🔗Just in time manufacturing is dead

Ok we admit, that subject line is a little clickbait-y but now we have your attention…

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.

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.

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.

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.

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:

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.

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!

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.

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 💙

Listen here: https://spoti.fi/3FA44As

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Copy editor: Bhavina Bharkhada, Make UK Head of Policy & Campaigns