Dispelling manufacturing myths

22 June 2010

Britain needs to rethink its attitude towards manufacturing if it is to compete with Asian economies, according to the Advanced Institute of Management Research (AIM Research). The organisation conducted a study into attitudes to manufacturing and maintains that Britain cannot compete globally if it does not understand the industry.

"Forget the Dickensian image of workhouses and cotton mills or the 1970s picture of striking car plant workers," said Andy Neely, deputy director of AIM Research and leader of the project. "Today, manufacturers are not just producers they are also inventors, innovators, supply chain managers and service providers."

The study grew out of a forum convened by AIM and the Confederation of British Industry (CBI). Responses of senior representatives attending the forum illustrate the extent of misunderstanding about UK manufacturing and, from the findings, AIM has extrapolated ten common myths surrounding manufacturing.

The ten myths:
- Manufacturing is a homogenous sector
- The UK can flourish without manufacturing
- Manufacturing equals production
- Value only lies in products
- High-value manufacturing can only be pursued in developed economies such as the UK
- R&D must remain in the UK to capture value
- Manufacturing capabilities can be developed quickly
- Manufacturing is low-skilled
- We know the skills needed for the future
- Government is needed mainly to procure wisely and bail out failing companies.

"It is essential for the future of the UK economy that these myths are dispelled," said Professor Neely. AIM now hopes its report can outline what it maintains are the realities behind the myths.

The report argues that manufacturing encompasses increasingly global, inter-connected, multi-partner and multi-business elements. In order to compete with places such as China, UK firms must set their research and development strategy in a global context, and adapt their business models, product offerings, processes and service systems to deliver higher value manufacturing.

AIM says rather than believing that the UK can survive as a service economy alone, manufacturing and services need to become more integrated, developing technologies and new business models to address the provision of services related to their products.

Furthermore, rather than focusing solely on short-term performance goals, the report says manufacturers should invest in assets, metrics, operations and practices that have the potential to generate growth when the economy recovers.

Modern manufacturing involves the application of scientific principles, new technologies and the latest management thinking, requiring a highly-educated, mobile workforce, which industry, Government and educational institutions need to work together to provide, along with training to keep up with changing skills needs.

"To prepare for the economic upturn, the government must develop policies to enhance the performance and competitiveness of manufacturing, and proactively monitor the economic conditions for manufacturing in the UK," concludes Professor Neely.

Download the report

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