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Product category: Engineering Education, Resources and Standards
News Release from: Technology Innovation Centre
Edited by the Engineeringtalk Editorial Team on 21 November 2003

Making the most of production

Strategic reasons for manufacturers to keep production in the UK will be spelled out in a Government-sponsored report being presented at Birmingham's Technology Innovation Centre later this month.

Key strategic reasons for manufacturers to keep production in the UK are spelled out in a Government-sponsored report being presented at an event at Birmingham's Technology Innovation Centre (the tic), at Millennium Point, on Thursday 27th November Based on the report "Making the most of production", by the Institute for Manufacturing (IfM), the presentation will be made by Phil Hanson, a leading expert from the Cambridge University-based institute

The event is free of charge.

The "Making the most of production" presentation will identify the grave dangers for UK companies who relocate production to low-wage Eastern Europe or Asian countries simply to cut costs.

An audience comprising West Midlands company directors and senior managers from, manufacturing businesses of all types and sizes, will hear of the unseen dangers to the country's economic future caused by exporting production in pursuit of lower costs.

He will emphasise that exporting production not only loses jobs, but also seriously endangers the UK's innovative and value-creation capability.

The consequences for the country's future ability to generate wealth could become very serious.

The presentation will detail five key strategic factors.

First, localised production gives a base on which to build the product and process innovations crucial to manufacturing's long-term future.

Remote production locations significantly undermine control over vital activities.

Secondly, close control of production means control over product and technological distinctiveness, crucial to a company achieving competitive and "copy-proof" market advantages.

Thirdly, localised production is key to rapid product availability - crucial in an increasingly just-in-time-supply world.

Rapid response is also key to satisfying fast-changing customer requirements.

This cannot be said of products in transit on a long ocean journey.

Fourthly, localised production provides a springboard on which manufacturers can build services and add value and growth to production.

And finally, without local production, conversion of intellectual property into marketable product is made significantly more difficult and less secure.

"Making the most of production" identifies that a significant number of companies are not taking such strategic factors into account before either outsourcing or moving their production abroad.

Over 70% of the 100 companies interviewed expected the trend of production moving overseas to accelerate.

A third of the respondents were also concerned that design and development activities - high value areas which commentators have regarded as an economic replacement for production - will also leave the country if a more strategic approach is not taken.

Jacqui Smith, Minister of State for Industry and the Regions, says of the report: "This study highlights the key strategic issues around production and innovation that companies need to master for success in an increasingly competitive global economy.

The study also clearly illustrates the importance of making the transition to high value manufacturing which is the basis of the Government's manufacturing strategy - the first of its kind for over 30 years.

Innovation is critical to achieving this transition and we will be setting out a clear framework for improving the UK's innovation performance later this year".

tic programme manager Chris Braganca is organising the "Making the most of production" events as part of the tic World Class Network (WCN) activities, in association with Accelerate.

Braganca has a wealth of experience working in, and running, manufacturing businesses large and small and says of the event: "Chasing cost-cutting as the answer to profitability might bring companies some short-term benefits, but could spell potential disaster for manufacturers through long-term decline and closure.

Businesses with vision will see the importance of long-term viability if they take note of the vital factors identified by Cambridge's IfM team in their 'Making the most of production' report".

The first "Making the most of production" event takes place in the tic at 1645 GMT on Thursday 27th November.

It will be preceded by a free, complementary seminar on the effective use of computerised design software, in conjunction with advanced IBM system (Catia) specialists Incat.

The "Making the most of production" event will be repeated by the tic's WCN partner, The Redditch Manufacturing Association, on 4th December at Bordesley Hall, Alvechurch with Arend Jan van Bochoven as speaker.

A further event is to be held in the Black Country in early 2004.

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