The future is bright according to Make UK’s Q2 Manufacturing Outlook. Their latest report shows growing confidence amongst the UK’s manufacturing community, with 36% more companies this quarter reporting an increase in output and 34% reporting increased orders. Furthermore, the report suggests that a majority of respondents are expecting this recovery – currently already outpacing previous expectations – to continue through the next quarter into autumn.
This is fantastic news for UK industry but, as we all know, every silver lining needs a cloud to carry it, and in this instance that cloud may well be increasing volatility and disruption in international supply chains, impacting on manufacturers’ ability to secure the raw materials and components they need to keep up with growing demand and order books.
As recent events demonstrated, a single incident, such as the running aground of just one container ship can have significant knock-on problems for global freight. Granted, this was the world’s largest container ship, with 20,000 containers on-bord, creating a queue of over 370 additional freightliners, but it’s still a good example of how easy it is to create supply chain chaos on a global scale.
In a similar vein, the disruption to mining activity in a number of countries has resulted in a global shortage of copper, in turn impacting on the supply of brass and other copper-based alloys. While China’s swing to being a net importer of steel resulted in similar shortages in the global steel market.
What do these events have in common?
These unforeseen events have acted together to create a level of volatility businesses haven’t seen in a generation and is projected to stay with us for the next 12 months or more.
While British companies are powerless to change the market conditions causing the volatility, they can develop strategies to allow them to successfully manage their exposure to the conditions and allow them to take full advantage of the growing confidence we are currently experiencing.
At its most basic level, companies need to learn how to become more flexible and responsive.
Given the complexity of today’s supply chains, it’s not an easy task. Making your own company more responsive is hard enough, but every business within your supply chain then doubles the complexity of maintaining responsiveness, making it extra challenging to react quickly and efficiently in turbulent times.
These challenges include:
- Identifying new solutions to changing market conditions
- Evaluating and selecting the most appropriate option
- Validating required changes to components and products
- Designing the revised product for manufacture
- Communicating all changes and implications through every link in the supply chain
The good news is the adoption of digital tools within the supply chain can help companies make significant advances in improving responsiveness in volatile situations.
How can digitalisation help with crisis management?
The first stage is revising your designs and specifications for the product, addressing the specific issue confronting the supply chain.
A CAD/CAM package allows you to quickly review a range of alternative design revisions to find the most effective solution and translate the new design into a bill of materials and validate manufacturing processes, to share with collaborators in the supply chain.
Digital simulation tools allow manufacturers to validate the performance of alternative materials and designs, while proving the functionality of the finished product. This could allow companies to replace one raw material, temporarily unavailable or in short supply, with another and improve its responsiveness to unpredictable market conditions. Similarly, simulation tools then allow users to swiftly complete the design for manufacture process.
Finally, built-in data sharing tools allow these design modifications to be pushed to all members of the supply chain, ensuring everyone involved is aware of changes and the implications to their own sourcing and manufacturing processes.
This is just a small part of what can be achieved when manufacturing businesses adopt the digital tools available to them. Over the next three articles we will explore the use of digital solutions in improving business robustness and resilience.
ABGI is a leading international tax incentive and innovation management advisor. We help companies accelerate their innovation activity by identifying and securing appropriate funding in the form of grants, tax incentives or commercial funding.
With 30+ years heritage and 200 experts, we manage £1.6billion of innovation incentives annually across 19 countries, for some of the world's best-known brands.
For further information digital solutions for manufacturing email [email protected] or call him on 07807 739033.