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UK manufacturers need to pull together

01 December, 2023

Faced with unrelenting pressures from a variety of sources, UK manufacturers are coping with a plethora of problems. Nikesh Mistry*, Gambica’s sector head for automation, suggests that one way of dealing with these issues is to learn how manufacturers that are successfully weathering the storm, are managing to do so.

Recent economic, social and political pressures have seen manufacturers across the UK facing significant supply chain pressures. The Covid-19 pandemic, the war in Ukraine, Brexit and other recent global events, have resulted in continual disruptions to the production and transportation of raw materials, components, and finished goods which, in turn, has led to shortages, delays and increased costs.

Gambica’s members are constantly discussing how this has affected their productivity and efficiency, and the dangers of filling order books without keeping to timelines when releasing orders. 

The impact of supply chain pressures on VSD, motor and soft-starter manufacturers has been varied. Some companies have been able to weather the storm relatively well, while others have struggled to meet demand.

One of the biggest challenges has been securing raw materials and components. For example, VSDs and soft-starters use semiconductor devices, many of which have been in short supply with high costs. Furthermore, transportation has also proved to be a hindrance. The global shipping crisis has made it difficult and expensive to move goods around the world, let alone the costs of fuel and energy, resulting in major delays getting products to customers.

With the manufacturing sector being heavily reliant on profitability, these rising costs are reducing margins for UK manufacturers. And when the Government is setting goals for achieving net-zero targets, and there is a constant push to digitalise, it is becoming increasingly difficult to invest in new technologies when existing production is struggling.

How to tackle these issues has been discussed by some of our members, but finding a solution that fits all is definitely not easy.

One important step is to diversify supply chains. This means sourcing raw materials and components from a variety of suppliers, rather than relying on a single source. This can help to reduce the risk of disruption if one supplier has problems.

Another important step is to improve inventory management. Having the right amount of inventory on hand to meet demand, without overstocking, requires fairly accurate forecasting which can help to cut costs and avoid stockouts.

One factor that many of our members have suggested is the need for transparency with customers to manage their expectations. If customers are aware of potential delays, then there is greater understanding between the two parties. Obviously this is a difficult situation for manufacturers because they do not want to lose business to a competitor who may have an alternative supply route. It is a tough time for the industry as a whole.

Looking at the ongoing global difficulties, these pressures are likely to continue for some time. UK manufacturers must work together as an industry to ensure that we maintain our competitive advantage against both Europe and the wider world, and it is imperative that we do not fall behind as a result of these pressures. 

Utilising trade association memberships, and maintaining contact with organisations such as Innovate UK, Make UK, Knowledge Transfer Networks and others, is essential if UK businesses are to understand the industry, the market and ensure that we are all working as one. At the end of the day, the goal is the same for all manufacturers, and in difficult times we have to look beyond minor differences and understand that there is benefit to aligning as an industry. The best way for organisations to manage the pressures on their supply chains is to find out what those businesses that are coping are doing, and working together to find the best solutions. 

 

* Gambica is the trade association for the automation, control, instrumentation and laboratory technology sectors in the UK. You can get in touch with Nikesh Mistry on 020 7642 8094 or nikesh.mistry@gambica.org.uk, or via the Gambica Web site: www.gambica.org.uk 




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