One year on from the launch of the Made Smarter Review, it’s lead – Professor Juergen Maier – took to the stage to chair the MTC’s Digitalising Manufacturing Conference 2018.
The industry-led, government-backed Made Smarter Review was published just hours before the opening remarks of last year’s Digitalising Manufacturing Conference 2017, hosted by the MTC and held at the Advanced Manufacturing Training Centre in Coventry.
Twelve months on, where does the UK stand and what has changed in the global industrial landscape? As with last year, I managed to grab a coffee with Juergen prior to delegates taking their seats.
[I also sat down with Dr Lina Huertas – the MTC’s head of technology strategy for digital manufacturing, to discuss how failing to embrace digital transformation risks UK jobs & investment. You can read our conversation here]
The environment over the past 12 months hasn’t been the most conducive to progress, according to the digital doyen, but he described the progress that has been made as “pleasing”.
With almost all of government’s collective attention focused on a real-world version of ‘Deal or no deal’, Maier agreed that most of the progress achieved could largely be attributed to the coming together of industry.
“Brexit has actually been a positive catalyst for collaboration,” he noted. “I have never seen such a level of cooperation in my 30-year industrial career; it’s been great to see and absolutely must be sustained.”
This unprecedented level of teamwork has been driven by a sector-wide appreciation that the challenges manufacturing faces are too large for any one company to tackle alone, combined with a sense that time is fast running out – as Maier himself has told The Manufacturer’s Nick Peters, the UK stands atop a “burning platform”.
So, what progress has there been?
Made Smarter Commission
Two key markers have been achieved. First, last November’s Made Smarter proposal has been translated into a Made Smarter Commission tasked with delivering the vision for the future of UK manufacturing and driving the digitalisation of the sector.
Again, the commission is industry-led and thankfully comprises both large OEMs and smaller-sized businesses. The 17 members represent the likes of GSK, Renishaw, Lambert Engineering, Rolls-Royce, Airbus, AT Engine Controls and Jaguar Land Rover, alongside associations such as EEF, the CBI, the Royal Academy of Engineering and the TUC. It is co-chaired by Business Secretary Greg Clark and Juergen Maier.
Though the commission has a fairly hefty remit, it can be succinctly summarised as solving the problem of how to encourage and support more businesses to adopt and use digital technology – particularly SMEs, who typically don’t have the financial, knowledge or capacity resources of their larger multinationals cousins.
Achieving that goal will largely rely on how positive the results are of the second key milestone – the launch of the Made Smarter North West Pilot.
Made Smarter North West Pilot
Working through five North West Growth Hubs (Greater Manchester, Liverpool, Cumbria, Lancashire, Cheshire and Warrington), the £20m pilot aims to engage with 3,000 local manufacturers and provide intensive support to 600.
Over the next few years, the pilot will test out the most effective ways to engage with manufacturers and encourage them to adopt technologies such as artificial intelligence, virtual reality, IoT and sensors, 3D printing and robotics.
Widely thought of as a blueprint for the rest of the UK, if successful, the pilot could help unlock additional funding worth £120m.
The amount of material surrounding the digitalisation of manufacturing – and the general tone of said material – may appear hyperbolic, but the opportunities digital technologies provide are actually far more transformative than many people recognise, Maier explained in his opening comments.
“Making business-owners and decision-makers more aware of those opportunities relies on two things: sustained support from government and creating an improved innovation ecosystem where people are exposed to and can play with these technologies.”
The importance of being exposed to the digital technologies available today – not of five or 10 years ago – was reiterated by Marcus Burton, director of Yamazaki Mazak and vice president of the MTA.
“SMEs don’t have spare resources or inhouse ‘research teams’, so they require the greatest support. Not only do we need to ensure that access to advice, demonstrations, test projects and so forth is readily available, we need to make sure that SMEs know it’s available,” he noted.
A theme that ran through much of the day’s discussions was digital skills, or more accurately – the lack of them. The UK is losing out on a potential £63bn a year due to unfilled digital job roles, according to the non-profit education charity the Edge Foundation, and The Manufacturer’s own research has revealed that most manufacturers struggle to recruit, train and retain technical and technology-related roles due to a shortage of readily available talent.
“Skills are very much at the heart of the Made Smarter campaign,” said Clare Porter, head of manufacturing at the Department for Business, Energy and Industrial Strategy.
“We know that manufactures want to see how their peers are tackling the issue and those sorts of case studies and conversations are something we’re trying hard to facilitate more of.”
Acknowledging that the Apprenticeship Levy hadn’t been a universal success, Porter added that many businesses are still unaware of several aspects of the scheme, such as there being no upper age-limit for apprenticeships, despite contrary popular belief.
“[This] means employers can develop the talent that they already have, helping to address recruitment or skills challenges and encouraging workers to progress their careers. That’s just one example of why SMEs need to understand what’s available to them and the positive impact it might have on their business,” Porter said.
Unquestionably, one word has dominated conversations over the past 24 months – Brexit, and as important as the negotiations have been, our national naval gazing has taken our eye off the international landscape. Therefore, it was incredibly welcome – as well as a little worrying – to hear how other nations were already grasping digitally-enabled opportunities (and not just the obvious industrial stalwarts like Germany, Japan, Italy and France).
Mexico country may be synonymous with tourism and agricultural crops, but it has a significant and well-established manufacturing base – equating to around 18% of its economy, according to Abraham Tijerina-Priego.
Mexican manufacturers are expressing a huge amount of interest in digital transformation, but much like the UK, are unsure of the steps to take. There is also a huge disparity in digital maturity levels, he added; yet Mexico’s manufacturing sector is growing rapidly, particularly in relation to high-value manufacturing.
“The only missing link currently is a lack of federal initiatives around digital transformation, which is surprising given that digital technologies enable manufacturing to take place in high-cost economies and therefore could represent a threat to a low-cost labour nation like Mexico,” Tijerina-Priego said.
Mexico is already the world’s twelfth largest manufacturer by output and should the Mexican government announce a national initiative in support of digital transformation – and if the American congress can finally agree on the terms of the US-Mexico-Canada Agreement (formerly NAFTA), it won’t be long before the country enters the top 10 and encroaches on the UK’s spot at number nine.
Estonia has quickly risen to become one of the world’s most digitally advanced societies, with telecoms, banking and electronics all key sectors of its economy. Renowned for its highly skilled labour force, the country has invested heavily in its school to ensure young people have access to modern equipment and systems.
“It’s a long-term approach that is delivering huge benefits today, particularly around digital skills,” said Anu Kull, an advisor to Estonia’s Ministry of Economic Affairs and Communications. “Our young people have no fear for the future because innovation and disruption are a core part of a digital landscape they’ve been exposed to from a very early age.”
The challenge, according to Kull, is that cross-societal solutions are likely to generate the greatest rewards, yet most governments can’t (or won’t) operate cross-societally – they operate within siloed departments, within separate budgets and objectives.
Norway is a high-cost country that has traditionally been economically-reliant on its natural resources such as oil, hydropower, gas and minerals. Widley fluctuating oil prices in recent years has greatly accelerated the country’s economic diversification, according to Odd Myklebust – a research director at Scandinavia’s largest independent research organisation, Sintef.
The question is, can automation and digital technology help Norway pivot from being highly dependent on natural resources that don’t require skilled labour to successfully establish a credible manufacturing capability in the face of already strong and increasing global competition? And if it can, will we see other countries follow suit?
One nation that is already taking steps towards a more automated future is an even higher cost economy, Switzerland. The Swiss may have a greater stronger heritage in engineering and manufacturing than Norway, but both understand clearly the role automation and technology play in raising national productivity levels.
- Our progress in 2018 has been good, but nowhere near enough or fast enough – reflected in the widening gap between the UK and the rest of the world, particularly the G7 nations.
- It’s not important to define Industry 4.0 or the Fourth Industrial Revolution (4IR) as definitions have already changed over the past three years; our time and resource could be far better spent.
- The time of large batch sizes and mass manufacturing is rapidly coming to an end; the focus now is on customisation and flexibility.
- Collaboration between industry, government, universities, R&D hubs (i.e. the Catapults) is key.
- Every business is different and has unique requirements, but there are generic barriers.
- The Made Smarter Commission needs to help create frictionless know-how combined with easy access to technology and proven method of scaling pilot projects.
- Digital skills have now embraced the world, which means the UK is competing globally for the best talent.
- Manufacturers have a responsibility to train and upskill their workers, they can’t afford to wait for funding or official support mechanisms to become available.
- The UK has already lost not just jobs, but entire industries in previous technological revolutions, so it’s vital that our manufacturers grasp the opportunities available today – not in five years’ time.
- That requires switching to a more human-centered approach based around training and upskilling to deliver sustained economic and societal prosperity.