MANUFACTURERS FACE ONGOING PRESSURE TO CUT COSTS O H


ello readers and


welcome to the July/August issue of Irish Manufacturing. This morning news has


broken that a Northampton sandwich factory has had almost 300 employees test positive for Covid-19. What is going wrong in factories that we keep seeing these outbreaks? Are they too relaxed on social distancing or are they not being temperature tested when entering the work place? Or is it just simply impossible to control in these environments? If you have any news, stories,


comments or opinions, or are interested in contributing to our September issue, please feel free to email me on rtucker@datateam.co.uk. For now stay safe and take care.


Rachel Tucker - Editor  


ne in three (33 per cent) of senior decision- makers at mid-market discrete manufacturers


identified ‘rising costs of raw materials and components’ among their two main economic challenges over the next three years, while just under a quarter (22 per cent) highlighted ‘rising costs of shipping goods’. That’s according to a recent independent study commissioned by advanced technology solutions and services provider, delaware. In light of this, it is unsurprising that 26 per cent of


the sample referenced ‘reducing operating costs’ among the top operational challenges they are facing in their supply chain, ahead of getting products or services to market faster (22 per cent) and improving product quality (21 per cent). Cost is a challenge even in streamlining manufacturing operations. 39 per cent reference it among their top two, ahead of employee training (22 per cent) and regulatory restrictions (21 per cent). The need for enhanced management and control of costs is, of course, being brought into ever- sharper focus by the ongoing COVID-19 pandemic. “Keeping costs down across their operations is an


overriding concern for every manufacturer in these uncertain times,” said Richard Seel, managing director (UK & US) at delaware. “In our survey, more than a quarter (28 per cent) reference that ‘labour costs have risen’ as an impact of company-implemented or regulatory driven sustainability requirements on their supply chain. In addition, 38 per cent of respondents


identified that rising cost prices will be one of the biggest impacts of Brexit on the supply chain. “Added to this, spending cuts and much tighter cost


management will be an inevitable and pragmatic response to the virus outbreak,” continued Seel, “as manufacturers look at ways in which they can improve the bottom line. Yet, the pandemic is set to have a far- reaching, long-term impact on the manufacturing sector, so manufacturers will also need to look at how digital transformation and the use of the latest advanced technologies can keep costs under control over the longer term.” That’s why it is positive that cost reduction is widely


regarded as a driver of innovation by the survey sample. Nearly half of the survey sample (47 per cent) ranked it among their top two reasons for why they wanted to innovate or make changes to their organisation. According to Seel: “Implementing innovative


technologies is increasingly seen as a way to reduce costs by businesses today and that is going to be crucial in the pandemic recovery. Just under a third (31 per cent) of our sample referenced that the perception is that these technologies will improve productivity, while 24 per cent said the perception is that they will reduce costs. “The potential of innovation to drive operational


efficiencies is clearly there but it is important that manufacturers make the right technology choice as the economy continues the process of recovering from the virus,” he added. “ERP and EAM offer a positive route forward in this regard.”


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