James Sopwith, group strategic account director at adi Group, discusses the operational strategies manufacturers can employ to shore up their partners needs and increase their supply chain resilience durability in times of crisis.
A smart supply chain approach
Like many industries, manufacturing wasn’t immune to the crippling operational effects of COVID-19, with output declining by 6.6% between February and October 2020.
While deemed a key industry to continue amidst workplace shutdowns, it was inevitable that lofty client ambitions of large-scale CAPEX projects, planned developments and aggressive expansions would halt in place of serving more essential needs.
But with another lockdown bringing yet more uncertainty to the table, counterbalanced against a growing a need for the economy to get back on its feet, we’d argue that now is the time for manufacturers to act fast, learn from last year and shore up shop to ensure their operations can boost client prospects in difficult times.
The engineering industry, as a vital cog in the manufacturing support network, owes to itself an examination of its own failings in this respect, long before COVID-19 arrived on the scene.
We’ve always found that the industry has been mistakenly focused on a disjointed, niche delivery model, with one specialist firm passing control of a client’s needs to another, in turn holding back manufacturers and creating needless inefficiencies and frictions.
When the virus reared its ugly head, these factors became only ever more apparent, as contractors, cutting costs or managing staff numbers amidst social distancing guidelines, pulled out of projects through deliverable uncertainty, leaving large gaps in the supply chain and the onset of costly delays for manufacturers nationwide.
The real power then, is in transformational change or, in the absence of this, relying on companies who can self-deliver the projects they take on, as well as having big purchasing power, with enough variation in the supply chain to cover a multitude of sectors and industries.
By doing so, manufacturers can reduce risk and gain control over project continuity and more importantly, ownership.
Home grown mentality
In establishing an economic fightback, approach is key, but certain sectors are deemed most critical for leading Britain’s recovery. In November, the Prime Minister announced the largest military investment in British defence in 30 years, with £16.5bn to be spent over four years into the UK armed forces.
With defence spending having seen production take place overseas for many years, it is pleasing to see this now return closer to home.
Just last month for example, it was announced that £1.5bn would go into military research, including for the Future Combat Air System – a futuristic fighter aircraft concept bringing together the best in British manufacturing, including BAE Systems and Rolls-Royce. Creating hundreds of jobs in the Lancashire region, including apprenticeships, the project is a strong representation of economic ingenuity and UK skills development.
In general, this notion of on-shore manufacturing spans a breadth of industries.
The government’s need for a low-carbon economy has been well publicised in recent times, and with manufacturing being directly responsible for 16.5% of the UK’s overall energy demand, there is a clear opportunity for manufacturers to reduce wastage and lead from the front when it comes to alternative power sources.
In July, we announced a new partnership that is set to give manufacturing businesses across all sectors this sort of opportunity. Collaborating with Onsite Energy Projects, our concept is fairly simple – take the immense amount of heat energy from gas-fired CHP power plants, which would usually go to waste, and harness it within a manufacturer’s own processes
The model is further enhanced by providing off balance sheet funding, allowing the client a CAPEX free solution to their upcoming energy needs, whilst also reducing their carbon footprint.
Training, not reskilling
In boosting the UK’s manufacturing resilience, it has perhaps never been more important to bring more people into the engineering sector. While it may be a difficult time for young people to make their way onto the careers ladder, I would encourage businesses of all shapes and sizes to do what they can by taking on young apprentices.
These will be the people that will engineer our future, and rather than looking to other practices such as reskilling our workforces to meet COVID-inflicted demands, a concerted push on getting young people ready for the world of work should still retain our focus.
Our proposition, the pre-apprentice scheme, aims to deliver just that, mentoring 14–16-year-olds in valuable core engineering skills in a real working environment. Making current workers more mobile in their abilities may help plug short-term gaps, but we’ll be facing a real long-term crisis if headway isn’t made to fill the 1.8m shortfall of new engineers and technicians needed by 2025.
Manufacturers have faced unprecedented challenges across 2020 and there’s no doubt that further difficulties lie ahead. However, by making smart choices in supply chain partnerships, businesses can place themselves in a strong position to futureproof their project management deliverables and resiliency across a variety of sectors and industries.
James Sopwith is group strategic account director at adi Group