Manufacturing tech: Britain leads where America lags

Recent research assessing how far manufacturing businesses in North America, Europe and Australia have progressed in adopting new technologies suggests the UK may be about to leapfrog its way to fifth place in global manufacturing.

A survey carried out by IDG, on behalf of cloud management solutions supplier Sage, quizzed 658 discrete manufacturing businesses operating in the USA, Canada, UK, France, Germany and Australia. The results reveal what factors are influencing change in the different countries and how advanced their manufacturing sectors are in adopting new processes and thinking.

Interestingly, the report (although focused mainly on UK progress) indicates that Australian companies are on a par in many respects with those in the UK and Europe, while North American firms tend to lag.

‘Discrete Manufacturing in a Changing World’ reports that adopting circular economy and servitisation (using services to drive growth) strategies are considered a critical part of driving new revenue and profitability.

Virtually all British companies (96%) that took part said they have felt the impact of green manufacturing trends, with 79% having already adopted circular economy techniques designed to eliminate waste and recycle existing resources. For Australian companies surveyed, that figure was 65%, while in North America it was only 47%. The vast majority in the UK see the circular economy as a net benefit to their organisations both from a brand reputation and a profitability perspective. However, 65% said they face undertaking substantial transformation to take advantage of it, especially in adapting supply chain practices and balancing sustainability with the bottom line.

Three-quarters of the UK firms surveyed are in the middle of such a transformation. Many said they are working on driving down waste in the supply chain and using data to better understand consumer demand, as well as adopting more environmentally friendly practices and creating new operational efficiencies. While only 2% claimed they already have a fully functioning circular economy business model, a further 16% believe they have nearly completed the transition.

The report also found that 66% of companies impacted by green manufacturing trends are pursuing a servitisation strategy, expanding their product lines to incorporate a portfolio of additional services and solutions. Similarly, 71% of Australian manufacturers surveyed had the same response, 66% of EMEA firms, but only 28% of North American firms.

The research also provides an indication of how advanced the different nations’ manufacturing sectors are in adopting ‘Fourth Industrial Revolution’ technologies such as artificial intelligence, the Internet of Things, 3D printing and robotics. Sage believes progress is being made quickly enough in the UK to suggest that the country could move from its current position as the world’s eighth-largest manufacturing nation in the world to fifth place over the next 12 months.

“While it’s unsurprising that sustainability is a challenge, it’s very encouraging to see how British manufacturers have embraced the disruption and looked at new models, including the circular economy and servitisation, for growth,” said Rob Sinfield, Sage’s Vice-President of Product.

“That said, the sector must overcome a sense of inertia, outdated business models and technology, and a lack of IT infrastructure to capitalise on the window of opportunity.

“IT modernisation is a critical component in making the most of the new industry dynamics. Using data more effectively will enable them to be more agile in the way they source, design, make and recycle their products.”

Interestingly, Australia, EMEA and the UK are also very similar in the adoption of cloud computing. 49% of UK respondents say they use cloud-based ERP, while in Australia it is 56%, with only 8% keeping it in-house. This is a stark contrast with North America, where 28% remains in-house. However, 34% of North America companies are “starting to investigate cloud technologies”, while in Australia it’s only 6%.

Overall, the report would indicate that Australian manufacturing’s progress is on a par with its UK and European counterparts, while the North Americans — despite their huge manufacturing industry — remain more conservative and slower to adapt.

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