Santander’s Manufacturing Forum: Creating the partnerships of the future

For many manufacturing businesses in the UK, today’s operating environment is one of the most challenging they have ever faced.

The uncertainty around Britain’s future trading relationship with both its European neighbours and countries around the world has made it very difficult for firms to plan for the future or make long-term investment decisions.

At the same time, a shortage of skilled labour – in particular among businesses outside of the top tier of manufacturers – has been exacerbated by Brexit-related uncertainty and the potential impact it can have on skills available from the EU.

These challenges are far from the whole story for companies in the sector: there are also considerable opportunities for ambitious businesses to grasp – whether by taking a proactive approach to expanding into new international markets, by investing in new technology to help improve processes and productivity levels, or through developing deeper, mutually beneficial partnerships with customers or suppliers.

Analysing the most urgent issues

It was with these challenges and opportunities in mind that last year Santander launched the Manufacturing Sector Ambassador Forum; a series of events bringing together business owners and industry representatives to highlight and discuss the most pressing issues facing firms today.

“The Forums are also designed to identify areas where manufacturers would benefit from external support and guidance,” says Paul Brooks, UK Head of Manufacturing at Santander Corporate & Commercial.

“The sector faces considerable headwinds, but there are also a number of opportunities for firms, especially when it comes to international trade, investing in new technology, and developing new ways to collaborate with the companies in their supply chains.”

The most recent Manufacturing Forum took place in central London in January. Participants included representatives from industry bodies such as EEF, ADS (the trade organisation representing the aerospace, defence, security and space industries in the UK) and Manufacturing Northern Ireland, as well as company directors.

Cross-border trade and Brexit

Many of the topics under discussion at the start of this year were similar to those addressed at the inaugural Forum last summer: there is still no certainty around what type of trading relationship the UK will have with the remaining 27 EU member states when the UK leaves the EU in March 2019.

That said, a number of issues related to Brexit have come into sharper focus in recent months.

For example, attendees at the Forum discussed the potential impact of a new hard customs border between Northern Ireland and the Republic of Ireland – as well as what the UK’s departure from the Customs Union could mean for manufacturers in sectors such as automotive.

Participants expressed the need to ensure key stakeholders understand the complexities of today’s automotive supply chains, with some vehicle components likely to cross The Channel several times during the production process.

Participants reiterated that businesses across the industry urgently need some certainty about the transitional arrangements, which are expected to be put in place after end of March 2019.

Automation, productivity and new technology

The Manufacturing Forum attendees agreed that technological advances such as automation have a key role to play in boosting productivity levels among the UK’s manufacturers.

For now, however, smaller firms tend to be more reluctant to embrace such innovation and would benefit considerably from advice on how to invest in productivity improvements in a cost-effective way.

Cyber security risks are another reason for some businesses to be wary of developments such as the Internet of Things (IoT) – but participants felt that sensible management of these risks is a far more appropriate and sustainable long-term approach than a refusal to engage with the technology, given the competitive disadvantage that would result.

Skills and schools

It is clear there are no quick fixes when it comes to addressing the UK’s skills gap in engineering and manufacturing. Nevertheless, the Forum considered what can be done to arrest the long-term decline in young people choosing careers in the industry.

Attendees agreed that the most successful approach is likely to involve a mixture of education and public relations aimed not just at school pupils and students, but also their parents and teachers.

Manufacturing careers have a considerable amount to offer, from travel opportunities and excellent working facilities to the chance to join the sector’s workforce straight from school – but, the industry needs to find a way to share these messages much more effectively.

Collaboration and new business models

The Forum also discussed the growing levels of collaboration among the increasingly specialised companies in the manufacturing sector.

Participants pointed out that it is now quite normal for firms that might have been seen as fierce competitors just a few years ago to be working together in some way to make the most of their relative strengths.

This approach is reflected in the growth of servicing business models, which have given manufacturers the opportunity to deepen their relationships with customers while allowing them to create new and potentially more dependable revenue streams.

The value of partnerships

Helping businesses in the manufacturing industry work together to maximise their potential is one of the most crucial elements of Santander’s support for its customers in the sector.

As a truly global bank, this assistance isn’t limited to making connections between UK-based firms. For example, the Santander Trade Club (available to Santander clients), gives businesses the opportunity to team up with up to five million possible trading partners in markets across the globe.

“The Manufacturing Forum is a great way for Santander to engage with the sector and get a real insight into the issues which are of greatest concern to manufacturing businesses,” adds Brooks.

“While we will use this knowledge to offer as much support as we can, we recognise it is just as important for us to make it as easy as possible for our customers to create fruitful, long-term partnerships with likeminded businesses, whether they are in the UK or overseas.”

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