Manufacturing reflections on 2023

Posted on 7 Dec 2023 by The Manufacturer

With Brexit, the pandemic and the war in Ukraine continuing to impact vulnerable supply chains, 2023 has been a rough ride. Luke Smoothy, Founder and CEO of London-based manufacturing specialist Get It Made, reflects on the past year in the sector, with some positive takeaways.

Let’s not be under any delusions: it’s been a tough year for many, not least the manufacturing sector. As we stagger towards the end of 2023, we’ve seen a decline in new orders for five months running, with a drop in export demand amid weak demand from abroad. Rising energy and fuel costs, combined with sky-high inflation, have compounded the misery throughout the year; however, if there’s one thing the industry has learned over time it’s that, despite hardship, we are resilient.

So while the stagnant UK economy remains far from rosy, there are still enough positive murmurings from the past 12 months to remain cheerful as we head into 2024. The good news is that according to the latest S&P Global / CIPS UK Manufacturing PMI, the UK manufacturing industry downturn eased in November, with industry potentially turning a corner as the end of the year approaches. Yet more encouragingly, business confidence edged higher in November, with 53% of manufacturers saying they expect production to increase over the next 12 months.

Increased investment

The case for optimism has also been fueled by The Chancellor’s pledge in his Autumn Statement to pump £4.5bn pounds of investment into key manufacturing industries, a substantial portion of which is earmarked for the automotive industry in order to facilitate the transition to zero emission vehicles. Aerospace and clean energy will also benefit from a chunk of this, as will connected and automated mobility (CAM) which has been allocated up to £150m.

This year’s Advanced Manufacturing Plan, as laid out by The Department for Business & Trade, has also been welcomed, as it cites the UK as a global hub for advanced manufacturing, alongside its ambition for the UK to be the best place in the world to start and grow a manufacturing business. The plan lays out its intention to prioritise investing in the long-term future of manufacturing (as announced in the Autumn Statement), co-operate internationally and build supply chain resilience, while also reducing costs and removing barriers to boost competitiveness.

The rise in digital adoption

It wouldn’t be a stretch to solely focus on the doom and gloom of the last year, but let’s not overlook the leaps and bounds we’re making in technological advancement. Digital transformation has swept the manufacturing industry this year, as we start to grasp its potential. While we’ve only just scratched the surface in terms of its capabilities, more businesses in the sector must embrace it in order to help secure their competitive edge, and that’s what I believe we will see more of in 2024.

AI and automation are making their influence known, as seen in a survey revealing the increasing inseparability between AI and manufacturing, with 83% of manufacturers viewing smart factories as pivotal to success. Seventy-four percent of the manufacturers polled were using or planning to implement artificial intelligence, although what is apparent is that we are still in the relative early stages of adoption, reflected in the fact that 57% of manufacturers are still piloting or experimenting with AI.

Manufacturers are embracing automation and disruptive technologies at a breakneck pace, which will be essential in solving the productivity puzzle. However, more work needs to be done to catch up with our rivals, particularly in the case of SMEs, which experience greater difficulty implementing digital technology. They will be reliant on more support in helping them achieve step changes on their automation journey.

This difficulty has been made apparent in another report, where manufacturers have cited a number of barriers which threaten to scupper their efforts to adopt automation, with almost half (46%) pointing to a lack of technical skills as one issue. Others include integration and data challenges (41%), high costs (38%) and negative workplace culture (36%).

Following an independent review commissioned by the UK government, Made Smarter was created to ensure leading SMEs across the manufacturing sector can benefit and prosper from digital tools and innovation. This programme has been designed to help businesses leverage technologies to streamline their processes to become faster, and more responsive and efficient.

Ultimately, it will help make better products for less. Some key industry figures are calling for the government to roll out the scheme across the UK as a solution for manufacturers to overcome the barriers they’ve highlighted. Yet, manufacturers also have an opportunity and responsibility themselves to take control in bridging the gap. Technologies are now widely available, affordable and come with a typically fast ROI, which all support manufacturers in an increasingly difficult competitive environment.

Eyes on the future

While there have been many ongoing challenges to navigate around this past year, the opportunity afforded by automated technologies, not to mention other fast evolving innovative manufacturing methods such as 3D printing, means we are at the precipice of something revolutionary, even extraordinary.

The game-changing prospects for the industry are as positive as they are huge and its longer-term gains are poised to leave a bigger imprint than this current economic slump. As 2024 beckons, there are plenty of reasons to keep hopeful for an industry that will weather this storm, emerging from it more resilient and primed to face a brighter future.

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