UK Manufacturing: The Productivity Puzzle
The summer months saw a “lacklustre” performance in the UK’s manufacturing sector. Output and new orders slowed and we saw the first contraction in export business since 2016, according to IHS’s latest PMI report. The findings also suggested manufacturing production rose at the slowest pace in 17 months in August, as growth of new order inflows eased to its weakest during the current 25-month sequence of expansion.
The figures speak for themselves, but is the UK suffering from a perception problem surrounding the efficiency of the sector? Productivity is the main driver of long-term economic growth and higher living standards, and yet, according to recent research there is a gross disparity between perceived and actual productivity.
The findings highlighted that amongst senior decision makers in the manufacturing sector, over 80% rate stock checking, collaborating on cross-departmental projects and submitting expenses as efficient, yet 85% also admit to wasting up to 10 hours per week on administrative tasks. So, what’s driving these misconceptions?
Perception Vs. Reality
Identifying the source of the manufacturing productivity slump is the first hurdle. In particular, whether the slump is a manufacturing-specific problem, or part of a broader UK slowdown.
According to the Chartered Institute for Personnel and Development, the UK-wide decline in efficiency is driven by poor management practices, and insufficient investment in upskilling the workforce. The level of investment and ambition, they say, “particularly relating to skills and how they are used in the workplace, is inadequate, given the scale of the productivity challenge facing the UK.”
There’s research that appears to support these claims, particularly in relation to the manufacturing industry. When we surveyed senior decision makers in the UK, we found that 33% of business leaders in manufacturing would spend more time on personal training if they could, whereas only 24% would spend more time on training of their team. Similarly, 41% would spend more time on strategy and planning, and only 28% on team-building exercises. Which all suggests that business leaders are forgetting the importance of attending to the workforce.
This could be because there’s a disconnect between business leaders’ perception of productivity, and the perception of their employees, which perhaps more closely reflects the reality of the situation. After all, employees are likely to have a more accurate idea of how productive they are, and whether they have the right tools to get the job done. Business leaders need to look to their employees for guidance on how to boost their productivity and ensure they address any concerns.
It is not necessarily a case of simply throwing money at a problem and hoping it sticks, but rather of redirecting existing funds towards cultivating a productive workforce, and weaning out poor management practices.
Another key factor preventing manufacturers achieving maximum productivity is a reliance on outdated legacy systems, or worse, no systems at all (only spreadsheets). By not updating their technological arsenal with the latest cloud-based ERP and business management solutions, manufacturers are missing out on a real-time view of what’s happening, alerts of bottlenecks and preventive operations, and a secure architecture to house their data. For example, with the rise of the Internet of Things, connected devices are generating huge amounts of data that legacy systems aren’t equipped to house and analyse.
Today’s technologies are bridging the communication gap between the shop floor, back end, and planning and control systems, by forming an arterial route through which information can travel instantaneously, between the links of the supply chain. Manufacturers looking to take advantage of these benefits need to have the right systems in place that allow them to do so.
So, why are manufacturers not upgrading? Some common concerns are: the cost of digital transformation and profit loss during transition downtime; fears surrounding the transition from on-site data servers to cloud-based storage; and uncertainty about maintaining business continuity when working from mobile devices. Thoughts of implementing a complex new system with an unpredictable implementation phase coupled with data concerns, are preventing many manufacturers from taking the leap.
Figures indicate that these attitudes must change, and sooner rather than later. 70% of C-Level executives in manufacturing spend 5-10 hours per week on administrative tasks, a number which could be reduced by having the right technology in place. UK manufacturers must set aside their worries and say goodbye to their beloved (yet defunct) spreadsheets. The latest technologies will drive productivity, and streamline inefficient administrative processes, thereby saving funds spent on wasted staff-hours and reinvigorating productivity.
Conclusion: The Puzzle Unpacked
Evidence suggests that senior decision makers are overestimating productivity, and neglecting the importance of upskilling their workforce. In the current climate, with British business at a crucial juncture ahead of an exit from the EU, parity must be achieved between perceived and actual productivity. It is clear that administrative processes in manufacturing require streamlining, both in order to alleviate current issues, and to safeguard the industry against economic uncertainties ahead.
Inefficiencies are the product of a reliance on outdated legacy software, and that’s having an impact across the supply chain. Managers tired of this would be wise to seek advice from an IT consultant about how best to implement a modern cloud-based solution, which affords real-time analytics and flexibility. The success of digital transformation hinges largely on the efficiency with which a company can communicate IoT data from the plant floor to the boardroom. So, in order to shake the current productivity slump, manufacturers must embrace new technologies, but also ensure that this is backed up by a commitment to breeding a work culture in which real-time, transparent communication up and down the supply chain is the priority.
By Andres Richter, CEO of Priority Software - https://www.priority-software.com/
Siemens: Providing the First Industrial 5G Router
Across a number of industry sectors, there’s a growing need for both local wireless connectivity and remote access to machines and plants. In both of these cases, communication is, more often than not, over a long distance. Public wireless data networks can be used to enable this connectivity, both nationally and internationally, which makes the new 5G network mainframe an absolutely vital element of remote access and remote servicing solutions as we move into the interconnected age.
Siemens Enables 5G IIoT
The eagerly awaited Scalance MUM856-1, Siemens’ very first industrial 5G router, is officially available to organisations. The device has the ability to connect all local industrial applications to the public 5G, 4G (LTE), and 3G (UMTS) mobile wireless networks ─ allowing companies to embrace the long-awaited Industrial Internet of Things (IIoT).
The router can be used to remotely monitor and service plants, machines, as well as control elements and other industrial devices via a public 5G network ─ flexibly and with high data rates. Something that has been in incredibly high demand after being teased by the leading network providers for years.
Scalance MUM856-1 at a Glance
- Scalance MUM856-1 connects local industrial applications to public 5G, 4G, and 3G mobile wireless networks
- The router supports future-oriented applications such as remote access via public 5G networks or the connection of mobile devices such as automated guided vehicles in industry
- A robust version in IP65 housing for use outside the control cabinet
- Prototypes of Siemens 5G infrastructure for private networks already in use at several sites
“To ensure the powerful connection of Ethernet-based subnetworks and automation devices, the Scalance MUM856-1 supports Release 15 of the 5G standard. The device offers high bandwidths of up to 1000 Mbps for the downlink and up to 500 Mbps for the uplink – providing high data rates for data-intensive applications such as the remote implementation of firmware updates. Thanks to IPv6 support, the devices can also be implemented in modern communication networks.
Various security functions are included to monitor data traffic and protect against unauthorised access: for example, an integrated firewall and authentication of communication devices and encryption of data transmission via VPN. If there is no available 5G network, the device switches automatically to 4G or 3G networks. The first release version of the router has an EU radio license; other versions with different licenses are in preparation. With the Sinema Remote Connect management platform for VPN connections, users can access remote plants or machines easily and securely – even if they are integrated in other networks. The software also offers easy management and autoconfiguration of the devices,” Siemens said.
Preparing for a 5G-oriented Future
Siemens has announced that the new router can also be integrated into private 5G networks. This means that the Scalance MUM856-1 is, essentially, future-proofed when it comes to 5G adaptability; it supports future-oriented applications, including ‘mobile robots in manufacturing, autonomous vehicles in logistics or augmented reality applications for service technicians.’
And, for use on sites where conditions are a little harsher, Siemens has given the router robust IP65 housing ─ it’s “dust tight”, waterproof, and immersion-proofed.
The first release version of the router has an EU radio license; other versions with different licenses are in preparation. “With the Sinema Remote Connect management platform for VPN connections, users can access remote plants or machines easily and securely – even if they are integrated in other networks. The software also offers easy management and auto-configuration of the devices,” Siemens added.