Over the decades manufacturers have overcome numerous challenges to remain a key part of the UK economy. In recent months, they have again stepped up to support the country through COVID-19, be it through the ventilator challenge, switching production to manufacture PPE or working at full tilt to restock supermarket shelves.

COVID-19 is creating significant disruption for manufacturers and this is clearly reflected in our Q2 Make UK/BDO Manufacturing Outlook survey results. In stark contrast to the confidence and investment highs we saw in Q1, these have sharply dropped along with output and orders – falling to levels comparable to the financial crisis.

Manufacturers have been forced to change the way they operate – from addressing sudden changes in demand, reconfiguring their factory floors to ensure staff safety, to sourcing new suppliers due to disruptions in global supply chains. All this has meant production for some manufacturers has stopped, slowed or for some significantly increased.

Manufacturers navigating this challenging environment will need to emerge stronger, rethinking their ways of working to succeed in the new world. In our view, one area of focus should be digital transformation.

The Fourth Industrial Revolution and digitalisation are fundamentally changing the way many manufacturers operate, communicate and manufacture goods. Yet to date, the take up within UK manufacturing has only been moderate. COVID-19 has however highlighted the need for manufacturers to pick up the pace to allow improved electronic communications through the supply chain to drive further efficiency gains and productivity. The data generated through greater connectivity will provide manufacturers with invaluable supplier and market information and greater flexibility to pivot during times of change and challenge.

In our digital transformation survey, manufacturers clearly understood the benefits of investing in digitalisation and recognised that these extend beyond the factory floor to back-office support functions and supply chains.

Since the spread of COVID-19, manufacturers’ supply chains have been hit hard. Greater visibility through digital transformation connectivity would allow businesses to respond quicker to expected supply chain disruption and enable them to track orders and delivery times.

In addition to this, greater connectivity with customers will provide better insights into their buying behaviours and changing requirements, again allowing a faster response to changing circumstances and needs.

In uncertain times major investments in robotics and AI may not necessarily represent the best value for money for the typical manufacturer seeking to digitalise their businesses. Starting small is often where the value proposition is clearer. More modest first steps like ensuring your CRM and ERP software is up to date can improve productivity without the need to invest millions in major projects.

Change offers huge opportunities and, if properly supported, Britain’s historic strengths in innovation, design and service provide the right foundations for a successful and well balanced UK economy.

The government recently paid tribute to the work manufacturers have done to keep the UK economy going during the pandemic. There is no doubt that once the UK emerges from the COVID-19 pandemic, the sector will need the government to help support the significant change and high levels of investment that will be required for businesses to embed greater digitalisation.

Tom Lawton is National Head of Manufacturing at BDO.

“There is no doubt that once the UK emerges from the COVID-19 pandemic, the manufacturing sector will need the government to help support the significant change and high levels of investment that will be required for businesses to embed greater digitalisation.”

Tom Lawton, National Head of Manufacturing at BDO

Manufacturing in a new world through digital transformation

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