Driving UK competitiveness by digitalising manufacturing

Posted on 7 Nov 2017 by Jonny Williamson

Expanded over two days, this year’s Digitalising Manufacturing Conference offered a truly international perspective on the opportunities and threats facing UK value chains.

Digitalising Manufacturing - The opportunities from digital technologies are sheer limitless - image courtesy of The Manufacturing Technology Centre.
Over 10 years, industrial digital technology could boost UK manufacturing by some £455bn, according to the Made Smarter Review – image courtesy of the MTC.

You could not have asked for – nor planned – a more auspicious start to Digitalising Manufacturing 2017, hosted by the MTC and held at the Advanced Manufacturing Training Centre in Coventry.

Just hours before the chairman’s opening remarks on October 30, the country’s independent review of industrial digitalisation was published with claims that over 10 years, digital technologies could boost UK manufacturing by some £455bn.

If that number alone didn’t represent a salivating prospect, industrial digitalisation could also increase sector growth by upwards of 3% a year and create a net gain of 175,000 jobs, all while reducing CO2 emissions by 4.5%, according to the report.

To achieve such significant improvements, the Made Smarter Review lays out several key recommendations, all geared around addressing the three main challenges businesses face: Leadership, Adoption and Innovation.

The Made Smarter Review was led by Professor Juergen Maier, the same person who chaired day one of Digitalising Manufacturing 2017. As such, there was a palpable buzz as delegates took their seats ready to discuss how best to meet the challenges head on.

Challenge into opportunity

Lord Prior of Brampton kicked off proceedings by proclaiming that the Made Smarter Review could go down in history as “a truly transformative document.”

“Technology should not be seen as a threat, but as an opportunity. However, that’s only true if we are at the front end of advancements, rather than bringing up the rear,” he declared.

In his mind, how the UK addresses the Fourth Industrial Revolution will be more fundamental than Brexit, with digitalisation offering an effective means to tackle the country’s decade-long stagnation of earnings and national productivity.

Beneficially, the relationship between productivity, business investment and economic growth are self-repeating – each one drives the other two, added Dick Elsy, chief executive of the High Value Manufacturing Catapult.

Manufacturing technologies will be accelerated, through digital advances, such as augmented reality [AR] and the Microsoft HoloLens – image courtesy of HVMC.

Each UK Catapult centre helps to demystify technology and offers a practical, low-cost point of entry for businesses of any size – image courtesy of HVM Catapult. 

It was a sentiment Juergen Maier shared, noting that creating and assessing the ultimate wealth of a country will soon come down to how well it makes, innovates and exports. It’s a concept many countries have not only grasped, but begun acting upon; none more so than Germany, a nation whose industrial sector contributes more than 20% of its economy.

Martin Hess, deputy director general of industrial policy at the German Federal Ministry for Economic Affairs and Energy, discussed exactly that in his presentation on turning challenges into opportunities; something that was easy to say, but far more difficult to do, he admitted.

Supporting SMEs

With 3 million out of 3.5 million of Germany’s industrial companies classed as SMEs, a pivotal part of Germany’s approach to digitalisation, according to Hess, was the creation of its network of SME 4.0 Competence Centres.

Offering the guidance small and medium-sized companies often seek, the centres help businesses to realise that digitalisation represents the future of manufacturing.

The Made Smarter Review recommends that the UK adopts a similar approach via the creation of a National Adoption Programme and 12 ‘Digital Innovation Hubs’ – eight large scale demonstrators and five digital research centres.

The difficulty, however, lies in “changing the fan belt while the engine is running,” as Jeremy Silver, chief executive of the Digital Catapult, phrased it.

“SMEs don’t typically have the resources available to perform major technical and business model changes. Digital technology does allow smaller, more iterative change programmes, but that’s a concept many are still struggling to get their heads around,” he commented.

IT Data Digital Infrastructure Computer - Stock

By providing the education, businesses can find their own path matched to their individual requirements and goals.

That’s exactly where the UK-wide Catapult network can really play a strong part. Each centre helps to demystify technological advancements and offers a practical, tangible low-cost point of entry for businesses of any size.

By providing the education, businesses can find their own path matched to their individual requirements and goals. A vital, but often overlooked step, is to then cascade that learning through the value chain.

Global collaboration

As Emile Anér, senior policy advisor at the Swedish Ministry for Enterprise and Innovation, eloquently commented, “The changes created by digitalising manufacturing are so large and far-reaching, that any one nation or business simply can’t do it all themselves, and certainly not if they want best in class.”

It was a point picked up by Martin Hess, who added that, “Value chains are increasingly global, so bilateral and multilateral co-operation is vital to address the threats and opportunities.

“It is extremely important to find mutually beneficial common ground not least because the standards of the future are almost certain to be international in nature and based on interoperability.”

These standards, however, may take years to coalesce in to a perfect solution, and time is not on the side of businesses or nations. The key could be fail and fail fast, while continuously learning about how technology, people and skills applies to your particular organisation.

It was noted that the UK may be a literal island, but it doesn’t have to act like one; a timely point considering that the UK is currently engaged in lengthy negotiations with Europe regarding its future trading relationship.

Employee Engagement Innovation Collaboration Workforce Meeting - Stock Image

Almost all of the speakers, and most of the delegates, agreed that collaboration is an absolute must to succeed in the digital age.

Many of the speakers agreed that collaboration is an absolute must, yet international collaboration represents the pinnacle of achievements. The first step is often to change company cultures to better collaborate internally before broadening efforts to encompass supply chains and stakeholders.

Digital skills

Eva Lindström, State Secretary at the Swedish Ministry for Enterprise and Innovation, sparked a discussion around what government’s role was in digitalising manufacturing.

In her opinion, government support wasn’t about protectionism, but inclusion. More importantly, it was about working with academia to ensure that the skills of tomorrow were being imparted today.

“Digitalisation creates a need for completely new skills, which has to reflected in education. However, what about those already in work, how easy is it for them to return to education?” she asked.

In the future, there will far greater emphasis placed on lifelong learning. What is required is a system that is agile and able to respond in a timely, appropriate fashion to the demands of industry.”

That’s not to say that individual businesses don’t have a role to play, Lindström noted. Two-thirds of the 2030 workforce have already left full-time education, necessitating companies to adopt more robust upskilling and reskilling programmes.

The challenge lies in “overtraining” employees compared to current standards, essentially creating a future-proof pipeline of new talent with competencies based on what lies ahead, not what’s based on the past 20 years.

Engaging employees

As with any period of change, there will always be winners and losers. Stakeholders – government, industry, academia, research and innovation organisations, trade associations – need to determine how best to minimise the impact. For example, how does a country balance the jobs lost versus jobs gained; how do workers become empowered and move from being victims to become the driving force of the transition?

Stock - skills recruitment workforce staff employee - front office and back office.

How do you balance the jobs lost versus jobs gained; how do workers become empowered and move from being victims to become the driving force of the transition?

Tim Page, senior policy officer at the national train union TUC put it best: “We have to ensure that this revolution is something that isn’t done to our workers, but with them.”

The language and messaging around digitalising manufacturing needs to change, Page continued. We need to extoll the advantages and opportunities, rather than focusing on the threats and negatives. Just telling people not to be scared or uncertain won’t work, we need to show them why they should adopt a more positive outlook.

Digitalising Manufacturing: Call to action

Dr Steven Barr, managing director of Hennik Edge, moderated day two of Digitalising Manufacturing 2017, the packed agenda of which involved tours of the Advanced Manufacturing Training Centre and a number of interactive workshops.

Steven Barr chairing The Manufacturer’s Annual Leaders Conference 2016 in Birmingham.
Dr Steven Barr, managing director, Hennik Edge.

Summing up day two, Barr noted: “With the publication of the Made Smarter Review, the opportunity and the vital necessity to digitalise manufacturing is firmly established.

“The UK has the opportunity to become a world leader in industrial digital technology (IDT), but without smarter making of things, UK manufacturing won’t significantly improve productivity, and without that we will become increasingly uncompetitive.

“Closing the opening day of the conference, Juergen Maier called for the UK manufacturing community to collaborate to make it happen – showcasing achievements, learning from experiences and working together to deliver this step-change in vision, attitudes and value.

“Inspired by the challenge, we looked more deeply in the second day at the key aspects of implementing the Made Smarter recommendations: skills, cyber security, interoperability, data analytics and business models and ecosystems.

We see the need for collaboration to overcome barriers and release potential even more clearly. Real, trusting engagement between otherwise diverse people and organisations absolutely does not ‘just happen’. We are playing a part by offering the secure private environment of The Manufacturer Collaboratory online, and in our leveraged networked expert advisory services.

It is both delightful and challenging that collaboration is a multi-faceted thing, connecting the stakeholders in our industry in different ways which could include:

  1. Government, major manufacturers and institutions, in the manner of the German ‘Mittelstand’, to set direction and encourage commitment.
  2. Customers, OEMs and suppliers to create integrated systems for agile and efficient operation.
  3. Manufacturers and digital companies who need to understand each other (with the help of intermediary trainers) to maximise the take-up of digital technologies aligned with manufacturing business value.
  4. Peer-to-peer, business-to-business sharing of best practice developed the hard way, the only way, through successes and failures.
  5. Compatibility of platforms, perhaps with common operating systems akin to Android, to ensure flexibility of solution development and boost confidence in investment.

“As Juergen noted, we are just starting on the journey of digitalising manufacturing. But the evidence of this conference is that we, the stakeholders of the UK manufacturing community, have the will to make it happen – smarter.”