UK manufacturing facing pressure: Is sustainable growth the answer? | HCLTech

UK manufacturing facing pressure: Is sustainable growth the answer?

The UK manufacturing sector’s output has fallen sharply, but sustainable moves and green investments can mitigate the tough road ahead
5 minutes read
Jaydeep Saha
Jaydeep Saha
Global Reporter, HCLTech
5 minutes read
UK manufacturing facing pressure: Is sustainable growth the answer?

In February, the Confederation of British Industry (CBI) predicted a challenging year ahead for the UK manufacturing sector. That prediction just came true.

Its recent industrial trends survey result clearly indicated that recession concerns are on the rise as manufacturing output fell at its fastest rate last month, since September 2020.

With motor vehicles and transport, mechanical engineering and paper production the worst hit, output fell in 15 of the 17 subsectors surveyed.

Based on 277 manufacturing organizations’ answers, July witnessed the balance of factories reporting a rise in output versus a fall slumped to -19%, compared to plus 3% in the three months to July.

Similarly, compared to the long-term average of -13%, orders fell to -15%.

Gabriella Dickens, senior UK economist at Pantheon Macroeconomics, told City A.M. that the survey pointed to a likely fall in inflation over the second half of the year. “This [survey] adds to our conviction that the rate of increase in the core goods CPI will slow sharply in the second half of this year,” she added.

Improving productivity

In a move to improve productivity and output, manufacturers should turn to digital solutions.

HCLTech’s smart manufacturing offerings, consisting of Industry 4.0 solutions, have led to the digital set-up of 50 plants. This has created over $300 million in value savings, 50% productivity improvements by redesigning workstations and overall units and a 60-70% reduction time in CNC tool path programming.

For example, a Fortune-500 diversified manufacturer of industrial tools and household hardware wanted to reduce costs and optimize its manufacturing process. It needed help with uniformity and data standardization across ERP and non-ERP due to business customization and regional nuances that led to data reliability concerns, resulting in the underutilization of data.

HCLTech quickly identified the challenges, partnering with them to deliver streamlined business processes and decision-making, by bringing 30+ ERPs together, resulting in performance resiliency and cost savings.  

Martin Sartorius, a principal economist at the CBI, also told City A.M. that he believes that the gloomy outlook for manufacturers should present an opportunity to encourage decarbonization initiatives. The government should boost green investments and “double-down on delivering sustainable growth.”  

Investment in green tech

It’s estimated that the global manufacturing sector accounts for one-fifth of global carbon emissions and 54% of the world’s energy usage. The drop in output should be seen as an opportunity to reduce these figures, which in the long run will improve productivity and sustainable growth.

HCLTech has been developing green data centers since 2008 and also awarded the ‘Golden Peacock Eco-Innovation Award’ for its offerings. It has helped 70% of its customers in the EU and the UK to move to a cloud or a data center powered by renewable energy sources.

Powered by its strong expertise in Industrial Internet of Things (IIoT), artificial intelligence (AI), big data, blockchain, cybersecurity and cloud solutions and services, HCLTech has turned warehouses green that now focus on energy utilization, waste footprint and optimal operations, and is setting out examples with its supply chain management for its leading customers.

HCLTech enables clients to adopt energy-efficient hybrid or multi-cloud solutions that can help build a resilient, sustainable and future-ready enterprise. It includes the sustainability gamechanger, FinOps.

Act, Pact, Impact - HCLTech publishes its 2022 Sustainability Report

Download the report

Sustainable engineering

Crucial in the move to green is sustainable engineering. Described as engineering for human development, it focuses on meeting the needs of the present without compromising on the needs of future generations.

“A few of the imperatives that sustainable engineering practices can impact include bringing out energy-efficient products, product optimization, recyclable materials, circular design, sustainable packaging, optimal usage of resources for manufacturing and operations, sustainable supply chain and ecosystem, product lifecycle assessments, including less CO2 emissions and supporting a greener planet,” says Prasanna Oruganti, Associate Vice President, Industrial Manufacturing, ERS-HCLTech.

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