Prior to the shutdown of the world’s economy triggered by coronavirus, UK manufacturers were already preparing to maintain productivity in readiness for an uncertain operating environment. Findings from the 2019 MHA Manufacturing and Engineering annual report1 reveals that 61% already had a Brexit strategy in place, 82% had re-engineered supply chains to reduce risk, and 55% had completed successful R&D claims. In addition to making their existing assets work harder, these firms were also taking action to protect cash, protect inventory levels, and control costs.
After the first lockdown, 99% of manufacturers are now open for business2. 54% expect it will take less than 12 months to return to normal trading conditions2 and 46% have achieved 75-100% of their pre-COVID-19 operating levels2. Fast forward a few months and UK manufacturers are not only planning for recovery, they’re also evaluating what new opportunities lie ahead.
The innovation imperative
Manufacturers know that thriving and surviving in a world that’s vulnerable to major macroeconomic events depends on thinking and working smarter. So it’s little wonder that many firms are preparing to reconfigure business models and factory floors – and embrace new robotics and connected Internet of Things (IoT) digital technologies that will deliver enhanced insights and agility to their operations.
Advancements in manufacturing technologies are already being deployed to power highly automated micro factories capable of producing high-mix, low volumes of customised products with a high return on investment. And that’s not the only innovation on the horizon.
Today’s technologies now make it possible to co-ordinate distributed production across multiple micro locations. Enabling manufacturers to serve a growing diversity of volatile and fast-evolving markets and cost-effectively balance any ebbs and flows of demand. And UK manufacturers look to stay future-ready:
- 81% of UK manufacturers say digital technologies will enable them to open up new markets and find new customers3.
- Digital transformation is a top 3 priority for over 90% of consumer goods manufacturers4.
- 91% of UK manufacturers believe technologies like smart automation, advanced data analytics, cloud computing, internet of things (IoT), augmented reality (AR) and artificial intelligence (AI) will boost productivity per employee4.
- 78% are developing (or have developed) a servitised business model that add value to customer relationships4.
But while digital technologies have the potential to transform development and production processes and streamline customer and supplier interactions, it also exposes the UK smart factory to complex new risks – including the threat of cyber attack.
Cybersecurity: a growing risk and concern for UK manufacturers
Cyber security is becoming a top concern5 for manufacturers who need to assure the availability of their manufacturing operations, protect intellectual property, and safeguard customer and supplier data. The growing convergence of IT and operational technology gives hackers an ever wider range of opportunities to launch attacks on industrial systems.
- Manufacturing topped the list of the most attacked sectors in the UK, accounting for almost one third of all cyber attacks directed at UK organisations6. According to Make UK, 27% of manufacturers that experienced a cyber attack suffered financial or business losses as a result7.
- Globally, reconnaissance activity was the most common attack type used against manufacturers (60%), followed by web application attacks (36%)6.
- In 2019 almost 50% of manufacturers were victims of cyber crime, with a quarter suffering some financial loss or business disruption as a result8.
- Cyber threat is holding companies back from investing in new technologies; worryingly, 12% admit they have no technical or managerial processes in place to even start assessing the real risk8.
Time for a fresh look at cyber in your business? Check out our cyber hub.
Managing risk and uncertainty in manufacturing
As manufacturers prepare to build back better, taking a proactive approach to risk mitigation will be the key to unlocking a more resilient and sustainable future. In an increasingly uncertain arena, where risks to supply chains and information security are escalating, informed decisions on managing risk and innovative manufacturing insurance solutions, can help generate long term competitive advantage.