Building agility in Manufacturing

2020 was a year that even Nostradamus would have struggled to predict accurately as Brexit unfolded and a global pandemic emerged. With a new trading relationship now agreed between the UK and the EU, and the COVID-19 vaccination programme underway, we hope to see some level of optimism and positivity return in 2021.

We’ve seen manufacturers adapt their production processes, increase their investment in digital and green technologies, as well as embrace new ways of working, with around 47% of people already doing some form of home working. Although this year will bring with it new challenges, businesses must recognise that supporting their people and customers, and innovating to remain competitive - all while improving agility in an environment where shocks are increasing in frequency - will be imperative to remain competitive and build market share.

As the UK manufacturing industry seeks to redefine its role in the world, one priority should be increasing international trade and investment in innovative growth sectors, such as clean tech, electric vehicle technology, artificial intelligence, advanced robotics and space. The UK can - and must - build on its strengths to become a world leader in these manufacturing and product technologies of the future.

“The EU trade deal, taken alongside the positive progress with both COVID-19 vaccines, will give business leaders the confidence to start planning for the future with greater clarity.

While the need to protect supply chains and boost export products has hit the headlines, the services and maintenance trade that supports this has barely been touched upon. With as many as four in five UK firms either developing or already delivering an enhanced service offering to their clients, it’s crucial businesses are able to swiftly respond to our new relationship with the EU, especially relating to people movement, if they are to remain competitive in an increasingly customer focused global stage.”

Cara Haffey Manufacturing and Automotive Leader, PwC UK

The Make UK survey findings back this up in the report with four in ten manufacturers focusing on new product development in 2021, and many others looking beyond current offerings to explore new markets and adopting technology to boost efficiency and drive productivity. It’s imperative that organisations work with agility, support their people and customers, and continue to innovate to remain competitive and build market share; creating results that make a difference.

“While by mid-2021 it is hoped the immediate effects of the pandemic will be waning, a renewed, unemployment driven, economic crisis may strike just as the economy endeavours to restart.”

Office for Budget Responsibility (OBR)

The next steps for manufacturing: survival of the agile

Building a strong industrial base in the UK
Developing an agile and responsive sector
Risks that lie ahead in 2021

Building a strong industrial base in the UK

For manufacturing, the start of the decade promised much by way of increased investment in capital, improving skills, going digital, going green and taking advantage of an 11-month-long transition period as the UK negotiated its new relationship with the European Union (EU).

The survey reports that just under half (48%) expect conditions within their industry to either moderately or significantly improve.

Manufacturers have seen increases in productivity and expect this to continue in 2021. They also expect to see positive movement in the recruitment of people into the industry too.

Developing an agile and responsive sector

An agile manufacturing sector is one that is able to swiftly respond to shocks that interrupt the natural order of a commercial system. These can be global shocks, such as the pandemic or the financial crisis over a decade ago, or smaller, more specific shocks such as erupting volcanoes in Iceland that disrupted air freight capacity and logistics.

Regardless, manufacturers are more aware of these challenges today than they were one year ago and as such have opened the door to investing in people, innovating new products, expanding into new markets all the while prioritising resilience in the industry to build agility.

Risks that lie ahead in 2021

The top five biggest risks identified by manufacturers to 2021 business planning included delays at customs, national or local lockdowns, increased cost of meeting EU regulation, significant upward pressure on input costs and political instability.

It is also vital that we learn lessons from the national and local lockdowns to protect the public, businesses and local communities. Businesses need as much certainty and stability as possible during these challenging times. Moreover, they need consistency of support. The current piecemeal and ever-changing models do not provide firms sufficient time to plan and prepare.