Getting the strategy right

May 1, 2019

Tony Bullock, senior manager of Chartered accountants, business and financial advisers Armstrong Watson, reflects on the findings of the Annual Manufacturing Report 2019 and reveals how effective strategic planning can enable manufacturers to take advantage of the opportunities from emerging technologies

The latest ‘The Manufacturer: Annual Manufacturing Report 2019’ once again tested the mood of manufacturing within the UK, revealing a mixture of optimism, uncertainty and concern among industry leaders. Inevitably, Brexit is one of the major areas causing uncertainty to manufacturers in the UK; however, there is clear eagerness and optimism among the sector when looking forward to adopting and utilising the technological revolution and embracing 4IR. Of those manufacturers surveyed, 81 per cent suggest they are ready to invest in new digital technologies to boost productivity, while a staggering 91 per cent agree that data from connected machines will improve decision-making and reduce costs.

Despite this confidence that new technology will improve efficiencies, increase productivity, and reduce costs, the report also highlights that many manufacturers are just beginning their digital journey.

So if the benefits of digital technologies are significant, why are some business owners slow to embrace these changes and what can we do to overcome these?

Investment

While uncertainty reigns, having the confidence to invest in your business can be a difficult decision and knowing where to find funding can be difficult, but it needn’t be. Government is going some way to assist, with beneficial Capital allowances incentives, Research and Development Tax credits, and the introduction of the Made Smart pilot scheme in the North West. There are also several other ‘non-traditional’ routes to access funding for your business.

Lack of direction

It’s sometimes difficult to understand how digital technologies could work to improve a business, often because business owners don’t have the time or resource to sit and work through it, however, getting the right support and advice, and setting a business strategy is an essential starting point before looking to make any change.

Skills gap

This is well documented in the manufacturing sector, with businesses struggling to find the skilled resource for their businesses right now. The workforce of the future will look very different in the industry and recruiting people with the right skill set is paramount to the successful implementation of a business strategy.

Culture

Understandably, some manufacturers will be resistant to change – and perhaps for good reason – however, to survive and thrive, manufacturing business owners need to look beyond what’s working now and look towards succession planning as stakeholders’ expectations continue to change.

While manufacturing leaders can take affirmative action to help prepare their businesses to succeed and prosper during the Fourth Industrial Revolution, what is clear from the survey results is that this can’t be done in isolation. Whether this requires a change in governmental approach, education and training, through to a significant culture shift, what is for certain is that those businesses that carefully plan and execute
a well thought out business strategy will have the greatest opportunity to reap the reward.

Armstrong Watson
If you’d like to discuss how you could embrace a future-forward business strategy for your business, please get in touch with Tony on: 01434 375550
tony.bullock@armstrongwatson.co.uk
www.armstrongwatson.co.uk
@armstrongwatson

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