How new product and technological innovation is fuelling the growth of British manufacturing in a global market.
Captialising on the Latest Trends and Developments
Britain has a wealth of technical skills and knowledge and a strong history of innovation. And, if recent reports are anything to go by, British manufacturing firms are planning to capitalise on these strengths more so than at any other time in the past few years.
The recent EEF/NatWest Innovation Monitor report found that 71% of companies are planning to invest in innovation to export to new markets in the next three years with 73% of companies plan to bring new products to market in the next three years.
By harnessing employees’ technical abilities, and by developing strong research and development capabilities, manufacturers can use innovation to achieve a unique competitive position to help drive demand both in here the UK and globally to ensure export growth.
Manufacture ImageManufacturers are also keen to deploy innovation internally to reduce waste and improve efficiency in an effort to curb the rising costs associated with managing a UK-based operation. One example cited is “platforming” – which is a methodology aimed at producing products that share physical attributes so a production line can make as many products or components as possible. This type of innovation if successful will allow UK manufacturers to be competitive at large production volumes – something we normally associate with manufacturing in the Far East.
Need for Speed
One area that remains a challenge for British manufacturers is the speed of innovation. The Innovation Monitor report revealed that 75% of respondents think speed to market is more important than it was in the past, but that speed of innovation remains a top concern. Innovation is a difficult process, which requires significant resources and expertise. And selling into new markets has heightened some of the challenges that manufacturers face, particularly the need to deliver innovations quickly.
The need for speed emanates from the fact that product lifecycles are shorter. Competition from previously low cost manufacturing bases has started to intensify, with companies in these countries increasing their own levels of innovation in order to move up the value chain. As these competitors start to innovate more so the product lifecycles is shortened as technical edge is lost to other, newer ideas.
In summarising the need for speed Richard Halstead, a regional director at EEF, said “Speed is a key challenge for manufacturers because of the increased global competition and the demand from consumers for constantly evolving products. The number of countries now entering the global market has forced manufacturers into ever faster turnaround in developing new products which differentiate them from their competitors. Additionally some environmental legislation, the scarcity of raw materials and the demands of major customers in the aerospace and automotive sectors are all forcing companies to think faster on their feet. The boredom threshold of consumers also means that people are becoming conditioned to think in terms of having the latest product on a more regular basis (think mobile phones for example). All of the above means that product cycles which might previously have been decades or a number of years can often be measured in far shorter periods”.
Unfortunately innovating quickly proves to be a real challenge for companies. Innovation is a complex process with many obstacles that can hinder the speed of developing innovations. The EEF report suggests that many manufacturers are concerned about their performance. They say “Only 25% of manufacturers said their performance was good or excellent [in terms of speed of innovation], while 30% of companies said they thought their performance was poor, reflecting the ongoing challenge of hitting the moving target of customers’ demands and technological improvements from competitors”.
Addressing the Challenge
Given that speed is represents such a major challenge for manufacturers, it makes sense to deploy tools and technologies that can help speed up the innovation process – from idea to finished product. Solutions such as SAP can help manufacturers right across the product development lifecycle. SAP Business All-in-One, for example, supports the key processes for managing ideas, gathering requirements, and sourcing for suppliers, as well as a central structure for cost collection and documentation management. Transparent bill-of-materials (BOM) handling and product data management functions help turn a product specification into an engineering BOM that can be copied to create the production BOM. As a result, companies can launch innovative products quickly and cost effectively.
There are other, indirect, areas in which software solutions can help. Solutions for Human Capital Management (something we’ll explore in a later article) can help to improve activities such as workforce productivity and performance – two areas which can positively impact the speed of innovation. And analytics can give you much deeper insight into a range of key performance indicators that can help inform your business planning in order take advantage of any emerging trends.
To find out more about how Invenio helps manufacturers use technology to increase the chances of success in today’s hypercompetitive global market contact us.