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🔗Just in time manufacturing is dead

Manufacturing Mondays
Manufacturing Mondays
Ok we admit, that subject line is a little clickbait-y but now we have your attention…
It is true that manufacturing supply chains have undergone a transformation following Brexit and the pandemic.
For decades manufacturers have used increased globalisation and supply chains to drive efficiency and create lean manufacturing processes which have helped them grow and remain competitive.
However, the economic shocks of the last few years have created a perfect storm which has turned these models upside down and forced companies to re-evaluate their business strategies and seek suppliers much closer to home.
In today’s issue of Manufacturing Mondays, we run you through the key findings of our new report in partnership with Infor - what the change in global supply chains means for UK manufacturing, and what Government could do to build resilience into our critical supply chains.
Happy Monday!

Global supply chains
Our new research in partnership with Infor on global supply chains finds that ‘just in time’ manufacturing is being replaced by ‘just in case’ as volatility becomes the norm and companies increase suppliers close to home.
Make UK / Infor: Building resilient supply chains, May 2022
Make UK / Infor: Building resilient supply chains, May 2022
We find the biggest disruptors in the last two years were:
  • the pandemic with 93% of companies saying it had caused some form of disruption (for 47% the impact was catastrophic or major)
  • followed by exiting the EU for 87% (for 32% it was catastrophic or major)
  • over half of companies also said the Suez Canal incident had caused disruption, even though it was blocked for only a week, highlighting the dependence on Far East supply chains.
But what about reshoring?
Well, over two-fifths of companies (42%) have increased their UK supply base (for almost a fifth it is a significant re-routing) with over a quarter increasing supply from Western Europe, including Turkey.
🇬🇧 This trend is set to accelerate with over two-fifths of companies (43%) saying they expect to increase UK suppliers in the next two years, with a quarter predicting an increase in suppliers from Western Europe and Turkey.
By contrast, over the same period 12% of companies say they intend to reduce suppliers from the Far East.
👩‍💻 Digital technology is playing an important role
Our research also found that manufacturers are planning to significantly increase their spend on digital supply chain technologies with over two-fifths of companies (42%) planning to increase their investment by more than 10% in the next two years.
And it’s because so many are seeing benefits - in fact for those companies who do increase their investment in supply chain technologies, the benefits are clear:
  • faster response times;
  • lower inventory costs;
  • greater operational efficiency; and
  • greater cash flow.
Make UK / Infor: Building resilient supply chains, May 2022
Make UK / Infor: Building resilient supply chains, May 2022
So what next?
Major economic and geopolitical shocks seem to becoming more and more frequent. Given the likelihood of increased volatility for trading networks being normal in the future, we’re calling on Government to help ensure the UK economy is in a much stronger position to respond to any future disruptive events.
🗝 Specifically, we call on Government to establish a cross-industry and Government resilience taskforce
Read more and our other recommendations to Government here.
A business-lite Queen's Speech
It’s fair to say that while we’re sure manufacturers would have welcomed some elements of last week’s Queen’s Speech - the Energy and Levelling-Up Bills - but it was probably more notable as much for what it didn’t contain which would indicate that political priorities took centre stage.
Energy Security Bill: A welcome announcement which matches manufacturers’ ambition of increased faster, production of clean energy. Also good to see the Bill include elements of security of supply not just those of energy cost control and reduction.
Levelling Up and Regeneration Bill: This is an important step to bridging the gap between ambition and change. However, the acid test for manufacturers will be how quickly it delivers the demonstrative real-world change manufacturers are seeking.
🏡 Housing Reform: This was a missed opportunity to set in stone the role of Modular housing as an integral pillar of reforms. Too often existing planning prejudices poor quality traditional building methods over high-quality precision engineered modular homes.
💷 Procurement Bill: Did you know 9 in 10 manufacturers said winning public procurement contracts is difficult! No surprise then that the Procurement Bill will hopefully make it more accessible for new entrants, in particular SMEs, to access these opportunities and contracts.
No Employment Bill: Businesses will be frustrated that, yet again, three years after having promised it there was no Employment Bill. This is a major omission given how fast the world of work is changing, a trend accelerated by the pandemic.
Ps. The timing of the Review into the future of work was interesting was it!
Mental health matters
Last week was #MentalHealthAwarenessWeek so to support the sector, we released a podcast series on the mental health pandemic we are seeing, why it is so crucial to focus on it, and what manufacturers can do to support their staff.
Make UK Mental Heath podcast series, 2022
Make UK Mental Heath podcast series, 2022
If you haven’t already, have a listen. A big thanks to all those that contributed, Minister for Disabled People, Health and Work, Chloe Smith MP, Enginuity, Laura McBrown, RNLI, HSE and Make UK’s very own Andrew Ward 💙
We 💚 policy and manufacturing, so let’s talk:
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Copy editor: Bhavina Bharkhada, Make UK Head of Policy & Campaigns
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Manufacturing Mondays
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