The early 2000’s saw demand for raw materials jump and costs thereof rise commensurately, especially steel, increases as much as 50% have been widely publicised. Many UK manufacturers responded by rushing to the Far East, particularly China, to take advantage of lower labour costs. Lead times and cash required to finance inventory increased significantly, against unpredictable demand, whilst control of exchange rate fluctuations, IP in product design, manufacturing process, distribution and product quality all became much trickier to manage.

Tough times require tough decisions but manufacturers could have done more to exploit world-class R&D capability, right here in the UK, and responded with innovation in design engineering, material science, manufacturing process and distribution strategy. The good news is that there’s still time for some companies to do so but you’ll need to get a move on and your approach requires some careful thought to determine the priorities and get it right. Here’s a few things to be thinking about;

• Are there opportunities to redesign your product(s) to reduce the cost of production, packaging, storage, assembly, transport, maintenance, end-of-life and/or reuse?
• Could you use Applications Engineering to achieve common components across families of products?
• Have you investigated new materials which deliver the same or better performance, at lower procurement cost and/or lower production cost?
• Could new production techniques and processes reduce production costs?
• Are sub-assemblies from suppliers a better way to procure certain aspects of the product?
• Could you (re)design to automate aspects of assembly?
• Could you form strategic alliances to accelerate and/or widen distribution channels to desired markets?
• Could you licence the design and manufacture to others to produce your products ‘under licence’ in markets where your products sells and reduce logistics costs?
• Could you co-brand with others using the same or similar distribution channels to drive increases in volume and benefit from bulk purchase privileges?

How could you exploit the UK’s innovative R&D culture?

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