INDUSTRY 4.0 APRIL 2019
A LIGHT IN
THE DARK
It can often appear that today’s manufacturing landscape
is a treacherous mix of rocky politics and stormy
economic conditions. However, a number of ‘lighthouse’
companies across the globe are pointing the way ahead
BY WIM GYSEGOM, PARTNER, McKINSEY
The UK’s manufacturing sector has
continued to make a significant and
sustained contribution to GDP in
recent years. However, what is notable
is a lack of growth, attributable to a
number of factors: we’re seeing levels
of confidence impacted by Brexit, export orders
have slowed, and consumer demand at home has
diminished, to name but a few.
A report published by the McKinsey Global
Institute in September 2018, entitled Solving
the United Kingdom’s productivity puzzle in a
digital age, confirmed that while manufacturing
has maintained its position
as a leading employer in the
UK, with employment levels
increasing rapidly after previous
downturns, productivity levels
have fallen. The result of this
drop in productivity? The
UK has fallen significantly
behind global manufacturing
powerhouses such as China,
the US and Germany.
Recently announced site
closures, such as Honda’s
decision to shut down its
Swindon manufacturing plant
and move operations abroad,
are a further demonstration
of how global value chains are
shifting to match changing
consumer demands. Other
high-profile closures show
businesses shrinking their
workforces in recognition of
falling levels of demand.
On a wider stage, we should
also note that a raft of global
factors, such as an aging
workforce, lack of sustainable
resources and a volatile
political environment, all
have the potential to play a
part in creating an unstable
economic outlook.
Beacons of hope
While these challenges are
undoubtedly serious, they are
by no means insurmountable,
and there is cause for hope
among the storm clouds
gathering on the horizon.
The digital revolution is well
underway, leaving few aspects
of our lives – and the wider
global economy – untouched.
Like previous revolutions the
world has seen, it is both a
product of and a contributor
to these challenges, creating
an opportunity to transform
our manufacturing sector and
provide the missing piece in
the UK’s productivity puzzle.
McKinsey’s recent
collaborative research with
the World Economic Forum
(WEF) surveyed 1,000
leading manufacturers across
the globe to discover which
organisations are successfully
adopting digital manufacturing
solutions at scale, and their
underlying formula for success.
As a result of this research, 16
leading manufacturers were
identified as beacons of hope
in an uncertain environment,
which we have called ‘industrial
lighthouses’. They mark a
Productivity
levels in UK
manufacturing
lag behind many
of our rivals
Tomasz Zajda / stock.adobe.com
34 www.manufacturingmanagement.co.uk
Christopher Boswell / stock.adobe.com
/stock.adobe.com
/stock.adobe.com
/www.manufacturingmanagement.co.uk