The UK has a wealth of small manufacturing companies. Each has the potential to make a dent in the universe, or a mark on the manufacturing world. They may already be on course to do just that, but if not, then perhaps they should be exploring innovation.
Innovation needn’t be a revolutionary breakthrough in material sciences or machine learning. Innovation can be product development, process development or business model development.
Innovating is always more profitable than existing. It is the lifeblood of progress, but in manufacturing it's been seen as the domain of giants, the conglomerates with vast resources. Yet the narrative is shifting and agile SME’s are emerging as innovators.
Unburdened by bureaucracy and without shareholder demands, smaller businesses can be nimble, adaptable, and driven by a mission rather than margins. Unlike their corporate counterparts, they can pivot quickly, experimenting with novel ideas without fear of losing market confidence.
But money always counts, and it is often a struggle for smaller businesses to allocate resources for R&D. Limited budgets and time constraints will stifle innovative ambitions. And so, this is when SME’s might embrace the ethos of startups, seeking investors willing to share their vision and support their journey. For sure, new skills are required, new knowledge, even a new vocabulary. Venture capital or venture debt? Securing a loan or project financing isn’t the same as raising a venture round and figuring out the funding piece can seem complicated. But the benefits can be considerable.
In addition to investment, innovating businesses should pursue grants and public incentives, government pull-through for the relevant enterprises.
At Fractory…
My manufacturing company, Fractory, started in Estonia but now headquartered in Manchester, began life as a startup and might still be described as one: after all, only last year Fractory raised its latest investment round, led by a specialist industrial technology investor.
Startups, in many ways, exist to innovate. And if your organisation needs to innovate it can be useful to think about it in terms of startups. Many of the best startups solve problems, not by finessing existing solutions but by asking how a problem would be approached if we were to start from the beginning. What if we started from scratch?
That’s the Fractory genesis story: as an engineer I found it beyond frustrating to spend valuable time on outsourcing for parts and materials, seeking quotes, negotiating, navigating supply chains, overcoming countless unexpected problems. So, I asked what if software could take my 3D models and find the right manufacturing solutions for them? I mean, I have the models or drawings and manufacturers around the world have their machines. So, what if information could flow freely between our companies and a logical decision about where and what to produce would be made? And that’s how Fractory was born, bringing engineers together with the most suitable manufacturing capabilities in the market. And now manufacturers large and small, with or without procurement specialists inside their organisations, are finding this innovation useful and profitable.
Six years ago, my co-founders and I were pitching the Fractory idea to companies, only to be turned away due to its novelty and, perhaps also, due to fear. Fear of failure often stifles innovation, yet it's not as daunting as it seems. Embracing change can lead to better opportunities. Instead of fearing the unknown, imagine ideal solutions. Start by discarding old paradigms and then dream up better methods. Make like a startup.
Innovate for Profitability…
The key factor in any production is productivity. Through productivity comes profitability or, conversely, unprofitability. Every manufacturing company is looking for productivity, to a greater or lesser extent. The best activity aimed at increasing productivity is innovation.
Faced with fierce competition from larger players, innovation can be the ticket to survival for smaller businesses. It can also be the ticket to commercial success: with newfound financial backing, a journey of exploration can lead to monumental changes, as well as greater productivity and profitability.
