News of the recent Tata Steel crisis has caused concern, with many people believing the UKs manufacturing industry is in decline. However, figures suggest the industry has a bright future and will continue to contribute enormously to the UKs growing economy.
The recent Tata Steel crisis highlighted the need for manufacturers to manage operations effectively. Tata said that it was “deeply concerned” at the deteriorating financial performance of its UK subsidiary in the last year, stating that its plant at Port Talbot has been losing £1 million a day for a while and Tata said it had suffered “asset impairment” of more than £2 billion in the last five years.
This shows how vital it is for manufacturing companies to have complete sight of their operation, to have the required data available to react to changes in the market and to remain agile in order to implement new strategies quickly. Competition is fierce which requires manufacturers to constantly evaluate operational efficiency, business strategies and processes, performance, while encouraging innovation.
To ensure the security and longevity of steel manufacturing in particular, investment firm Greybull Capital, have agreed to buy Tata’s long products business in a bid to revive the British Steel brand. As explained on theguardian.co.uk this could be vital to the UKs economy, “The British Constructional Steelwork Association (BCSA), which represents companies using steel in construction and engineering products, said the structural steel market is expected to grow by 4% this year.”
Some figures suggest production in the manufacturing industry is in decline, but do not take into consideration the changes in which the industry is measured. As explained on TheManufacturer.com, “Although the contribution of manufacturing to GDP has declined on paper, many of the services provided to manufacturers which would have once been considered part of manufacturing, such as catering; cleaning; building services, security and so on, are now allocated into different areas of the economy.”
In fact, manufacturing contributes £6.7 trillion to the global economy. Some may believe the industry is weakening, yet, manufacturing makes up 11% of UK GVA (Gross Value Added), 54% of UK exports and employs 2.6 million people. What’s more, according to a recent report from the Office for National Statistics (ONS) it’s grown by 1.4% each year since 1948. The ONS attribute this sustained growth to a more skilled workforce; a shift in production from low to high productivity goods and improvements in automation and ICT.
According to manufacturing statistics, investment in ICT continues to be a main focus, with 61% of manufacturers explaining they’ll be spending more on it this year. 25% expect to implement ERP software solution, and 16% aim to upgrade their IT infrastructure, in a bid to revolutionise, stabilise and grow the industry further.
To help manufacturers realise their full potential, we’ve put together the following information here >>>
For more information, download the annual manufacturing report 2016 here.