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UK manufacturers see digital transformation with connected technology and tools as key to increase productivity in production and compete on the world stage.
With more than three-quarters of manufacturers increasing their spending on digital technologies, a new survey from Make UK has found that 25% are still at the conception stage of their digital transformation, 50% are implementing changes derived from data insights into their production, while a further 8% are reaping the benefits from their digital evolution to their profits and productivity.
This comes on the back of companies spending on average between £50,000 to £500,000 on new digital technologies, with 80% of manufacturers expecting to increase their spending over the next two years. With most expecting a correlating increase in productivity of 63%.
The Benefits of Digital Adoption
Nearly half of businesses are adopting new digital technologies in their manufacturing. Areas for this adoption include manufacturing processes, marketing, product design, finance, and equipment maintenance.
And the results show that 67% of respondents to Make UK’s surveys have found past investments in digital technologies has helped increase their resiliency, with 58% finding an increase in speed and production capabilities, and 63% finding an overall increase in productivity in their manufacturing.
This mirrors some of the top goals most manufacturers have for adopting digital technologies, including:
• Increased Production Flexibility (32%)
• Labour Efficiency (31%)
• And Improved Profitability (27%)
And while job sustainability is always a concern with the adoption of new digital technologies, 37% of manufacturers have seen an increase in job opportunities with automation.
But the biggest benefit of the digital transformation is productivity, with two-fifths of manufacturers seeing gains in productivity from the adoption of new digital technologies.
Some of these gains come from technologies like Manufacturing Execution Systems (MES), Robotics, and Cloud computing.
While advanced planning and scheduling applications are seen as the most important technologies for increasing productivity with 85% of manufacturers.
But topping the list of productivity gains is Cyber Security. In their 2021 survey, Make UK found 63% of manufacturing companies reported losses. This has led to Cyber Attacks deterring 1 in 8 manufacturers from adopting digital technologies.
Still, while between the pandemic and Brexit, there have many challenges to digital adoption in the past two years, 78% of manufacturers have actually seen an increase in productivity in that time.
This directly reflects spending on digital technologies, with an increase in spending leading to a correlating increase in productivity.
The Future of Digital Adoption
Most manufacturers have only replaced up to 10% of their manufacturing processes with new digital technologies, while fewer have reached between 11% and 50%.
But in the next 2 years, many companies plan to replace up to 75% with new digital technologies.
To achieve this, 7 in 10 manufacturers are prioritising investment in digital skills for their employees. These skills include areas like:
• Software Management
• Cyber Security
• Data Analysis
Three-quarters of manufacturers see the demand for these skills increasing between now and 2030.
This highlights one of the barriers to digital adoption manufacturers face, barriers that also include company culture, data compatibility, and cyber security.
In fact, 36% of manufacturers won’t adopt digital technologies because of both the expense and the complexity.
Make UK stresses the need for government investments in R&D to help mitigate some of these barriers, while the UK government aims to spend “2.4% of GDP on R&D by 2025.”
On the manufacturers’ side, they would like this investment to go to such things as extending R&D tax credits to include capital, increasing grant funding, and increasing annual investment allowance.
But between awareness and compatibility, many manufacturers just can’t access many tax relief or other types of schemes to help with their investment in digital adoption.
And even after embracing digital technologies, manufacturers still face barriers to optimising their investments, with 33% citing a lack of technical skills and the high cost of introducing new technologies as the main challenges to their growth and productivity.
Ultimately, manufacturers have a clear course forward, one that depends on the lessons already learned in their digital transformation.
From having a plan with small steps to maintaining the skills and expertise on site, manufacturers have many lessons to help guide them in their digital adoption.
Though there can be challenges which impede digital transformation, such as, company culture, skills development, and cyber security, UK manufacturers who embrace digital technologies see increases in productivity, labour efficiency, and profits.
Manufacturers who do manage to modernise their systems and production processes will see themselves in the optimal position to remain competitive on the world stage.