Skills shortages raise worries manufacturing may not capitalise on Industry 4.0

INDUSTRY 4.0 is set to revolutionise the manufacturing industry – providing there are enough skilled engineers available to implement its innovative techniques.

Often dubbed the fourth industrial revolution, Industry 4.0 outlines how digital technology will influence the future of the manufacturing sector.

Manufacturing analysts believe the processes will have a big impact on the sector with increased productivity, better data analysis, increased competitiveness and lower manufacturing costs just some of the areas to benefit.

However, there are concerns that a lack of understanding about the techniques involved could actually hamper the industry, while many are worried that the skills required to implement the processes might also be in short supply.

Some of these concerns were aired during an event organised by accountants and business advisor MHA MacIntyre Hudson at Jaguar Land Rover to promote the publication of the fifth MHA annual Manufacturing and Engineering survey.

The report, which collates responses from more than 550 SME manufacturers and engineers across the UK, has been supported by Lloyds Bank Commercial Banking.   

Chris Barlow, partner at MHA MacIntyre Hudson in Birmingham, said: “Many of the elements to arise out of the discussion on Industry 4.0 were thought provoking, but it also highlighted the lack of awareness about the term and what its intentions are.

“We need to raise the level of understanding and to make people recognise the great opportunities innovation is offering the industry, which was evidenced by much of the work taking place at Jaguar Land Rover.

“If we can begin to raise awareness levels amongst children at school then this will help to generate the skilled workforce of the future.”

He said the government remained keen to raise standards, which was why it was talking about broadening the grammar school system.

“However, why should this be limited to grammar schools. If we made it a part of the national school curriculum then hopefully more youngsters would want to enter the industry when they leave,” added Mr Barlow.

“Many firms are also saying that the approach should be more vocational, which may also be a step in the right direction.”

MHA’s Manufacturing and Engineering survey is now available.

The main findings of the report are:

•    Respondents are planning for growth but against a background of cost increases, skilled worker shortages and Brexit business confidence has been reduced.
•    Half of all respondents put skills shortages at the top of their agenda. Most businesses want government to expand skills training for the future work-force in Secondary Schools, Higher and Further Education (FE) colleges.
•    68% of respondents believe their main competitors are UK based and 32% said their main competitors are based within their own region of the UK.
•    47% of respondents expect to increase their staff numbers in 2016 (an increase of 8% from last year), with 57% of companies intending to take on apprentices or trainees.
•    Of the respondents that anticipate their staff numbers increasing in the next 12 months, 59% need to recruit production staff. However, 41% indicated that they have trouble recruiting skilled machinists / technicians.
•    18% of businesses reported that recruiting appropriately skilled staff is the main barrier to growth over the next 12 months; this is a decrease of 10% from last year which is encouraging although this may just be a reflection in the shift of concern towards the effects of leaving the EU.
•    Where recruitment is a barrier to growth, 31% of respondents favoured adopting lean manufacturing strategies and 23% favoured automation or further automation as a coping strategy. Shift working or flexible working patterns (25%) was also seen as a viable option.
•    When asked about the availability of skilled recruits, only 11% had a positive outlook compared with 49% having a negative outlook.