Recent years we have seen the world undergo a significant period of change and uncertainty. It has seen momentous transformations politically, and experienced high levels of economic turbulence. Technology has advanced to the point where science fiction ideas such as Tony Stark’s J.A.R.V.I.S. are becoming a reality with the development of voice assistants such as Amazon’s Alexa and Apple’s Siri becoming more sophisticated. We are now accelerating towards an apex.
Despite these dramatic changes, one industry that appears to be going from strength to strength is manufacturing, which has been reporting a steady growth this past year. In fact, this month, the Office of National Statistics reported UK manufacturing figures to be at their highest in a decade, following seven consecutive months of growth, and emphasising a promising future for the sector.
What goes up must come down – or does it?
The growth in British manufacturing is currently being fuelled by two key trends – a weak currency and global demand. Recently, the Sterling’s fall in value has led to UK exports being more competitive. In addition, the three main markets of global growth – the US, China and Western Europe are all strongly performing at the same time. The industry is having to deal with factors outside of their business models, from security threats, machine learning and artificial intelligence and the Internet of Things (IoT). Whilst these emerging technologies, may not seemingly be related to manufacturing, there’s no denying these will significantly impact their businesses – and soon.
How can the industry therefore ensure that we continue this wave of positivity? In a bright period, now is the time to ramp up our support to manufacturers across the UK to secure success for the year ahead. This is where new technologies come into play, opening up a manufacturers’ business to new revenue opportunities whilst helping to continue the sector’s growth.
Prepare for disruption
As industries become more disrupted by new players and technologies evolve and advance, it is inevitable that the manufacturing industry will, in turn, be affected. In fact, our recent research found that 90% of manufacturers believe their sector will transform fundamentally by 2021. What’s more, a further 40% believe their business will not exist in its current form by then thanks to technology.
Whilst digital disruption has been tarred with a negative brush for businesses, manufacturers should actually be looking at it as an opportunity, and readying themselves by looking at how they can adapt their business models from now.
Digital disruption for manufacturers has the ability to transform the business processes as well as business models and revenue streams. Although still in its infancy in the manufacturing world, we are beginning to see the emergence of new business models as a result.
Take Rolls Royce for instance. The company now sells ‘power by the hour’, rather than the engine itself, whilst Tesla encompasses solar, storage, transport and charging point in its business model. Both have revolutionised the manufacturing industry. As well as ensuring that manufacturers provide the opportunity to increase revenue, these new business functionalities also ensure the entire service a customer needs (such as spares parts, maintenance, expertise) is delivered in one, unified manner, creating ease and convenience for both the manufacturer and ultimately, the customer.
Don’t fear new developments
With any revolution, there is always an element of the unknown, and uncertainty around the outcome. If at the beginning of the nineteenth century the UK’s factory owners had listened to the fears and demands of the Luddites who actively destroyed machinery, for fear of it stealing their jobs, we never would have undergone the first Industrial Revolution. We never would have had Spinning Jennys in the textile industry, or James Watt’s steam engine if we had been too afraid to innovate – and where would we be now without such inventions?
The same can be said for the fourth industrial revolution we are experiencing now.
Instead of looking at these new developments with fear, manufacturers should embrace and use them as an opportunity to adapt their businesses and fuel growth instead. As 3D printing, for instance, becomes more sophisticated, it can open up new revenue streams for manufacturers, who can sell the service of spare part replacements via 3D printing services, adding a new string to their bow.
Get ready for digital
If the industry is to continue to see growth in the coming months and years, manufacturers must be ready for the impact that digital will inevitably bring. This means integrating digital into their business plans, from their operations through to their workforce, who will ultimately support it. The manufacturers that are agile in this fast-paced digital landscape will ultimately be the ones who are able to spur the industry forward and be around for years to come.