A new report from industrial systems integrator Austin Consultants challenges the narrative of decline in UK manufacturing and highlights how many manufacturers and manufacturing communities are thriving despite economic pressures. It also suggests that a digital divide has emerged in UK manufacturing over the last decade due to the adoption of new technologies.
The report, From Legacy to Lighthouse: Implementing Manufacturing’s Digital Transformation, highlights how larger manufacturers have raced ahead with transformation. It reveals that several UK regions with strong advanced manufacturing hubs have bucked the overall decline in manufacturing output and achieved growth in their manufacturing communities.
While official figures show an 8% real-term decrease in UK manufacturing output since 2014, Austin Consultants’ analysis highlights pockets of growth where adaptability and innovation have led to significant success in multiple areas of the manufacturing industry:
- Growth hotspots emerge: Four UK regions – Yorkshire & Humber, West Midlands, Northern Ireland, and Scotland – have achieved real-term growth in the turnover of their manufacturing economies over the last decade. While manufacturing employment has increased in each of these regions, factories in these areas have also achieved combined productivity improvements of between 9% and 25%.
- Thriving sectors: Five out of 16 main manufacturing sectors – food & beverage, medical, wood & paper, fabricated metal, and non-metallic mineral products – have experienced real-term growth in turnover since 2014. Most of these growth sectors have also boosted labour productivity, with manufacturers of non-metallic mineral products achieving the most significant improvements. Across this sector, manufacturers are now 32% more productive per worker than a decade ago.
- Productivity gains despite declining demand: The report also identifies sectors such as rubber & plastics, computer & electronics, and recorded media manufacturing that have achieved productivity improvements despite slowing demand, demonstrating manufacturers’ efforts to preserve margins.
- Digital transformation as a growth engine: Austin Consultants’ report links productivity gains to digital transformation initiatives, which have accelerated in recent years. The adoption of industrial IoT, robotics, and other technologies has enabled many manufacturers to achieve cost reductions, improve throughput and boost labour productivity by up to 30%.
- Overcoming barriers to digital adoption: The report highlights critical challenges to digital transformation, including legacy systems, high initial costs, ROI uncertainty, vendor lock-in, and data management issues, that limit manufacturers’ ability to adopt new technologies successfully. It outlines a pragmatic, problem-focused approach to help overcome these hurdles.
Chris Thoroughgood, Director at Austin Consultants, comments: “While the landscape for manufacturing is challenging, there’s a powerful story of resilience and growth, but also a digital divide between manufacturers making progress with technology and those struggling to transform. The manufacturing communities succeeding today are also hubs for advanced manufacturing, with multiple initiatives supporting innovation and growth, and although larger manufacturers have raced ahead with technology in the last decade, SMEs are now catching up.”
To download a copy of Austin Consultants’ report, From Legacy to Lighthouse: Implementing Manufacturing’s Digital Transformation, please visit www.austinconsultants.com/legacy-to-lighthouse-implementing-manufacturings-digital-transformation/.