For UK manufacturing business owners and leaders with the right mindset, 2024 will present many opportunities. They will not be opportunities without their challenges, but as the great Winston Churchill is alleged to have said, a pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.
A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty. – Winston Churchill
The big challenges facing UK manufacturing in 2024 will be…
- A Growing Skills Gap. This is not a new one, or one that will be resolved in 2024, but the need to act and start to close the gap is growing, rather than shrinking. As more people retire, and some leave the sector for other industries, manufacturing has a job to do, to attract more people into the sector.
- The Need for Faster Technology Adoption. One area of technology adoption where we have a clear comparison with the rest of the world is robotics. The International Federation of Robotics produces a report that measures robot density; the number of robots per 10,000 employees in the manufacturing industry. The UK currently ranks 24th on this table with a robot density of 111 which is below the world average. Similarly with ERP systems, it is rare that you meet an SME manufacturing business that feels their ERP is brilliant and provides them with the data and solution that they need.
- The Race to Become More Sustainable. Whether you are interested in becoming more sustainable because it’s the right thing to do, or just to ensure your company continues to survive, the pressure to achieve net zero is increasing. And beyond net zero, manufacturing needs to consider the circular economy and its local community impact as part of its ongoing strategy.
- The Scaling of a Business in the Current Climate. The UK economy has not settled and bounced back since the beginning of Covid in March 2020. Couple this with the political uncertainty the UK has endured, the environment has remained unsettled to say the least. 2024 is predicted to be no better overall.
- Retaining Your Best Talent. Market forces beyond an SME manufacturing business leaders’ control are changing the labour market. We’ve had a cost of living crisis, energy bills hikes, working from home pressures, and the appeal of non-manufacturing sectors poaching young engineers and managers in their droves.
You could end the article here, and say, isn’t this all rubbish, let’s hide under a rock until it all goes away. But leaders with a progressive and growth mindset that are up for the challenge will read on, and say, so, what are we going to do about it.
So, for the manufacturing leaders with a growth mindset, that are looking for the opportunities in 2024, here goes… the big opportunities we see for SME manufacturers for 2024 are…
Improved market & customer intelligence
To help you scale your manufacturing business in 2024, the best place to begin would be to arrange to meet and have a coffee with your top 20% of customers. In most cases your top 20% of customers, contribute to 80% of your profits. Keep your brochures in your bag and ask them what their challenges are. What are their needs? While your competitors are busy firefighting, get out and meet the customers you want to retain for the foreseeable future. Help your customers solve their problems, and growth their own businesses, and this would be a good start to identifying your 2024 strategy and beyond. I great book to read full of tips on this subject is Piranhas in the Bidet by Phil Jesson. One of my top 10.
Engage with your key suppliers and build an understanding of the market with them. Understand how you can work more collaboratively and support each other. In most cases your suppliers will probably provide to your competitors, and other similar organisations too. What intelligence can you capture from your supply chain, and how can you become a partner to them. The world has changed, and the customer supplier relationship has become much more collaborative. Many organisations consider their suppliers part of their capability and future plans for the business. Do you?
Explore beyond your own network. Get off your backside and get out to explore different networks, where you can learn and grow your own skillset, as well as grow your business. Go to events that you wouldn’t normally attend and expand your thinking. It’s these chance events that often provide the most benefits. The Manufacturers’ Alliance peer groups, and our thought leadership events, are a great place to meet like-minded manufacturing leaders and share ideas. How will you expand your network this year?
Improved branding & growth
To help you to retain your best talent, attract the right fit people into your business, and achieve the growth that you desire, focus on your brand. Brand goes way beyond marketing and gets right to the essence of your identity as a business. A good brand strategy should cover; purpose, customer value, culture, capability, differentiation & competitive advantage, company values and business growth plans. Branding is not marketing, so ensure you are working with someone or a business that understands branding. There is a good explanation in this Branding vs Marketing article.
We continually here from young people that UK manufacturing has a branding problem. The image of the manufacturing sector in the UK is seen as labour intensive, male dominated, lacking diversity, dirty, and mostly boring hands-on jobs. We need to change this perception through better branding of the amazingly diverse cultures and mix of exciting roles available in the sector. Manufacturing environments need to be perceived as accessible and a good fit for young people. We will be covering this a lot this year, so watch this space.
We also need to attract more women into manufacturing. With just over 10% of leadership roles in the manufacturing sector, taken up by females, we still have a way to go for the manufacturing world to feel more accessible. You can read my thoughts on why we need more women in manufacturing here. Be the manufacturing business that stands out and start to work on your brand image.
Engage your team in developing your brand and growth strategy. We continually here from managers and team leaders in manufacturing organisations that they do not feel included or valued. They can often see the issues but are never asked for their opinions. Involving your people in the future plans for the business offers many benefits. You will learn what is really going on in your business for a start, and will gain ideas from people who are actually doing the job. People will also be more inclined to take ownership if they have been involved in the design of their own future. A good strategy to retain your best people too.
The Productivity Puzzle in UK manufacturing has been going on for some years, but one thing that is fundamental to understanding your own productivity is through better data visibility and management. We visit many manufacturing businesses that don’t understand their efficiency levels, product margins, or how well they are performing against the needs of their customers.
Technology has moved at such a pace over the past decade, there are huge mix of options for manufacturers to measure what is important in their businesses. Real time data capture is easily implemented and accessed with basic packages, such as, Microsoft Power BI, and the use of sensor technology.
The usual push back on technology adoption is either not having the skills / time to implement or the budget. If this is the case for you, the Made Smarter programme offers free consulting and support to help identify your needs, and guide your through the implementation.
Beyond the challenges of technology adoption, teams at the coal face are not engaged in process improvements on a daily basis. Managers are not trained well enough and steered towards establishing engaged and fulfilled workforces. Having a culture focused on continuous improvement maybe the only potential differentiator you have in your manufacturing sector, so train your managers to lead change and improvements. The Manufacturers’ Alliance has a number of leadership development offerings that may help, and are always open to ideas if we don’t have something off the shelf that suits.
There is a great paper here from the Productivity Institute on the UK’s Productivity Puzzle that is well worth a read: The UK’s productivity challenge: people, firms and places, that states “many UK firms have been following an unsustainable low wage, low investment, low productivity path.” Which is why our economy is currently vulnerable, and why we need an industrial strategy that supports UK manufacturing’s sustainable growth.
We believe that becoming more sustainable is the right thing to do. We should be looking after the planet and our communities better. But if saving the planet is not your thing, it’s rare that a sustainability improvement doesn’t directly impact the bottom line.
More and more large organisations, OEM’s and consumer facing brands are now starting to request your sustainability activities and how you plan to reach net zero as the norm. The next 5 years will see more of this making its way into the B2B manufacturing space, and the way we all do business.
Doughnut Economics is a great place to explore thought leadership of becoming more sustainable as a global community. The doughnut consists of two concentric rings: a social foundation, to ensure that no one is left falling short on life’s essentials, and an ecological ceiling, to ensure that humanity does not collectively overshoot the planetary boundaries that protect Earth’s life-supporting systems. Between these two sets of boundaries lies a doughnut-shaped space that is both ecologically safe and socially just: a space in which humanity can thrive.
The majority of Manufacturers’ Alliance customers are on the journey to achieving net zero, and a lot are doing more than reducing their carbon footprint. From what we have seen this focus on a cause greater than the business, has affected the culture of the business in a positive way. Teams are engaged in finding more ways to improve the business and feeling that they are making a positive difference in the process.
There are many sustainability networks out there sharing best practice, so get yourself along to learn how other manufacturers are shifting towards net zero. You can attend one of our peer group meetings to see for yourself.
Culture is the collective set of values and behaviours shared within a group a people, and quite often in a manufacturing business, there are shared values and behaviours across the whole organisation, but also sub-cultures and differences between departments. And it’s these differences that often drive silos and a lack of flow within the organisation.
Clarity of vision, mission, objectives, and values, coupled with cross functional teams will be a game changer for you this year, if you are not already embracing them. The start of the year is a good time to revisit your vision of the future, and how this will affect your people. It’s also a good opportunity for a rallying call for help and support, and an opportunity to start new collaborations between departments.
If there is one thing that has worked every time for me when supporting businesses through improvement and change, it is cross functional teams. Working towards and agreed goal together, but provided the autonomy to come up with how we will achieve it together. Works every time. Not working for you? Maybe you have people in your team/s that are not a fit? Have a read of this article is this is your hunch – The Types of People Who Don’t Work Well in Teams.
Improved team performance
All of the above challenges and opportunities will need teams that are able to work effectively together and deliver results. Which can only be achieved through great leadership, high performing teams and the right culture. Get this right, and the journey ahead will feel much less uncertain, and more exciting.
We have a free Modern Manufacturing Leadership assessment on our website, if you would like to take a 3-4 minute assessment of yourself against our insightful benchmark. You will receive an instant result with your key strengths and advice on development areas.
If you’re an avid podcaster, my top listened to podcast of 2023 was the Diary of a CEO with Stephen Bartlett, and his recent book 33 Laws of Business & Life is an excellent read. Keeps me tuned into what is current and helps to raise my own levels of self and social awareness.
Improved UK Industrial Strategy?
The governments advanced manufacturing plan, published on 26th November 2023, sets out the actions they are taking for the UK to be the best place in the world to start and grow a manufacturing business. The plan will ensure the UK continues to lead in the development and deployment of clean and digital manufacturing technologies.
It will also provide businesses with a clear commitment to the longer-term success of the sector. It will take targeted and strategic action to ensure our business environment and international competitiveness remain strong.
The government have set out the following 3 priorities:
- investing in the future of manufacturing by extending and building on our successful programmes to 2030, and forging partnerships with businesses to support market-led investment in innovation and research and development (R&D)
- cooperating internationally and increasing UK capability to build supply chain resilience, boost economic security and ensure our sectors have access to the goods that drive prosperity
- reducing costs and removing barriers to boost competitiveness and ensure the UK retains its attractiveness to international investors in the long term
To read the full 47 page report follow the link here: https://www.gov.uk/government/publications/advanced-manufacturing-plan
We are here to support SME manufacturing leaders through 2024
The Manufacturers’ Alliance are here to help SME manufacturing leaders maximise on these opportunities, so do reach out if you are looking for a fresh perspective in 2024.
- We will be focusing our efforts this year on reducing the impact of the challenges for SME manufacturers and helping them to maximise on the opportunities.
- We will be utilising our community of brilliant manufacturers to share ideas with other manufacturers in need.
- We will be collaborating more with high value manufacturing support organisations and helping them to engage with our manufacturing community.
- We will be focusing on modernising manufacturing leadership through our events, peer groups, and leadership academy.
- We will be supporting all our customers in being a force for good in the world and making change for the better.
Whether you are an existing customer, or considering engaging with us in the near future, we are always open to supporting manufacturing leaders with their challenges. A lot of the risks and opportunities highlighted can be hard to navigate, so do reach out if you need help, because we love to help people and grow together!
Regards Gary Sheader
Founder & Managing Director, Manufacturers’ Alliance