Rob Phillips looks at the issues affecting the industry and how UK manufacturing can bounce back
According to the British Chambers of Commerce (BCC), the UK manufacturing sector risks stagnation. This warning comes from the BCC’s Quarterly Economic Survey (QES) which saw manufacturing export sales drop to their lowest levels since 2009 in the final quarter of 2015.
The UK manufacturing sector is something of a rolling stone, needing to constantly move forward in order to develop. In recent years, this forward motion has yielded developments such as wider adoption of advanced techniques like additive manufacturing, or 3D printing.
Yet it appears that, contrary to age-old proverb, a rolling stone can gather moss. The BCC surveyed 7500 manufacturing firms and found a consistent slump in the number of export orders and sales in the final quarter of 2015. The concern here is that this may prove to be a troubling forecast of things to come for the sector.
Of course, if this is a sign of problems for the UK manufacturing industry it is one we have seen coming for a considerable amount of time. As John Longworth, director general of the BCC puts it, the current climate in manufacturing is one of export barriers and skills shortages, and there are decisions to be made as to the best way to tackle these issues.
However, the burning question that really needs answering is, what can be done to support UK manufacturing?
One of the core problems highlighted by the BCC was the decrease in export sales across the manufacturing sector, causing it to issue a warning to businesses to avoid taking too many risks in the face of global uncertainty. While avoiding taking risk is very wise advice, such a broad statement may discourage smaller original equipment manufacturers (OEMs) from approaching international markets altogether.
At Accutronics, international sales accounts for the majority (95%) of our overall annual sales. The reason that we are so successful on the international stage is down to the meticulous planning process that goes into developing our international trade strategy to minimise risk.
The first thing a small to medium sized business looking to export should do is research relevant application market sectors. As our batteries are regularly used in medical devices, we invest a lot of time in researching an intended target market before we consider approaching businesses directly. Once we are confident that we have the capabilities to meet specific requirements, such as country specific regulations, we approach individual companies to become strategic suppliers.
However, no amount of desk research in the world will be half as effective as simply reaching out to the market directly. Once a business has sufficient knowledge to do so, it is advantageous to travel to trade conferences and exhibitions in the region to get some direct experience and build relationships with potential customers that are more meaningful. This makes it easier to establish permanent supply links internationally.
Up skill the market
International sales are just one part of the puzzle that is UK manufacturing according to John Longworth, director general of the BCC. Without a unified response to the skills gap from academic and industrial sectors, an increase in international trade will struggle to achieve sustainable growth in the future.
To combat the skills gap and create a manufacturing climate that thrives in the long-term, businesses need to take greater advantage of government-supported programmes such as the Knowledge Transfer Partnerships (KTPs). These partnerships allow graduates to develop necessary skills while working on projects for businesses and providing new ideas and insight that can help to develop innovation. Accutronics has used the KTP vehicle to great benefit. Without a wider adoption of KTPs and such-like, the future could continue to look bleak for UK manufacturing.
While there is work to be done to enable UK manufacturing to return to a position of strength, it’s not impossible for manufacturing companies to shake off the moss and start to expand their reach if they are smart and brave enough to take advantage of the opportunities available.
Rob Phillips is sales and marketing director of professional battery manufacture Accutronics.