Manufacturers must innovate and extend their operations to include service offerings as well as production if they are to survive the downturn, according to the Advanced Institute of Management Research (AIM).
The High Value Manufacturing report, first published in print last November, is now available online, for free. It is backed by the Technology Strategy Board and used consultations with likes of Rolls-Royce, Airbus UK and BERR in its formulation.
The report describes ‘high value manufacturers’ as those that “do not compete primarily on cost. Instead they deliver value …by contracting for capability, delivering product/service innovation, establishing process excellence, achieving high brand recognition and/or contributing to a sustainable society.”
It says that while enough research and development has been put into products and manufacturing processes, not enough has been allocated to service systems and global value systems and these two areas should now be afforded manufacturers’ focus. It suggests a range of areas that it says needs to be addressed for the future health of UK manufacturing. These cover specific areas inside the realms of skills, technology adoption and the development of service strategies.
“The face of the UK manufacturing industry is undergoing a period of substantial change,” said AIM deputy director, Professor Andy Neely. “With competition from developing markets in Asia and Eastern Europe only going to intensify in coming years, UK manufacturers simply cannot rely on the quality of products ‘you can drop on your toe’ anymore. Ever increasing numbers of manufacturing firms are putting emphasis on the services they provide, challenging traditional ideas about just what product is.”
AIM is funded by the Economic & Social Research Council (ESRC) which itself is funded mostly by the Department for Innovation, Universities and Skills (DIUS).
To read the report, click here.