The release of MakeUK’s most recent Manufacturing Outlook report suggests that sector optimism is rising. Fuelled in part by expectations of greater political stability, UK manufacturers are looking forward to a boost in their overall economic prospects in the new year.
Expectations of a manufacturing-led industrial strategy, and a generally more supportive policy environment, have led nearly six in ten UK manufacturers to believe in increased economic growth going forward. However, this does not mean the elimination of all sector challenges.
Digital Journal spoke with Paul Dearman, Head of Business Development at GTK, UK manufacturer of cable assemblies, connectors, displays and more, to provide five keys to success for managing your costs going into 2025.
Key #1: Invest in quality
Dearman explains: “At the moment, there’s cost pressures in every area. Currently, connector prices are on the rise, due to gold and copper prices, though energy costs can also make a big difference. Material and people costs have increased significantly recently, as have energy and property costs – so offsetting this in the right way is vital.”
He clarifies: “Cheaper isn’t always better, so be prepared to invest in quality. Buying cheaper materials may cause quality issues, which could hurt your business far more significantly in the long-run.
Dearman expands on this: “You might be surprised how significant the cost of quality can be for a manufacturer. Getting products built correctly by experienced professionals at the first time of asking is vital – reworks and recalls are expensive! Health and safety, compliance, quality, measurement activity; all these things are necessary hidden costs that should be viewed as a vital investment to avoid wastage and unnecessary reworking.”
Key #2: Use generic materials for flexibility
Dearman indicates: “If possible, avoid becoming tied to one specific manufacturer of materials or components. This way, you’ll be protected against unforeseen issues and impacts in your supply chain. Keeping materials as generic as possible protects your business against issues with lead times or obsolescence and avoids the need to pay for additional tooling if your build is forced to move to a new supplier.”
Dearman adds: “In order to achieve this, we recommend reviewing your build process. Taking a design-for-manufacture approach when designing a new product means repeatable volume builds, which is key to driving costs down. Reviewing an existing product’s bill of materials (BOM) may also allow you to reduce the per-build cost of an existing product, without compromising on quality.”
Key #3: Automate in the right areas
On the subject of transformative technology, Dearman provides: “Digital transformation is one of those topics that’s on the mind of most manufacturers. However, it’s becoming increasingly easy to fall into the trap of thinking that automated production will help your business become more efficient.”
Dearman continues: “Serious consideration needs to take place before investing in automation. For example, if you’re producing smaller batches of products, automating more of your production might not be the best decision.”
“Automation is most definitely not a one-size-fits-all remedy for rising costs – businesses must automate the things that are right for them. It might be that you could benefit more from automated data gathering and WIP tracking than actually increasing automation in your production line”, adds Dearman.
Key #4: Drive new data insights
Dearman notes: “We often consider the adage that ‘everything that gets measured gets managed.’ So, that means accuracy of reporting is absolutely vital. Inaccurate measurement of production efficiency and wastage inevitably leads to misdirected management time and effort spent addressing the wrong issues.
“Planning is everything, but without the proper data foundation, planning properly becomes far more difficult. Your business will have a far better chance at success in 2025 if you can rely on your data insights. With real-time visibility over inventory and material flow throughout the production process, you can limit downtime and pre-empt maintenance where required,” Dearman explains.
Key #5: Productionise your manufacturing process
To boost efficiency, Dearman propses: “We’ve found that one of the best ways to address rising costs is by adopting a flexible approach to manufacturing, one that will allow your business to fulfil orders of different sizes and with varying levels of customisation in different ways.”
Furthermore: “Productionising your manufacturing process for larger orders – optimising the processes required to systematically produce that order, with optimal use of the required resources and flex – means you can increase the efficiency of that order’s build.”
“Automated data collection, as mentioned above, will improve your business’s ability to tweak production processes. This will allow you to scale up or down without compromising on efficiency or production quality. Being able to adapt in line with changing demand will likely deliver a competitive advantage and allow your business to thrive in 2025″, Dearman concludes.
