IT Industry Trends In Manufacturing And Distribution

By Michael Eaton|16 March 2017

Economists expected a manufacturing slowdown in the UK, only for the closely watched PMI survey to end 2016 on a 30-month high, at 56.1 percent - beating gloomier economic forecasts.

Last year ended with the fastest growth in the sector for two years, with the weak Pound providing a much-needed boost to exports. Unfortunately, this means Imports are more expensive, causing cost pressures throughout supply chains.

Rob Dobson, a senior economist at IHS Markit, said in The Guardian: “The UK manufacturing sector starts 2017 on a strong footing. The headline PMI [Purchasing Managers’ Index] hit a two-and-a-half year high in December, with rates of expansion in output and new orders among the fastest seen during the survey’s 25-year history.” IHS Markit conducted the survey, working with the CIPS.

Overall, this is good news for the sector, with growth continuing into 2017. Manufacturers and distributors are keen to consolidate gains and keep driving forward savings. IT and technology are embedded throughout the sector, which is why we expect to see the following trends produce more efficiencies for manufacturers over the next year.

#1: Shorter produce lifecycle: A focus on profitable ranges

Manufacturers and distributors can no longer afford to produce and carry unprofitable ranges. Even with end-to-end distribution, through branded and unbranded e-commerce websites (another revenue stream), manufacturers will need to reduce product lifecycle’s, to increase investment for popular product ranges.

Analytics will play a key role in the decision making, with manufacturers carefully watching what sells, so they can speed up the rollout of new products to replace those that don’t quickly capture buyers’ attention.

#2: Enhanced sustainability

Sustainable manufacturing is the name of the game. Energy costs are rising. Green production benefits the bottom-line and environment. Sustainable operations also attract younger workers, making clean energy management an important feature of recruitment, innovation and cost management.

#3: Lean production

‘Lean’ is a word more commonly associated with the technology and startup industry. However, with more corporates seeking to emulate the fast-paced innovation of startups, some ideas and practices are now a feature of manufacturing in giants such as Ford and GE.

Predictive analytics, smart sensors, even AI technology, could all play a role in introducing Lean approaches to more manufacturers. With the right IT partner, manufacturers and distributors can integrate analytics and other tools into design and production software, to support faster innovation across the organisation.

#4: Smart products and analytics

Data, data everywhere, thanks to smart analytics, sensors, and other data gathering tools. Manufacturers are expected to start installing them en-masse in 2017. A smart idea, if they are used wisely, and the data results in improved efficiencies and leaner processes.

Immediate benefits should come from increased equipment knowledge, making it easier to identify how to improve the longevity of assets and reduce how long it takes to go from concept to production.

#5: Faster product innovation, with 3D Printing

Gartner predicts that 3D printing will shorten the product introduction timeline by 25% over the next few years. In particular, 3D printing is expected to impact the following sectors more than others: “aerospace, automotive, defence, heavy industrial equipment and medical devices.”

Between rapid iterative prototyping and new design (CAD) technology, the R&D process will get faster for manufacturers of all sizes. There are more IT and software solutions to make 3D printing accessible to those with no experience, and printer prices will reduce, making it a viable option for manufacturers everywhere.

One thing that will undoubtedly impact manufacturers across the UK in 2017: Brexit. The government has voted to trigger Article 50. All we can do now is wait and see, although early signs are that negotiations are getting into gear, with the aim of protecting manufacturers from uncertainty and economic headwinds.

Innovative manufacturers will always survive and thrive, providing they make wise technology investments and adapt to new trends and processes.

Further Information

5 IT Strategies for Business Success

Information Technology (IT) has revolutionised the lives of individuals and organisations. Innovation in this sphere has created business opportunities that did not exist five, ten or twenty years ago, both in the way companies operate as well as the services and products they sell.

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