Growing your manufacturing company 6.8 times more than the average
A recent report by The Markit, in conjunction with CIPS made for grim reading for members of the manufacturing sector. It found that whilst the sector did return to growth in May, that growth was poor.
Bad news, yes, though there is a silver lining for manufacturing businesses if they are willing to invest in people, technology and research.
There has been a shift in recent years from physical products to technologies that are entirely focused on the consumer. These technologies can be to the liking of any consumer, in turn, creating challenges for the manufacturing sector to keep up with demands that change and grow at a rapid rate.
The key is to prepare and create strategies that enable you to not only beat your competition but the market as a whole.
Investing in research
There are several components to such strategies that will ensure success. One example being the use and application of research and development - through this, businesses can create a sustainable and secure platform for outperforming. Despite 94 percent of manufacturers claiming that they undertake some form of R&D, most feel that they are not doing enough.
This is reflected in the national figures, with just 1 percent of Britain’s GDP being spent on R&D - half of what our German cousins spend, which seems to be working for them. Recent results found that a surge in investment in Germany lead to the fastest growth the country has had in two years.
Manufacturing companies don’t invest in R&D because they see it as a short term drag on profits but also because it’s difficult to measure ROI. Algorithms such as a Research Quotient, developed by Anne Marie-Knott at Washington University, enables manufacturing companies to analyse and measure how impactful an increase in R&D investment is for a business in the long term.
So whilst it seems daunting to make the first step - the proof is in the pudding.
Manufacturing is expanding and becoming a major component of economies across the world. BRIC countries (Brazil, Russia, India and China) are now becoming aware of the importance of R&D and its central link to growth. The knock-on effect for British manufacturing is the broadening of horizons in the form of increased demand by these emerging economies.
Product customisation is seemingly an open goal for British manufacturers to become a world leader in. The natural compromise between cheap goods benefitting from economies of scale and custom made expensive items has began to erode following the emergence of new technologies such as green production and additive manufacturing.
The University of Loughborough found that customers might be prepared to pay up to 10 percent more for personalised products indicating a real desire for that personal touch. The use of emerging technologies through investment has the power to create great opportunities for manufacturers to grow.
So with this in mind, manufacturers must learn to embrace new technologies. PwC described in a recent report that manufacturing was undergoing a ‘technological renaissance that is transforming the look, systems, and processes of the modern factory’ because of processes like advanced robotics and augmented reality.
Without investment in people and skills, manufacturing has little chance of growing to its desired rate. The stagnation we have seen in this sector is partly down to the skills gap we have in Britain - a 2015 report by the recruitment group Hays, found that economic growth is under threat due to a lack of skilled workers both in training and arriving from the EU. This ‘could blight hopes that Britain can overcome years of dire productivity performance, potentially denting its economic expansion in future.’ OECD (Organisation of Economic Cooperation & Development) research further enforces this in its forecast that by 2020 the UK will fall to 28th out of 33 countries.
How do you do it?
Talent is out there and in order to attract them, your company needs a manufacturing marketing strategy. Here’s a few pointers in the right direction:
Step 1. Map out your skills gaps, considering your core areas that are in need of attention. Here you’ll be able to determine the types of people required.
Step 2. Make sure you have a smart responsive website that acts more as a hub rather than a megaphone.
Step 3. Using this information, tailor your content and marketing messages to appeal to these personas.
Acquiring more talents lends itself nicely to an increased sales pipeline, as you now have the stability and skills to take on more projects that can be delivered on time and with quality as the main driver.
Things may look cloudy at the moment. However, with expertly crafted inward marketing strategies to attract and retain new talent, it’s possible that your business can get ahead of the competition. Taking that brave step towards disrupting a currently cautious manufacturing sector, there is a genuine opportunity for your business to grab this industry with both hands and reverse the stagnant trend.
For a more detailed look at the current climate of manufacturing and how your business can leverage societal advancements to grow 6.8x times faster than the national average, download our free report The Top UK Manufacturing Challenges of 2016
Joe Birkedale is Managing Director at Catalyst