Collaboration is key for manufacturing in the Midlands
Nick Harrison, partner and head of manufacturing at KPMG in the Midlands, says there are grounds for optimism for manufacturers in the Midlands who have a chance to work together to harness new technologies and take skills in the industry to the next level.
Confidence is key to any business and those operating in the manufacturing sector in the Midlands are no different. In general, manufacturers in the region are looking to the future with confidence, some more than others. From engineering to aerospace, food to automotive, there are numerous manufacturing sectors at different levels of maturity, and some are facing disruption from their supply chain and increasing use of technology.
This confidence is backed up in KPMG’s Midlands Manufacturing Outlook report, which we produced over the course of 2018 in conjunction with TheBusinessDesk.com. We wanted to hear from the region’s manufacturers about the issues that matter most to them. One of the headline themes which came out of the report was the fact that Midlands manufacturers are confident; some 55% said they plan to achieve growth by diversifying into new areas of business, while 45% plan to expand into new geographical markets.
To do this, the sector must move with the times and meet challenges around tech and skills head on.
Taking advantage of tech
The Midlands is a leader in manufacturing innovation. However, greater competition for talent could limit manufacturers’ abilities to evolve, grow and adopt new technologies. More apprenticeships are being created, but more still must be done to encourage young people to become engineers. Staff retention is also an increasing challenge, while recruitment of smart and innovative people is vital.
KPMG’s Midlands Manufacturing Outlook report shows that engineering skills are the number one shortage. Some 60% of manufacturers in the Midlands find it difficult to recruit people of the right quality, while 90% believe boosting skills should be a priority for the Government’s Industrial Strategy.
It is also clear that business owners feel there is a lack of clarity when it comes to skills and training – simply because there is so much out there for them to choose from. The Apprenticeship Levy has been misunderstood – often through no fault of business owners – and there remains a pot of around £2bn which has so far gone unclaimed.
The rise of tech applications within manufacturing is throwing up new skills challenges. If business owners are finding it hard to keep on top of their talent right now, who knows what skills challenges there will be in three to five years’ time, and whilst there is a lot of core operational talent in the market, there’s still a lack of people with Lean 6 Sigma experience, for example.
Some organisations in the sector are looking to re-skill their workforce in order to meet the demand for talent, but many simply don’t have the time. If a company that turned over £125m wanted to make the step up to a £250m company, then, because of the skills challenges that exist at present, it probably couldn’t happen without significant investment in training.
Because of this, manufacturers should embrace technology and collaboration and adapt to Industry 4.0. KPMG’s Midlands Manufacturing Outlook report says that over 40% are already investing in digital or IoT (Internet of Things) technologies. Over a fifth are investing in additive manufacturing, whilst over 85% recognise they must embrace digital technologies to be successful over the next ten years.
All too often we hear businesses ask: how do I raise my head above the parapet? We’d advise that collaboration is key when it comes to tapping into tech; this is particularly prevalent in the automotive industry, where collaboration is bringing forward new ways of working, products and strategies for growth.
When we get called into manufacturing businesses, we assess how mature their workforce’s tech skills are. We benchmark their abilities using diagnostics and within a few weeks we’re able to help them with a way forward by building capabilities and adapting to a growth agenda. We’re able to sniff out a problem area and make improvements. What’s more, throughout 2019, we’ll be holding a series of seminars aimed at helping manufacturers meet the challenges of growth, skills and tech head on, to arm them with the advice they need to adapt to changing times in their sector.
Better together
The future of manufacturing looks bright. Collaboration and partnerships are blossoming. Mobility is key and how people and products come together in the future will define the success of the companies operating in the sector. Disruption of the industry will show manufacturers across the Midlands that they have to consider how they align with others in the organisation to take advantage of the opportunities presented by Industry 4.0.
