Supply chain collaboration critical to growth claims manufacturing body
THE Government must speed up plans to introduce a consistent and coherent long-term industrial strategy to ensure that manufacturers’ growth ambitions are fully supported across the pre- and post-Brexit divide.
The call comes from manufacturers’ organisation EEF, which has said that swift implementation is vital if growth ambitions are not to fall by the wayside – particularly while the UK steers its way towards Brexit.
Industry’s call is backed up by a new poll by the EEF showing that 90% of adults believe the UK needs a comprehensive, long-term industrial strategy and 86% want the Government to promote a stronger manufacturing base in Britain.
The report welcomes the fact that a UK-wide industrial strategy is back on the Government’s agenda and that it must clearly set out the Government’s goals for growth, backed by policies which deliver a more skilled workforce; more resilient infrastructure; a lower cost of doing business and better support for growing businesses.
The study – Manufacturing Ambitions: an industrial strategy for a stronger economy – shows that more than three quarters of manufacturers (76%) are going for growth, while 71% have a three to five-year business plan in place to back up their ambitions.
The sector already has a strong track record on productivity and the organisation said there was every indication this was set to continue. Almost two thirds of firms (63%) are focussed on driving up productivity, while margins (71%) and sales (64%) are also key targets in manufacturers’ growth plans.
The research identifies that innovation and the introduction of new business models are coming to the fore as companies pursue growth.
It also concludes that supply chain collaboration is becoming even more critical to growth, with over half of manufacturers (52%) already enhancing cooperation in areas such as production, design and development and a further quarter (26%) planning to do so.
It said the depth of collaboration may be a surprise to those outside of industry, with 67% of manufacturers already working with their supply chain on product design and development.
Other key areas for supply chain co-operation are in customising offers to customers (67%) and forecasting demand (60%). And while manufacturers see a range of activities as having a positive impact on productivity, one in ten (10%) say that greater supply chain collaboration would provide the biggest boost.
While identifying some strong positives, the report, completed in conjunction with NatWest, also points out that the current trajectory of manufacturers’ business plans still falls short of where the sector needs to be by 2026. And, while companies can innovate and work hard to tackle many of the internal and supply chain challenges they face, creating the right business environment through an ambitious, comprehensive and long-term industrial strategy spanning all Government departments will be critical to support growth.
Charlotte Horobin, Midlands Region Director (Interim) at EEF, said: “We need to get this right and we need to get this in place now so that manufacturers’ growth ambitions are supported across the pre- and post-Brexit divide. It is not enough to talk about an industrial strategy – it is time for the Government to draw a line under the stop-go efforts of the past and to demonstrate its commitment to industry by putting some much-needed flesh on the bones.
“Manufacturers are not just talking about future growth – they have firm plans in place to make it happen. Their ambition and drive will help get the sector and our economy on the road to stronger, better-balanced growth, but this must be matched by Government. If we are to stay the distance and realise the full benefits for the UK then complacency is not an option.”
