Here is my introductory message from the breakout session on GB manufacturing at Brussels Briefing Live 2012:
The second part of the title for this session is “Can the EU help to revive UK manufacturing?” ‘Revive’ as a word normally implies that the subject is dead or dying. I would suggest that UK manufacturing is neither dead nor dying.
UK manufacturing has a large worldwide market share and an excellent reputation in many areas, aerospace being a prime example. British manufacturing output peaked in 2007 as such peaked with UK GDP. Jobs have fallen but productivity per employee has more than compensated for this with productivity improvements far in excess of the finance and business services industries.
I would hazard that the use of terminology such as ‘revive’ have a detrimental effect on the perception of UK manufacturing to the point potentially of causing a loss in new & existing business from within and outside the UK. Our use of such terms needs to cease and in fact ways to refresh the image of UK manufacturing ought to be discussed and implemented.
In my experience, which is limited to manufacturers who make products and components for other companies rather than companies who manufacture their own product in house, the fundamental problems with UK manufacturers are lack of: risk taking; diversification and good customer relationship management. Poor CRM (in some cases) is the fundamental reason, again in my experience, that potential business is loss to China in large volumes. Interestingly, cost is often not the primary reason for this loss at all.
The other fundamental issue is the lack of cost effective product assembly in the UK. My research into this over two years has revealed precisely one company in the UK who are prepared to bring in component parts from various manufacturers and then assemble a product. Incidentally, this firm has grown from 2 to 11 employees through the recession years and has had to triple the square footage of their facility. The owner states that providing excellent customer service through offering a complete design to market approach up to and including picking and packing of products is the key driver of his success despite the economic climate.
UK manufacturing has a limited window of opportunity. The perceived lack of IP protection, and lack of quality of manufacturing in the Far East still leads people to manufacture in the UK despite the issues highlighted. The Chinese government is already addressing this as they are more than aware that they have to in order to win further business from the major economies. If the UK can seize this opportunity to invest predominantly, effort into helping, particular small manufacturers, to revise their business practices then I believe we can create a sustainable, thriving sector that will be perfectly positioned to thrive.
The EU can help by encouraging and supporting business owners in this sector to adapt, change and crucially hugely improve their attitude to their clients. By its very nature, the industry requires substantial investment to remain competitive and again the EU could help in this area but only if access to finance or grants is obvious, simple and crucial time efficient for business owners. However, I believe that support to improve business practise is the far more important issue to address.
This speech was given at Brussels Briefing Live 2012 by Phil Staunton of D2M Innovation | Patent, Prototype and Launch an Idea
The Idea Launchpad 