Annual Manufacturing Report 2020

The Manufacturer’s Annual Manufacturing Report is the barometer for the UK manufacturing industry. Are manufacturers truly adopting a service-orientated business model?

#AMR2020

94%

of manufacturers are adjusting their business in new ways to achieve growth
57%

believe their attitude to growth is unaffected by political and economic uncertainty
84%

see climate change and a carbon neutral future as an opportunity to transform

The findings...

Manufacturing plays an important part of the UK economy, with the industry making up 11% of GVA, 44% of total UK exports, 70% of business R&D, and directly employing 2.6 million people*.

Our Business Transformation chapter within The Manufacturer’s Annual Manufacturing Report 2020, surveyed UK manufacturers to better understand the issues and wants of the sector during a challenging time politically and economically.

The chapter emphasises a major shift in an organisation’s capabilities and identity so that it can deliver valuable results, relevant to its purpose, that it couldn’t master before.

Business transformation inevitably involves a change at every level of a business, from organisational culture, to technology, product range and delivery. The opportunity is huge but for manufacturers to capitalise and reap the benefits they must be ready to embrace it and continue to scan the horizon for upcoming challenges and opportunities, rather than continuing with business as usual.

You could have the ultimate smart factory with all the right talent but if you don’t have the product and business model that your customers desire, then failure may still come. We have seen that companies in the manufacturing industry are shifting towards a more service-orientated business model.

Read our latest blog on ‘What Business Transformation Really Means’.

Download the report The Manufacturer’s Annual Manufacturing Report 2020

Key themes emerging

Transformation

Manufacturers face a time of inevitable change at every level of their business to ensure they achieve growth. Business transformation is too large an issue to address through a short series of survey questions. But we can get a picture of how ready UK manufacturers are to embrace it by gauging their agility in responding to some of the many and varied challenges and opportunities that exist in today’s unpredictable world.

When manufacturers were asked if they continually scan the horizon for upcoming challenges and opportunities or if they are hunkered down and content with business as usual, the response and mindset was incredibly positive, with 94% adhering to this and only a small handful of respondents demonstrating significant caution.

Economy

Despite the current political uncertainty and economic climate, the response to the survey question around attitudes towards growth was surprisingly a convincing one.

As horse-trading over a new relationship with the EU begins and a newly ‘independent’ UK seeks new trading relationships around the world, clearly there is a significant degree of frustration and ambivalence about the way political uncertainty, in the main driven by Brexit, has impacted the sector.

The growth that really counts comes from exports, and the government understands that, with its drive to counter the loss of access of the EU single market with a campaign to encourage more manufacturers to export across the globe. Are manufacturers up for the challenge?

Environment

Another challenge facing the sector is climate change, and how manufacturers should regard the inevitable changes to processes and materials that this will demand of their businesses. In terms of business transformation, this could easily become a long-term issue whose importance will ultimately have significantly more impact than Brexit or fractured politics.

The Manufacturer’s own research already suggests that consumer demands for products that reflect their deepening concerns around climate change might well have profound implications in the coming years and decades.

This, alongside the drive for carbon neutrality, are seen as really strong drivers of growth. Manufacturers relish in the opportunities presented by the need to develop more sustainable manufacturing processes. Knowing UK manufacturers as we do, we expect nothing less.