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Process Innovation is the key to success for the UK’s Manufacturing Sector

17/11/17 Chris Forsyth Consultant, Manufacturing & Operations

Manufacturing leads the way when it comes to innovation in the UK. The sector performs 70% of business R&D nationwide and manufacturers’ spending on innovation is outpacing the trend for the economy as a whole. 
EEF, the voice of UK manufacturing and engineering produced the ‘Innovation Monitor’ which showed just how widespread innovative activity is: 95% of business respondents were engaged in some form of innovation in the last three years. Innovation is key to manufacturers’ success at home and overseas, and is seen as a critical part of their growth strategies.

First and foremost, innovation helps manufacturers do things better. Also, a majority of survey respondents said they innovate to satisfy existing customers (75%), to enhance margins on existing products and services (70%) or to develop existing markets domestically or overseas (60%).

Around half of manufacturers innovate to enter new export markets, while seeking new domestic markets is a driver of innovation activity for two-fifths of companies in our survey. Innovation is thus much more than new products and new markets. And as a result, the breadth and focus of manufacturers’ innovation activities has changed significantly in recent years.

In its seventh edition, EEF’s Innovation Monitor showed that companies are increasingly focussed on ‘process innovation’ as a way to boost productivity and competitiveness. In 2017, 61% of companies introduced process innovation in the past three years, up from around 20% in 2010. This share was also higher than that of companies introducing other forms of innovation in the past three years, reflecting manufacturers’ growing focus on process innovation activities.

Chris Forsyth, one of Redline Group’s Manufacturing & Operations Consultants,  discusses further: “Manufacturing is undergoing a transformation to the fourth industrial revolution (4IR) where the adoption of digital technologies could substantially boost productivity in the industry. The benefits of 4IR technology adoption for manufacturing will be widespread, with smarter supply chains, smarter production and smarter products. Process innovation could gear up manufacturers to this transformation alongside changing the roles of supply chain jobs and production jobs.”

“A common perception on process innovation is that it is about managing costs” says Chris. “Although reducing production costs comes on top of the outcomes that companies cited, process innovation achieves much more than that. The survey found that for more than two-thirds of businesses, process innovation had improved labour productivity, the flexibility and the profitability of their business. Supply chain benefits are also significant, as more than half of companies cited better customer relationships and improved lead times as key outcomes of process innovation.”

What is holding back cutting-edge process innovation for UK Manufacturing businesses?

Introducing new processes is not that easy. EEF’s survey highlighted a number of barriers to process innovation that could be undermining the pace of adopting cutting-edge processes and introducing new technologies. Barriers to Process Innovation include:-

  • Process innovation is more likely to be funded internally and manufacturers lack the funds within the business
  • Manufacturers are uncertain about the outcomes of process innovation, they underestimate what it involves and they do not know where to get information
  • Manufacturers over rely on internal expertise and 66% say staff with the right skills are too busy

Recommendations to ‘bridge the gap’

 “There is no downside to investment in process innovation” says Chris. “More than two-thirds of the survey respondents introducing process innovation in the past three years have seen an improvement in labour productivity, greater flexibility in production processes and a reduction in production costs and lead times. Companies also mentioned better customer relationships among the top outcomes of process innovation. The benefits in terms of firm productivity and supply chain efficiency that the adoption of modern manufacturing techniques could bring help spur the benefits of the 4th industrial revolution. Overall, there should be more information to demonstrate and promote the benefits of 4IR to UK manufacturing businesses.”

“The UK’s long tail of not-very-productive companies require more resources to be allocated to process innovation in order to enhance the adoption of new technologies and modern manufacturing techniques in Process, Control and Automation jobs. This should be supported by further employee training and essential management skills to bridge the skills gap.”

If you are a candidate and want to find out more about manufacturing jobs and careers in manufacturing and operations, or to see our latest job opportunities, click here or alternatively contact Chris Forsyth on 01582 878807 or email CForsyth@RedlineGroup.com