Posted by: Paul Millican
There’s been a lot to be happy about in the UK manufacturing industry this spring. We’re continuing to see monthly output increase and year-on-year growth hit 3.8% this February, putting manufacturing output at its highest level in two and half years!
We have food, beverage, automobile and pharmaceutical production to thank for this hike, as well as the Government who introduced a number of incentives to drive UK manufacturing growth, including tax breaks.
What is the result of this growth? A very promising forecast for the UK manufacturing industry (hurrah), but a word of warning – increased output doesn’t always mean increased profits or improvements in efficiency. How businesses manage their processes during periods of growth is well known for making or breaking a good establishment. One can very easily find themselves doing the ‘under-worked, over-capacitated’ balancing act. It’s vital for any growing business, in manufacturing or not, to review and facilitate growth deep at the core of their business processes.
It’s not all about running a tight ship though. Increasing profit margins and maintaining efficiency can be bolstered considerably by simply reviewing current suppliers. We can all fall into the trap of taking a ‘what ain’t broken…’ approach – especially when busy running your empire– but sometimes making a small change with a supplier is all it takes to make a big change to the balance sheet. For example, I recently helped a business reduce their gas bill by over 10%, which equates to £116,000 per annum – a substantial saving!
So, the over-arching message here is to enjoy growth, but to be ready for it and use it to increase the all-important GPM. This might sound obvious, but are we all as tightly stitched as we would like to be?