Manufacturing crisis: What we can learn from Redcar’s closure

 

Manufacturing crisis: What we can learn from Redcar’s closure By kapoklog

Manufacturing industries contribute a phenomenal £6.7tr to the global economy, but the UK still lags behind in international prominence, currently positioned 11th in the largest manufacturing nations in the world.

This year has proven to be a year in which UK manufacturing has stagnated further. We’ve recently seen the slowing growth in Europe, strong Pound and additional outlay in the living wage negatively impact UK manufacturers, meaning they’re failing to offer much input into the wider economic recovery.

The recent news that Redcar Steel Plant is to close is testament to these challenges, and marks another sad chapter in the UK’s manufacturing sector, and of course the ramifications for the Teeside community are far reaching. Much of the attention for the reasons why the plant ultimately proved unviable focuses on these external factors, as the UK manufacturing sector continues to grapple with macro-economic trends which it has little control. The global price of steel, cheap Chinese imports and access to raw materials are three examples of this. There has also been criticism of the government for failing to act to minimise the impact of these factors and help to keep the plant competitive.

Whilst these are all valid points, UK manufacturing organisations must also continue to look internally and review their own procedures, processes and business planning capabilities to ensure they are as efficient and lean as possible. The deployment of business analytics and planning software should be a central component of this. In today’s complex global environment organisations need to future-proof operations by implementing technology that can; better manage R&D spend, improve visibility through integrated planning and enhance customer service through better use of data and analytics.

There will always be external factors that will attack a business. But, with a transparent end-to-end view of the organisation and its supply chain, businesses can have a clearer view of their operations and finances. This transparency combined with an intelligent use of technology can help manufacturers develop more accurate modelling to understand what the impact of external factors will be and what proactive steps can be taken. Increasing the time and investment in getting this right wil help prevent more closures like the one we have seen on Teeside.

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