Changing UK manufacturing for good
WMG’s Prof Jan Godsell and Kings College London’s Chris White, share their views
A study conducted at WMG, revealed that many firms did not respond dynamically to the disruption caused by COVID-19. Flexibility is imperative to future manufacturing strategies to ensure supply of critical items such as food, pharmaceuticals and even toilet roll! Prof Jan Godsell, explains that there are two types of manufacturing supply chain flexibility: “Dynamic flexibility is the ability for the supply chain to respond to upturns and downturns in demand, using a current network. For example, the food and drink network proved to be flexible in catering for increased demand due to recent panic buying – much can be learnt from companies such as Aldi, Lidl and McDonalds which have shown great resilience”.
Structural flexibility is when demand is created beyond our expectations. We have seen this during COVID-19 for things like PPE and ventilators. This means making new supply networks to meet new demands.
Chris White, Director of the Institute for Industrial Strategy at King’s College London, signalled the challenge we have ahead. “A small number of UK manufacturing industries have spent months producing PPE for a handful of customers, not least of course, the NHS,” Chris explains. “Now, as we come out of lockdown, there will be tens of thousands of companies requiring PPE, with potentially thousands of suppliers producing it.”
An important element in reaching demand will be a dedicated resource to co-ordinate the network, such as the recent co-ordination of the ventilator challenge by the High Value Manufacturing (HVM) Catapult. Jan adds: “The challenge is that many networks are created in an ad hoc way and it is like a relay race where everyone just assumes the baton will get handed on. What can happen in this situation, is a problem occurring in one part of the supply chain will go undetected, until it’s too late. Having a dedicated resource, with a view of the entire network helps to avoid this.”
Over the past 30 years, the UK has single-sourced a lot of products from the Far East, which has limited our structural flexibility, especially for local manufacture and supply. Chris says: “This desire to acquire cheap, mass-produced goods from overseas has been a risky route to take. Post-COVID 19, companies will look more to the domestic market for their production, and with the added challenges, and opportunities, associated with Brexit, the UK will need to show increasing levels of resilience over the coming months and years.”
To achieve flexible manufacturing, it is important for UK companies to consider what assets they have in their network. Jan explains: “We need to start thinking more broadly. Historically, we may have thought about where we locate our factories, but we also need to consider where we locate our warehouses. The logistics of moving parts and goods can cost more than the manufacturing of a product. We need to be able to remanufacture, repair and redistribute products globally, regionally, locally and even personally.”
Jan urges: “We need to rethink the UK’s manufacturing footprint and establish a range of manufacturing facilities with capability to produce a range of different products.”
Jan believes that distributed manufacturing supply chains, with individual connected machines will be the future. She says “connected regions such as the West Midlands, will be thought of as factories without walls and the ‘regional factory’ will make decisions not just on cost, but on social and environmental impact. Regions will compete on economies of scope not scale, with the ability to make many customised products, possibly produced in a batch size of one.”
Chris says: “Further devolution, specifically in a regional sense, will encourage increased localised manufacturing, as will investment in skills and innovation. We need to revive popular initiatives such as the Manufacturing Advisory Service (MAS) to give a clearer steer and better support to UK manufacturers.”
There are reasons to be optimistic, over the past 12 years the UK’s position has remained pretty stable as the ninth largest manufacturer in the world. Chris adds: “Manufacturing is part of our national heritage. And now, more than there has been for some time, there are a welcome range of possibilities to strategically re-shore manufacturing back to the UK.”
Chris White, Director, Institute for Industrial Strategy, King's College London
Professor Jan Godsell, Professor of Operations and Supply Chain Strategy, WMG