Whether digital – such as Industry 4.0 – or geo-political – such as Brexit – disruption is everywhere for UK manufacturers. In a sector traditionally slow to react, this can be a major challenge. You have to create a lean and agile organization capable of responding to changing market conditions and customer expectations. How best do you achieve this? I’ll be talking through some lessons I’ve learned working with some of the world’s largest manufacturers at Innovation Tour London on April 12. Here’s a sneak preview!
After some troubling times, the manufacturing sector seems to be on the up again. Certainly there’s a refreshing wind of optimism about the industry – especially in the US. The NAM survey at the end of 2017 found that almost 94.6% of respondents felt positive for their own company’s outlook in 2018. That was up from just 64.3% a year earlier. We have to accept that the US government’s promise to slash corporation tax may have something to do with this positive feeling but it’s not just in North America.
While the Purchase Managers Index (PMI) for the US stood at 60.3 in February, Germany recorded an impressive seven-year high of 63.3 in January. The PMI measures the health of the manufacturing industry and the UK sits a little short of the US and Europe – although its PMI rose to 54.5 in February. One of the reasons for this lag can be put down to the uncertainty surrounding Brexit.
Getting to grips with Brexit
This cautious optimism was also shown in a recent EEF/AIG executive survey that found UK manufacturers are confident about the outlook but concerned about Brexit. EEF boss, Stephen Phipson, suggested that although UK manufacturers felt prospects were strong, Brexit had put the investment outlook on a knife-edge. In fact, while the respondents saw growth in global markets, they were concerned about a downturn for the UK economy in the second half of 2018.
I’m delighted to say that we have Alex de Ruyter, Director of the Centre for Brexit Studies at Birmingham City University presenting during Innovation Tour London. Alex established the Centre to bring together academics and researchers to deliver insight to government, business and the ordinary citizen of the impact and ramifications of Brexit. During his presentation, he will be providing a unique insight into the likely impacts that Brexit will have within the manufacturing and engineering industries.
His presentation will cover what manufacturers can do now – even when there is so much uncertainty about the final outcome – in areas where we can be very sure there will be change. You’ll hear from Alex about what he believes is the most sensible approach for dealing with the disruption surrounding Brexit.
The role of digital transformation
The other great area of disruption for manufacturers is in the digital space – especially when it comes to big data and analytics. In its 2018 National Manufacturing Outlook & Insights report, EKS&H found an optimistic US manufacturing sector that was looking to ‘Predictive Business Analytics/Big Data’ to help drive its technology strategies to increase productivity and improve customer service.
Data is fast becoming the new currency of business. However, there is so much of it to handle. Dealing with the velocity and variety of data – with Industry 4.0 and the Industrial Internet of Things – is a challenge every manufacturer faces. Releasing its value through transforming data into insightful information is where the leading manufacturer will win. It gives them the ability to re-define how they operate to improve processes and customer relationships while introducing entirely new product lines and revenue streams.
Manufacturing CIOs understand the importance of advanced analytics but often find it difficult to gain the most from their digital investments. OpenText and Industry Week asked CIOs in North American manufacturers whether they had gained advantage from their investment in digital technologies. Only 26% said they thought they had.
One clear area where respondents struggled was the ability to fully exploit their data. When asked, two thirds of respondents said that they had difficulty in collecting, storing, managing and analysing information.
During Innovation Tours London, I’ll be looking at the issues involved harnessing the power of big data to drive better business decisions. I’ll look at whether tradition approaches to information management and analytics can provide the necessary solutions in a big data environment. I’ll show how different manufacturers have been able to make digital transformation work to their advantage.
I hope you can join us at Innovation Tour London on April 12. It promises to be a great day that will give you some unique insights into what is disrupting and transforming the manufacturing industry today.