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Industry Insights

Annual Manufacturing Report 2018: The Highlights

Annual Manufacturing Report

It seems like only yesterday we published our review of the Annual Manufacturing Report 2017. Since then, manufacturing has been a whirlwind of data, the Internet of Things (IoT) and Brexit uncertainty — and before you’ve had time to think, 2018’s edition of the report has landed on your desk.

In this blog post, we present you with a rundown of the biggest talking points from this year’s release for some easy lunchtime reading:

Smart Factories & Digitalisation

Aside from Brexit, the growth of IoT and the increasing digitalisation of factories have been the topics we’re all talking about. The Annual Manufacturing Report 2018 makes for pleasant reading in terms of attitudes to smart factories and digitalisation within manufacturing.

80% of manufacturers believe Smart Factory technologies will lead to an improvement in supply chain relationships, while 89% say they will allow their staff to work smarter. 92% said the technology would enable them to increase productivity on an employee-by-employee basis.

In fact, many of the report’s graphs show the overwhelming backing of connected machinery and using the data collected to support process innovation, customer service and business growth. It’s clear that we’re past the ‘limbo’ stage of weighing up the options offered by digital technologies. Now, the majority of manufacturers fully understand that their business success depends on how well they are able to adapt to and install these developments.


An interesting picture of investment in UK manufacturing was also presented by the report. When asked how they view the UK’s post-Brexit investment climate, 52% agreed that it would be financially tough, especially for SMEs. Considering that 39% of respondents agreed that they were nervous of the uncertainty and would avoid making an investment, it’s clear that UK manufacturers are still wary of the current and future market.

Despite this, an overwhelming 87% of manufacturers said they were at a point where they felt ready to invest in digital technologies to increase productivity. Clearly then, while nervousness remains, manufacturers do see the value in investing — their decisions are simply being hindered by wider market concerns.

Skills & Training

Apprenticeships have been seen by many as one way of addressing the manufacturing skills shortage. This is a sentiment shared by many of the respondents featured in the report, with 71% believing that apprenticeships are now viewed as a genuine alternative to higher education.

However, many identified problems with the new Apprenticeship Levy, which was introduced in April 2017. Under the Levy, employers who pay more than £3 million yearly on wages and salaries will pay 0.5% to the government. This is then reimbursed should the companies select an apprenticeship scheme from an approved trainer. Just 5% have total confidence in the Levy, with 59% labelling it ‘inefficient’.

Likewise, manufacturers have concerns over the UK’s education system and how it is preparing young people for a career in the industry. 57% believe that the education system should be overhauled to deliver the skills that manufacturing both needs and wants.

However, there could potentially be a solution on the horizon, as 86% stated that manufacturers have a responsibility to get involved in training to deliver the skills the workforce needs. Clearly then, manufacturers see the value in training and are prepared to get involved to support the skills development of young people.

Government Policy and Overseas Growth

The government policy section of the report is largely dominated by Brexit, as you would expect given the enormity of the impact it could have. 54% of manufacturers believe Brexit will cause chaos in their industry, while just 32% believe Brexit negotiations will be easier than we initially thought.

Despite this, 72% of manufacturers have confidence in overseas trade despite the uncertainty surrounding Brexit, and also believe that the current conditions are good for growth. Just 30% said that they will focus on their home market rather than a new overseas market.

And it seems manufacturers are being smart about how they react to lower exchange rates caused by Brexit. Although 26% said they were using the low pound for short-term profits, the remaining 74% said they were using the low pound to keep prices competitive and ultimately grow their market share.

Despite their reservations about Brexit and what it could mean for manufacturing, it’s pleasing to see the positive British outlook remains unaffected. 84% said that regardless of the eventual Brexit results, Britain has the drive to succeed as an industrial nation.

From adopting new technology to reacting to Brexit uncertainty, one thing is certain: manufacturers are ready to tackle the challenges of the next 12 months with a positive outlook and unwavering determination.

Whatever your aims are for the year ahead, K8 Manufacturing ERP software from KCS helps drive efficiencies, streamline processes and ultimately enables you to get more from your business. For more information, contact us today or request a demo.



Categories: Manufacturing, ROI

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