James Pozzi talks to Steve Winder, RVP manufacturing at Epicor, about the software firm's recent Inspired to Make It report, illustrating the UK's Inspiration Gap.
Do you feel the notion of an inspiration gap is something that deserves more attention from wider industry?
Absolutely. We were very interested in the feedback we got from the report, and it’s quite interesting that if you see an organisation inspired in terms of what it does, then it gives you a very different feel for the company while also demonstrating how its employees feel about it. A good example of this was on a recent visit to Red Bull Racing in Milton Keynes, which is a company very inspired. It’s an organisation which exudes a “can-do” attitude, and I think that’s something that culturally, we need to promote within all of our manufacturing industries. If you look at certain sub-verticals in manufacturing where we tend to be more inspired – motorsport, aerospace and defence – it’s no coincidence the UK leads the world in them. It also seems industries in commodity spaces are more greatly affected, rather than ones where intellectual property and innovation are key.
The average inspiration rating over the last 18 months showed a rise of 0.65%, with 50% claiming they feel more inspired than in 2011. However, 98% said they felt the industry needs changes. In which areas are these required?
The general consensus is that change is needed but at a more rapid level. This spans across many areas, the first of which is skills. Almost all the organisations we speak to see people as their key asset. When competing with Asian markets for example, a concern highlighted by manufacturers in the report, it’s absolutely key we have the right skills. We need to make manufacturing and engineering more attractive to young people through more apprenticeships and training opportunities. More alignment between school curriculums and industry requirements also. What we’ve started seeing in other areas such as banking and accountancy, is the offering of school leaver schemes, which offer qualifications and a more modern day apprenticeship. I think manufacturing companies need to start looking at that as well. Secondly, the government needs to provide more support for the manufacturing sector, in areas such as helping manufacturers exporting their goods. Thirdly we really need to encourage innovation, with every manufacturer looking for continuous improvements, no matter how marginal. I like to use the analogy of the British Olympic Cycling team when discussing this subject. Why are they so successful? Because they are always looking for small gains, which may be insignificant on their own, but when added up, means the difference between gold and silver. That’s the kind of ethos manufacturing organisations need to go for.
In the report, a bigger number of smaller manufacturers state they are more skeptical about the UK’s ability to a global manufacturing leader than their larger counterparts. Why do you feel this is?
It’s a tough one to define. My interpretation is that a lot of those smaller organisations are working in very localised markets, whereas the larger companies tend to be trading certainly UK-wide or on a European basis. They have that market to play in whereas if you are a fabricated metal company providing components or materials in a small, local market then you would have a different perspective on it. Will this change? The smaller companies that are more innovative and forward thinking soon move out of being a 1-10 person company very quickly. You’d expect logically for those companies to be more positive and get larger quicker.
Similarly downbeat was 37% of manufacturers stating they see the industry being a “struggling survivor” going forward, with 34% saying it would become a “niche player” in the UK economy. Is this a fair assessment of where UK manufacturing is heading?
I think it’s difficult to generalise. What we see is a lot of awareness that changes are needed. And now the economy is picking up, companies are starting to think about what they can do to take advantage of that, whereas in the last 4-5 years, it’s been a case of battening down the hatches and just trying to stay in business. I work closely with SME businesses in our customer base, and I can pinpoint the real turnaround moment to July last year. This was when we started to see a lot more interest in what we do. We saw much more positivity and it happened very quickly. People were not only starting to feel more positive about their own prospects but those of the UK. In terms of the “struggling survivor” tag, this may be the best we’ll be in terms of markets where we are predominantly competing on price. But in other verticals we have mentioned where we are leading the world in innovation, this won’t be the case at all.
Technology as a future driver is a key find of the report. Does the UK need to up its software adoption in order to ensure increased manufacturing efficiency?
Yes, but it’s slightly more broad than that. UK manufacturers providing added service will be a key driver of the future. Not only does the software needed to improve business processes on the shop floor, but also the software to improve the quality of the service they are providing to their customer. To provide good service, you need the systems and solutions to do that in order to know your customer.
The full release of Epicor’s Inspired to Make It report can be viewed here.