useful, and even if the state can provide essential support because our economy is performing well, can you imagine the lack of fulfilment or sense of purpose from not working? I know we’d all like a little more spare time, but surely when all is said and done, working is better than the alternative?

 

So, what should we do?

Our economy needs UK Manufacturing to thrive. To do this, we must continue to invest. Relevant and effective investment means automation. This is the only way to remain competitive on a global stage. This may also help mitigate against short & medium term economic challenges. But, in doing so we could create a huge raft of vulnerable people whose skills are no longer required. Is this potentially the greatest example of irony in the history of our country (or indeed globally)? To grow, we must invest in technology that could eventually lead to mass unemployment, social disruption and a greater divide.

One fantastic speaker at last year’s Manufacturing Expo Simon Bradley of Airbus, summarised the situation very well. He likened investing in automation & digitalisation in the UK Manufacturing sector to teenage sex.

‘Everybody is talking about it, everybody thinks everybody else is doing it, everybody wants to do it but they’re not sure how….’.

Much like Brexit, the digital horse has already bolted. Let’s just hope the benefits outweigh the negatives.

I’d love to hear your thoughts on this - please free to free to comment below. 

Laurence Frantzis is the Director of Manufacturing at Interim Partners

Comments

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Ian Croston

17 Sep 2018 15:53 PM

Hello Laurence
Great article
Articulating your vision towards a digital future and being able to break that journey into smaller manageable steps is key to delivering a digital experience in the B2B landscape.

There is a lot of discussion in relation to 'digital transformation'. It has many different aspects depending on your perspective. In the B2B landscape it can mean how do I seamlessly order a part? How is it sourced efficiently? How do I see the status of the part? When will it be shipped? When will I receive it ? etc. Ideally accomplished with little or no human interaction, the information available real-time & 24/7 via a portal, smartphone or through your own ERP system seamlessly connected to your supplier. Retailers have led the way in the B2C domain and this has been exemplified by Amazon....hence we all want 'the Amazon experience' in our business life. Getting there however can be a real challenge with many companies IT infrastructure and their lack of maturity in defining master data (that data which defines a product from sourcing to manufacturing and customer preference etc).

So how should you address this? My advice is to think big. Have your vision of 'utopia' articulating how your customers will interact with you in the future and how your offering will exceed their expectations. Also, plan your path to your vision in baby steps. Make those steps realistic, make them stepping stones and above all ensure they can be executed and supported by your companies leadership.

The points I raise are critical to any British business hoping to meet the demands of the future.
Ian


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