UK manufacturers call for an industry makeover

The 'Manufacturing Success' report, issued by SAP (UK) Limited at the Manufacturing Innovation Forum indicates that UK manufacturers are welcoming of change, with 82% citing innovation as the most important driver of business growth in 2013 and beyond.

In addition to positive sentiments towards change and innovation, the report found that two-thirds (66%) expect to see UK sales increasing this year ahead of 2012 levels, whilst 38% say the same for export sales. The optimistic attitude is underpinned by the recognition of specific opportunities to drive business growth over the next 12 months including expansion into new markets with existing product ranges (55%) and creating new products, primarily for domestic markets (45%).

Despite these positive findings, the industry cites several challenges which could impact its ability to drive innovation; most notably 40% of companies surveyed are only able to plan one year ahead, whilst one in ten can only plan six months in advance. This is particularly the case for SMEs (50%) rather than enterprises (29%).

The independent industry report, commissioned by SAP, of 200 business decision makers from UK manufacturers explores the appetite and capabilities for growth, focusing on four key areas: innovation, money and finance, technology and management. The survey results demonstrate the extent to which these areas are being exploited by UK manufacturers and their overall impact on achieving business success.

Key findings of the report include:

• 77% of UK manufacturers say the industry needs to improve its image in order to attract recruits, whilst seven in ten think it's necessary to attract more funding
• The three challenges most likely to impede organisational growth are the continued economic downturn (54%), fluctuation in demand (33%) and skills shortages (28%)
• Four out of five UK manufacturers cite technology as being integral to their business success in the next 12 months – however the convergence of social media, big data, cloud and mobile present a particular challenge in 2013 (29%)
• Partnerships within the value chain (32%) are seen as the innovation that will yield the biggest impact on organisational performance
• 83% think that the Government could do more to support UK manufacturing

John Hammann, Industry Principal, Manufacturing at SAP (UK) Limited said: "Recent economic hardship has provided the manufacturing industry with a drive to change perceptions and position itself as a more innovative, appealing sector in which to work."

41% claimed that the economic climate was the top driver of innovation, while changing customer demands and increasing sales came equally further down the list, 34%.

Hammann concludes, "Central to the impetus for change is that manufacturing is no longer just about producing exports and outputs for the economy, but rather it now involves a complex network of interrelated producers, innovators and services. The network is becoming bigger and more diverse and global in nature. Identifying and responding to the challenges and opportunities the joined-up manufacturing world presents is critical if companies are to achieve success. Investment in innovation to drive business growth and position manufacturing as an exciting and transformational sector in which to work with plenty of opportunity for new and existing talent; SAP intends to help manufacturers of all size achieve this."