manufacturing roundtable 35


and reshoring work, Arnott suggested it was because the UK was globally seen as an ’innovation centre’, particularly the Solent region with its good R&D base and many high-tech manufacturers.


“They are very good at copying, but they lack the innovation side,“ agreed Steele while mentioning concerns over Far East quality standards.


Price recalled the millennial years rush to low-cost manufacturing. “But an awful lot is now coming back onshore, particularly from the Far East and involving niche manufacturing.“ Client demand for order flexibility and speed of supply was one key reason. “You can’t do that when you have to ship it from China.“


Campkin explained that Thomas Sanderson was part of the €2.8 billion Hunter Douglas Group which had business worldwide in 143 countries. “We have seen resourcing to China, but a lot is now coming back into Europe – those things that really depend on quality are coming back. If you want something bespoke, that differentiates, you can’t get it out there.


“Innovation and development has stayed in Europe and the US; commodity and component manufacture is staying out in the Far East, but the assembly of it is beginning to come back because that’s


Do we support innovation and R&D enough?


In GDP terms the UK spent only half what South Korea spends on R&D, the Roundtable heard.


Arnott pointed out that the manufacturing sector was actually responsible for 70% of UK R&D spend.


Ironically, only 30% of


manufacturing businesses were claiming R&D tax credits.


Some South Korean R&D spend would be in this country, so the UK would gain and the statistics were misleading, argued Campkin.


Langley noted that the need for innovation was driven by clients, customers, and commercial competition – plus modern consumer desires for change, improvement and increasingly tailor-made products. “If more resource centres were provided enabling people to learn R&D skillsets, helping people to become innovative blue- sky thinkers, and take their innovation to market, it would have a massive impact on the industry.“


Campkin: “Funding for R&D is an issue. By nature it is risky and who can afford to fund something that might not come to fruition? And, the world has changed, it’s now full of lots of little companies and where will they get such funding?“


White: “As a bank we have continued to support businesses that have visibility of profit and cashflow sustainability, and are robust with strong management teams. That hasn’t changed in recent years. Are we more stringent in our credit process, and do we look at some of those risky opportunities under a finer microscope? Then probably yes.


Nigel Campkin where you can control quality.


“In order to deliver on our customer expectations we have to be in full control of the process.“


White highlighted that only part of the production process was returning – with front-end innovation and CAD design and back-end specialist assembly and marketing largely being reshored for UK expertise.


Arnott detailed four main drivers for manufacturing reshoring: quality of products, certainty of delivery; delivery lead-time and innovation.


Without control of those facets, might it be ’curtains for the shutter industry’, one Roundtable colleague jokingly suggested to window stylings expert Campkin.


“R&D is always a tough decision because by definition it is a riskier part of business and can range from a quasi-equity stage or diversification into a different avenue. Could we do more to support it? I’m sure we could, but our biggest challenge at the moment is lending money to the right businesses.“


How do we help drive greater productivity . . .


Comparing national productivity levels could result in misleading statistics, the Roundtable agreed, while noting that individual manufacturers were keen to improve their own productivity – conversion of their inputs into useful outputs – because that led to profit.


Arnott said the 2015 MHA Manufacturing Report had revealed most companies were adopting lean production strategies, reducing waste and boosting internal efficiency throughout their businesses to improve their productivity. Underlying


THE BUSINESS MAGAZINE – SOLENT & SOUTH CENTRAL – DECEMBER 15/JANUARY 16


Antony White


their lean activities was the aim to offset increased production costs without raising prices for customers. Market competition was such that absorbing higher production costs was the only option.


Arnott: “The biggest change that most businesses are seeing is turnover growth. Turnover is still growing, but they just can’t increase their prices.“


Automation might be one way to progress productivity suggested Sachpekidis, but Arnott and Campkin pointed out that developing, building, installing and maintaining that automation would require manufacturing too. “It just moves people from making the widgets, to making the automation that makes the widgets.“


Langley felt too many UK companies were wary of wasting time and money, and fearful of being seen to fail – a very British trait.


UK businesses had fallen into a cautious post-recession mindset, suggested Campkin and needed to re-discover how to think creatively and be more commercially aggressive – “to fail faster, learn and move on.“


Wright agreed that more business needed to dare to be different from the market consensus.


The Roundtable heard that the UK was good at producing entrepreneurs, but not so great at training them to be business leaders.“


Wise entrepreneurs recognised their limitations and hired leaders or gained professional business advice, said Walker.


Arnott agreed: “One person can’t do everything successfully.


If you don’t know


how to do something, you need to get in the right people who do.“


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