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For this 2-part series, I’m joined by Jim Davison and Fhaheen Khan from Make UK, who represent manufacturers in the United Kingdom.
In Part 2 of our series looking ahead at what’s in store for manufacturers in 2022, I’m joined again by Jim Davison and Fhaheen Khan from Make UK. You can listen to part one here.
In the final episode of this series, we discussed the growing importance of technology in manufacturing and whether manufacturers see servitization as a big opportunity in 2022.
It’s encouraging to hear that digitalization is high on the agenda for manufacturers in 2022. But not just for the big players – Fhaheen’s example of an SME creating their products using a 3D printer in their bedroom before scaling up is nothing short of inspiring and just shows how digital can reduce or even remove the barriers of entry to a market.
Key topics covered (click to jump to the section)
- How will technology affect manufacturing in 2022
- New start-up manufacturers entering the market
- The role of predictive maintenance in manufacturing in 2022
- How benefits of servitization for manufacturers
- Is your sector ripe for servitization? Download the white paper
Niall Sullivan, Senseye: I wanted to sort of move on, shift the sort of conversation a little bit towards technology, because I know that was something Fhaheen, again, mentioned earlier, which will be, like you said, green technology specifically.
So maybe this is a question more for Jim, so we've seen technology such as 5G, now I've seen on your website, there's a lot of talk about 5G, and from our point of view, say a Senseye point of view, industry 4.0, and I was just wondering... Well, clearly, it's having a transformative effect already on manufacturing, but how is that going to look moving into 2022 and beyond, I guess, as well?
Jim Davison, Make UK: So I think one of the... Yeah, there is a recognition that, because of this labor shortage and the fact that there will not be a quick fix for some of those issues, to train the next generation takes four or five years.
The reality is far more organizations are open to investing in capital equipment. And a fundamental part of that is also how can they make sure that, that equipment and the systems that manage and organize the product action processes are far more digitally connected.
It's a cliche, but if you can measure it, you can improve it. If you can't measure it, then, hey, you're never going to make a drive change through your business. So I actually don't think that you can segment or separate digital technologies and how they will transform, not only manufactured products, but also the way that we manage a manufacturer within a factory, and the supply chain is how organizations are going to tackle some of these future challenges.
Utilizing technical solutions will drive a lot of the green improvements that we've sort of spoken about. So I think they're almost inexorably linked, and actually it will be digital capabilities that will unlock some of those features.
If you can measure things in real time, and then display information, and I use the word information rather than data, so that if you are managing a factory, you have a dashboard that can tell you, "Are we operating at the level that we need to? Are we operating at the efficiencies that we need to? Are we operating at the levels of quality and yield that we need to?" is really important because you need to capture those changes as a process or a product drift.
You need to spot that at the earliest opportunity so you can minimize waste. You can minimize inefficiencies within a production process. You can make sure that you make exactly the right quantity of goods that you're looking to make rather than a traditional approach of batches, just because that was efficient based on the production processes that you deployed.
So, yeah, I see that as being fundamental. Fhaheen, no doubt you've got some good observations there as well.
Fhaheen Khan, Make UK: Yeah, certainly. I mean, I think it's underestimated sometimes by maybe the manufacturing community, especially those who are yet to adopt technologies, actually, what are the benefits of doing so? And we actually monitor the kind of development of that journey. Every couple years, we see what stage businesses are in terms of their adoption, digital adoption journey.
We have this survey that we call, I think it used to be called the innovation monitor, but this year we called it something else. It was like the Industry .4.0 card.
But there's a particular question on that, that we do every two years or so, where it says, "There are four stages of digital adoption where going from preconception, conception, evolution, and revolution," and I'm not going to go into the details exactly what that means, but essentially the spectrum is from doing nothing about digitalization to actually having adopted digitalization, digital techniques, and seeing benefits from that adoption.
And we've seen that percentage of manufacturers reaching that revolution stage, which is the ideal stage that you want to be in, or at least it should be the goal for a business who;s undertaking these decisions.
At 2018, it was about 4% of manufacturers that was at revolution stage. In 2021, we have that figure go up to about 23% now. So not as high as we would like to see, but it's a significant jump in two years. And I think we mentioned this earlier, but the pandemic actually accelerated a lot of these plans, which enabled businesses to actually jump much faster into that kind of revolution stage.
So we're very pleased to see that that is moving in the right direction, and we accredit that to, obviously, businesses working with Make UK, but also programs like Made Smarter that has enabled a lot of businesses to adopt technologies.
The only thing I would add is actually something that I learned from doing a bit of research recently, so we published a report on SMEs and scaleups and manufacturing, just a couple weeks, a couple days ago. And one of the case studies we had for that report was about a new startup manufacturer.
So what we've seen is, it's very difficult to start up a new manufacturing business, because the capital required to access land, a factory, all these things that you need, it's almost immense for a new entrepreneur who may not have the finance capital needed to do that.
But technology has changed that a little bit. My discussion with this manufacturer, who describes themselves as a design manufacturing business, because they couldn't access a factory, they didn't have the capital to do that, what they did is they bought themselves a 3D printer.
They bought themselves a 3D printer in their bedroom, and they started designing products in the comfort of their own home. And once they were able to produce their own prototypes, they were able to go and meet with suppliers in the UK who already had access to production lines and facilities that could make those products for them.
And that shows you how technology has massively reduced the entry barriers for businesses. So if new people wanted to start business in manufacturing, they are more easily able to do that now than they were before, and that is accredited to the advancement of technology and the fact that technology itself becomes cheaper over time and makes it more accessible to people. And we're very much looking forward to see what this business does, but also any new... If anyone's listening to this and thinking about starting a manufacturing business, know that it's probably not as hard as you think it is.
Niall Sullivan, Senseye: Right. And I think that's really an important point, because I know we were saying earlier that a lot of people aren't aware of manufacturing in the UK. It's just maybe myself included in that, but it's stories like that, that should be highlighted more to inspire the next generation, because... Yeah, I think that's just a really inspiring story, really. Brilliant.
So I was going to... Again on technology side, I know, Jim, you've worked with us at Senseye, on a lot of different projects, including a recent one, actually around sustainability in manufacturing, so you provide some really good insights. So I wanted to know, where are we at with predictive maintenance? What's your feeling from members? Is it something on their minds? Is it, are they still unaware of it? Or hopefully they're aware of it, but maybe culturally, maybe not ready for it. What's your sort of feelings on that particularly?
Jim Davison, Make UK: I think it depends on the type of... Manufacturing is a very broad, very broad church.
Niall Sullivan, Senseye: It is.
Jim Davison, Make UK: And companies and the kind of capital and machinery that they deploy can be very different. But definitely, for a manufacturer that is heavily dependent on the efficient operation of machinery, maintenance activities are absolutely critical.
If I think back to the days when I was responsible for running a manufacturing business, the absolute worst thing was when you had a very full order book and you needed to run your equipment flat out for months. The last thing you wanted was an unexpected breakdown.
Now, I could cope with planned down time. I could cope with a machine that I knew was going to be offline for two hours on a given day. You could plan around that. The absolute worst is that unexpected failure.
When the organization, that I was working in, got into making sure that we improved the uptime of our machinery, we had to do that by individuals measuring vibrations by hand, by temperatures, by hand, and literally physically walking around a factory to identify equipment that was starting to exhibit suboptimal operations, so that we could change those parts when we needed to rather than sticking to the manufacturers suggested change period that was always going to be long before the part was actually going to wear out. Because they never wanted to get warranty claims for bits that failed during their guaranteed lifespans.
So, I first hand have experienced the importance of doing that, and I'm talking about an operation that I left 15 years ago.
So I look at the current solutions for that and the kind of sensing that you can have with wireless connections, the means that you can gather so much more information efficiently. And then if you plug that into a system that is capable of managing, effectively how, when, and what you should be doing on your equipment to make sure that you minimize unnecessary downtime, but you make sure you avoid those kilometers failures, that is amazing.
And it will drive up not, only the efficiency of the equipment so it'll make sure that you are able to make the parts as fast as the machinery should be able to deliver it for you, but also at the quality standards that you need to be producing consistently.
So it's massively important to lots of industries. Some of the obvious ones are very high volume, fast moving consumer goods. Food manufacturing, actually, is incredibly well connected, digitally, in utilizing all kinds of capabilities to make sure that plant and equipment is optimized.
Car factories, ongoing continuous processes, again, they tend to be the industries that are furthest down this line. Where you get sort of not fully connected machines that aren't necessarily utilized hard all the time, then I would say the adoption of some of these concepts are not as mature for them.
For me, it's fundamental. If you really are going to lean out your manufacturing process and green your manufacturing process, then having that real time information and the ability to take proactive steps to make sure that your plant is optimized is absolutely critical.
Niall Sullivan, Senseye: Yeah. And obviously, yeah, keeping the factory running, like you said, is absolutely key. Yeah.
Jim Davison, Make UK: The worst thing I can remember was, we'd have machines that should have packed parts, one a second, and you'd go and see it and it'd be running, packing one every three seconds. You'd say, "Well, hang on a minute. What's going on with this, guys?" "Oh, we slowed the machine down, because fundamentally there was a problem with it." And rather than fix and address the problem, the guys would naturally just slow it down so that, "It was running, so I haven't got an issue." "Well, we have, because we are down to a third of the capacity that we should have been able to produce in a given day."
So yeah, there are some simple behaviors that we tend to find workarounds in processes that aren't necessarily under full visibility and full control, if that makes sense.
Niall Sullivan, Senseye: Yeah. That's actually a new one on me. I haven't heard of that before in my limited time in this sort of manufacturing sort of... in the world of manufacturing. Yeah. Actually slowing down the machine is a, I'll say a solution, but at least a sticking plaster might be the, I guess, the right analogy for that.
Jim Davison, Make UK: Yes. That's a good way of describing it. You're absolutely right. It was a sticking plaster. So, "Keep the machine running till I go off shift, and then it's someone else's problem."
Niall Sullivan, Senseye: Oh, God. That could never be a good thing.
Jim Davison, Make UK: No
Niall Sullivan, Senseye: Also, I wanted to just touch on the subject that's something we're hearing more and more about out at the minute, and I'm obviously interested to hear whether it's the case with you both as well, so we're hearing a lot about Servitization, so the offering of services. So not just selling products, but actually offering services to end customers.
So I'm just interested to hear your thoughts. Is that something you're hearing from members that might guess that is something that's going to be a big concern or big opportunity, actually, let's say, for manufacturers?
Jim Davison, Make UK: Yeah, absolutely. And yeah, I mean, if you're still manufacturing goods and service or products in the UK, you have to be very good at that, or add some real value to your customers. Because the reality is if you just go for lowest price, yeah, you probably wouldn't manufacture an item in the UK.
The reality is, I can think of a number of companies that have taken this concept on board. One is a subcontract electronics manufacturer. So rather than just making one item, one board, and then selling that to their customer, actually what they've managed to do is bring in assembly. So they've actually got to the point where they're actually assembling the item for their customers, so they're offering the assembly capability. They're also offering warehousing and stock management of those components for their customer.
But as far as the customer's customers, they think items are being shipped directly from their supplier, if that makes sense, not the subcontractor. And they're managing that supply chain. So yeah. As in when a customer order comes in, it goes to the subcontractor, they fulfill the order, they dispatch it. It looks as if it's come from that factory. It's got dispatch notes with the supplier's details, not the subcontractor's details.
And for me, that's one simple example of a small medium sized firm that's actually taken on board this concept, identified where and how they can wrap some service around what, otherwise, would be a single board, or a single component... Yeah, job for them, into something that's far more strategic to their customer, which means that it's far harder to displace that subcontractor than it would be if they were just competing for X number of widgets on a price basis, or a turnaround basis.
I think there are some interesting developments with machinery suppliers. So rather than a company selling me for X hundred thousand pounds, a piece of machinery, actually, they get leased, and it's leased on the basis of X number of packs per hour, and you are charged per pack, if that makes sense.
But the benefit for the company that utilizes the machinery is you don't have that massive capital outlay front. Also, the supplier is responsible for maintaining the performance of that machine as well. So for me, that's a really interesting example. And packaging firms and packaging supplier, or packaging machinery suppliers have been making roads into that market.
The obvious example is Rolls-Royce selling power by the hour, so yeah, airlines don't own the engines that sit under the wings of their machinery. That's sold by GE and Rolls-Royce as powered by the hour.
Yeah. I think there's going to be more and more of that, just because you have to add that value. You have to be a strategic part of your customer's infrastructure and supply chain. And the more that you can add value to that customer, the better that relationship is, and actually more lucrative that opportunity is to you as an organization as well. So it's definitely happening. I think we'll see more of it as manufacturing sort of adjusts and change. Change is looking forward.
Fhaheen, I don't know if you've got any sort of observations or thoughts.
Fhaheen Khan, Make UK: That was really interesting, Jim. I actually learned some stuff there as well. I didn't know that.
I was quite curious. Yeah. I mean, I think from what I understood from that, I mean, look, the idea of including services for manufacturers, it's not necessarily a new element of the production, but from what I understand, it's becoming more important to the end consumers. They're becoming more innovative in the types of services that they're producing.
And I think people, for the average consumer, they often don't realize how much of a service they are already receiving. I mean, you can describe Apple as a manufacturer of products as well, and then you include things like AppleCare or warranties, and that itself is the service element of manufactured goods. And I think people often don't realize that actually they are adopting a service and manufacturers have been including these elements for many, many years now. It's just part of the trade.
It's interesting that something that came up this year, just after the UK's exit from the EU, the EU introduced a new regulation or policy there, or something called the Right to Repair manufacturers. So actually, products like washing machines, dishwashers, cookers, that sort of thing, manufacturers would have to provide a longer guarantees in the EU for those types of products, and UK manufacturers, if they were to try to sell those types of products into the EU would have to also comply with the right to repair.
So that's been quite interesting. I've not heard any issues from our members around that problem. All it just means is that you have to give a longer time service so that consumers who buy a washing machine can maintain that product a much longer period of time, and it's better for them, but it also allows the manufacturer to include a new element into their packages as well.
So, yeah, I think as Jim says, I very much echo what he said in terms of it's going to grow. I think it's becoming more servitized, but we will also never see the end of the actual physical side as well. I think it's just going to be the way we deliver these products will change a little bit over time.
Niall Sullivan, Senseye: Yeah. And just to add on to that, actually, so our involvements will predict maintenance actually to take that service level beyond that. So if you're offering these guarantees, it just gives another level of guarantee, I guess. If you can predict some of these breakdowns in advance, you can actually be proactive with your end customers rather than reactive, like we were saying before.
Breakdown, someone wants a breakdown, something not working, whether it's in a factory, or a washing machine. But if it could be a more proactive service, then that can only be a better customer experience. And from that, I guess, is another layer as increased revenue as well.
Jim Davison, Make UK: Yeah. And I think it will drive organizations to design things differently. And what I mean by that is that things will be far more robust, more capable, be able to be upgraded, so their lifetime extend. And it's by introducing some of those changes that actually will get away from this throwaway kind of concept of, you have a washing machine for five years and then it's not economical to repair it, so you have to buy the next version.
I think all of those things will be challenged just by things like net zero and sustainability agendas, and customers will demand different things. And we'll see that with B2B type machinery transactions as well. Yeah. That liability, that repeatability, that capability of that equipment, I think, will get stronger, because, yeah, customers will demand it.
And if you put your name to a piece of kit being able to deliver X thousand parts every 24 hours for 15 years, then potentially that's different to just sending it to me and then expecting me to deal with sort of the ongoing upkeep maintenance. So, yeah, I think it's really interesting.
Niall Sullivan, Senseye: Oh, absolutely. Absolutely. I see... So we're coming to sort at the end now, but what I wanted to do is a couple of things. So I wanted to give... Obviously, we talked about the report or survey coming out in January, Fhaheen, so if you... I mean, we're talking now, it's not been released, but we'll include it in our show notes, if, obviously, you are happy to do that. But where can they download it from?
Fhaheen Khan, Make UK: Yeah, of course. That report, when it is available, and any other report I've mentioned today can all be downloaded from our website. You just may have to navigate that a little bit, but you will find it there available to you.
Niall Sullivan, Senseye: And also from Jim's perspective, if I wanted to find out more information about Make UK, what would be the best way to go about that to keep up to date?
Jim Davison, Make UK: So there are a number of ways. We're often posting things on LinkedIn. So there are often links to things like reports or events that Make UK publishing or industry insights. So yeah, like with me via LinkedIn, and then we can either link you to a resource or... Yeah, I'd love to talk to people to learn more about Make UK and their manufacturing businesses.
Niall Sullivan, Senseye: Fantastic. Well, thank you both for your time today. It's been really great to chat.
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