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Tony Hague, CEO of PP Control & Automation (PP C&A), takes a look at how industry will start to recover from the impact of Covid-19 and explores why the UK needs to take greater control of its own destiny.
Before the current Covid-19 global pandemic and before the word ‘Brexit’ had even been ‘conceived’, the vast majority of UK manufacturers were bemoaning that productivity levels had never recovered from the 2008 recession.
The Government was being slaughtered for stagnating GDP growth, there was a constant negative conversation about how lack of skills was hampering growth and economic commentators were gleefully pumping out the UK’s fairly appalling rate of investment in automation and robotics to anyone who would listen or print it.
We all took a collective shake of our heads at the poor balance of trade and moaned about it.
Then we had the referendum and Brexit was born, quickly followed by a General Election, political chaos and Covid-19 that has sent the economy spiralling down at a rate that makes 2008/09 look like a ‘blip’! Oh, and we’ve still got Brexit to come!
Every Western institution was unprepared for the pandemic, it’s as simple as that. Part of the problem was clearly foresight and a distinct failure of imagination. However, the other and more telling issue is what we didn’t ‘do’ in advance and what we’re failing to ‘do’ now…that is a failure of action and specifically our widespread inability to ‘build’.
This is glaringly obvious today with the things we urgently need, but don’t have or can’t get quickly.
We don’t have enough coronavirus tests or test material, amazingly including cotton swabs and common reagents. We don’t have enough ventilators, negative pressure rooms, and ICU beds and we don’t have enough surgical masks, eye shields and medical gowns.
There are also limited therapies or a vaccine, despite years of advance warning about bat-borne coronaviruses. Our wonderful scientists will hopefully invent solutions for these, but, even then, we may not have the manufacturing factories required to scale their production as quickly as we need it.
We could have these things, but we chose not to. Specifically, we chose not to have the mechanisms, the factories, the systems to make these things and we chose not to ‘build’.
You see it in manufacturing. Why has so much production been offshored to places with cheaper manual labour? In the UK, we know how to build highly automated factories and there is little doubt this approach would create lots of higher paying jobs, raising UK productivity to the levels we crave.
Better still, gleaming state-of-the-art factories are capable of producing every conceivable kind of product at the highest levels of quality and at a competitive price, exactly the type of key goods we offshored and are now trying to secure.
Reshoring activities could create huge and sustainable wealth for the UK economy; it won’t be easy, but now is the perfect time for full throttle, unapologetic and uncompromising political support for aggressive investment in new products, in new industries and in new factories.
Just imagine the fiscal impact of a ‘percentage swing’ of business from current offshore suppliers to UK-based subcontract companies, who are more than adept at supplying automotive, aerospace, medical or the renewables sectors for example.
We have fantastic companies who can machine or fabricate parts, produce plastic mouldings, electronics, castings, forgings, electrical assemblies, cable harnesses and engine components of all shapes, sizes and descriptions…so what holds us back?
In some cases, the UK simply does not have the volume of viable suppliers in these sectors. A good example would be certain types of castings, with so many foundries closing down over the years due to a combination of regulatory requirements and energy prices that simply made them uncompetitive. Regrettably, their former sites are now the home of another supermarket, retail park or housing complex – a crying shame.
There are lots of other sectors where the capabilities and the supply chain already exist, but they do require investment in order to offer the capacity, agility and competitiveness required in a global economy.
This leads us nicely back to automation and robotics – note, I am trying not to use the phrase Industry 4.0, which has simply created additional confusion and misinterpretation of what automation is all about.
UK manufacturing simply has no choice but to invest and invest heavily if we wish to have a long-term sustainable model.
So why have we been so slow to invest?
Apathy – accepting the ‘status quo’ and being happy to utilise low cost manual labour
Misunderstanding – of what automation is all about and what it can achieve, particularly at a SME level. I’ve lost track of the number of times I’ve heard firms say it’s not relevant to us
Mis-selling – of automation by the majority of resellers, who are more concerned about maximising their project sales value than exploring the optimum solution for the client. This results in poor results, a disappointing Return on Investment (ROI) and further ‘switches off’ individuals when it comes to future considerations around automation and robotics
Finance – access to the right type of finance for automation and the way we look to depreciate capital assets over a relatively short period of time compared to other nations. There is too much of a focus around ‘impact on the ‘books’.
I’m sure there are many more reasons and you may think I am oversimplifying a complex subject and perhaps I am. However, whether you agree with my thoughts or not, you simply can’t argue with the fact that if investment and adoption of automation within manufacturing was a physical ‘race’, we came out of the blocks late and are running at a slower pace than other runners!
In a post Covid-19 and Brexit landscape, UK manufacturing is at a crossroads. We can either continue to moan about our misfortune, criticise the Government and run scared of the new norm or we can unite, collaborate and invest in the opportunities that will present themselves.
The aim should be to create an agile and competitive supply chain model that supports an aggressive reshoring strategy, which, in turn, provides productivity and GDP growth. This will rebalance trade and ensure that our sons, daughters and generations to come have a robust economy that funds and fuels lifestyle and prosperity.
Be bold, believe and build. I’m off to clean my rose-tinted spectacles now, it’s time for #UKMfgUnite
PP Control & Automation is a founding member of UK Manufacturing Unite (#UkMfgUnite), a new initiative designed to build UK industrial capability and increase reshoring.
Created and run by manufacturers for manufacturers, the already 35-strong movement is urging more firms to come together to collaborate, share practice and find practical solutions for developing domestic supply chains.
In its first few weeks, the initiative has secured orders worth £625,000 and is now aiming to hit 100 members by the end of June.
The not-for-profit #UkMfgUnite concept is open primarily to all manufacturers regardless of size, sector or specialism. More information can be found here.