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Technology and the UK Manufacturing Industry in 2017

Download the Annual Manufacturing Report 2017 report from The Manufacturer here, to find out how technological advancements are effecting the manufacturing in the UK in 2017.

The report is an interesting look at the state of the UK manufacturing sector this year, and a glance at expectations and challenges for the time ahead.

One big theme of the report is the uncertainty which has marked the past year across the board in the UK, and the impact that may have had, for example on investment and exports, for manufacturers.

Some other interesting themes to emerge from the report concern both the challenges and benefits for the UK manufacturing industry in 2017, which stem from the technological advancements dubbed 'Industry 4.0'. Industry 4.0 includes concepts like the IoT (Internet of things), robotics and AI (Artificial Intelligence), and automation, which mark an exciting time for on the horizon for manufacturing and open the doors for massive investment in technology.

In fact, two-thirds of survey respondents were aware of Industry 4.0 concepts, and many of those were either in the process of implementing connected Industry 4.0 concerns or planning to take those steps soon. Furthermore, these investments, the report has found, are overwhelmingly coming from cash or assets within businesses, as faith in banks and borrowing crashed alongside the financial system in 2008.

This bright future for technological advancements has also meant a renewed interest and focus on the importance of education across the sector. Whilst attendance at top universities is praised in the report as 'a great aspiration', the real focus of education and training to support the growth of the manufacturing industry and the further advancement of technology in the sector is on 'strong STEM [Science, Technology, Engineering and Maths] learning and encouragement from schools to take technical courses at 16'.

In order to prevent a talent shortfall in the UK's future manufacturing industry, there needs to be an increased focus on encouraging young people into careers in manufacturing: finding skilled recruits is not just a 2017 challenge, but an issue that the report predicts will plague manufacturers into the future, if careers in manufacturing are not demonstrated to be a rewarding and exciting option for a diverse cohort of school leavers. Survey respondents suggested that a reduction in negative reporting about manufacturing in the media would help expedite the process of making manufacturing an appealing career prospect for young people.

Interestingly, the report also told of a tendency towards reluctance in investing in modern IT systems, like ERP (enterprise resource management) software, amongst senior management in UK manufacturing firms. As investment in ERP systems has been shown to bring significant ROI to manufacturing firms, this would seem counter-intuitive.

71% of respondents though have increased their investment in IT over last year, with a further 17% matching last years' investment, and much of that amount expected to go into ERP systems.Those manufacturers that are investing in IT systems are seeing leaps in improvement in areas from productivity to customer service. In fact, by far the biggest benefits companies reported seeing was an increase in productivity.

Some of the other technological advancements in manufacturing included in the report are:

  • Connectivity and the Internet of Things. According to the report, the two biggest concerns when it comes to implementing or even continuing to use connectivity-related technology were development costs and a lack of expertise within the company.
  • Additive, or 3D, printing, which almost 70% of respondents said they were already had in use within their manufacturing prcess
  • Automation which, whilst 65% of respondents report to already be using, most respondents who haven't yet put automation into place report being 'unsure where to start' as the main reason - it is clear that much of the industry needs further information and education on exactly what automation entails, and how it could benefit manufacturers going forward in the UK.
  • Servitisation, arguably the least-known-about Industry 4.0 concept with 44% of survey respondents assessing their knowledge and use at the 'beginner' level. Servitisation is the movement from purely product-based offerings, to the addition of some kind of service related to that product, from warranty agreements, to lease or hire offerings, to maintenance contracts. Overwhelmingly, respondents foresaw customer retention related benefits of servitisation, including 83% who think it will hep them to sell more products and 74% who responded that servitisation will better satisfy customer requirements.

Overall, this report provides deep insight into the state of the Manufacturing industry in the UK. Despite the current uncertainty prevalent across the UK, the report shines a positive light on the manufacturing industry in 2017 and going forward. With an ever-increasing focus on technological advancements and industry 4.0, it is clear that manufacturers are beginning to invest heavily in IT, despite some uncertainty that delays the need for more widespread training and information about advances in the industry.

For the full report, download the Manufacturing Report 2017 from The Manufacturer here.