Small and medium-sized manufacturing businesses in the UK have the worst record for responding to new business opportunities, with a lack of available skilled workers highlighted as a potential cause.
These are some of the findings of a global research study commissioned by business software provider, Exact that compares how SMEs in different countries stack up against each other when it comes to technology adoption.
The Exact 2015 SME Cloud Barometer – an independent research study of almost 3,000 SME leaders across the UK, the US, France, Germany, the Netherlands and Belgium – shows 14% of UK manufacturers failed to respond to all Request for Proposals on time, compared to a global average of 11%.
That equates to as much as £24.7bn in extra revenue that UK manufacturers are potentially missing out on.
The research suggests staffing levels potentially lie at the root of that problem, with results showing the biggest challenge for UK manufacturers is finding skilled technical staff (43% – compared to a global average of 32%).
That headache is followed by one of having to ensure their material and processing costs are accurate (37%), and then of ensuring invoices are paid on time and product innovation initiatives are being optimised (both at 34%).
At a time when the UK sector has seen a number of high-profile closures, the ramifications of not finding enough skilled workers among SME businesses to meet demand is particularly poignant; more than a quarter (27%) of UK manufacturers who took part said late delivery on a project would result in losing that customer.
The issue of ensuring orders do get delivered on time appears to be exacerbated by a change in demand put on manufacturers – in particular a switch away from large bulk orders towards a growing trend for smaller ones.
More than half (51%) of UK SME manufacturers said customers are increasingly requesting orders in “smaller series”, although not as much as France where 61% said that is now the case.
This too presents challenges for UK businesses owners – top of which is trying to keep costs down (57%), followed by then getting the price right (48%).
In terms of addressing some of the challenges, 64% of UK manufacturers believe technology holds the key and is going to have a major impact on the competitive landscape.
Many that have adopted technology solutions – particularly online solutions – are already feeling the benefits; the research shows SMEs who are ‘heavy users’ of cloud software (defined as having three or more different cloud products in place) achieved far higher revenue growth and more than double the profit of those using fewer cloud products.
It also shows that technology can have a dramatic effect on efficiency levels. Among UK SME manufacturers, those who have adopted online business software solutions have saved on average six hours a month on financial administration – a considerable reduction given that the UK industry average is 11 hours per month on such tasks.
CEO of Exact, Erik van der Meijden commented: “There is little doubt the UK manufacturing sector is facing some tough challenges, but with those come opportunities.
“To take advantage SMEs need to ensure they are competitive, efficient and provide the very best in customer service. This research highlights that one of the most effective ways of doing that is through technology adoption – whether that’s to improve production processes, keep tighter controls over stock or reduce time spent on non-productive administrative tasks – time that could be spent on maintaining and winning new business.”