Don’t give up

Red tape and competition from low cost economies are taking their toll of manufacturers, according to the second annual ‘Heartbeat’ survey of 2,500 SMEs by YouGov for ERP developer Sage. It reports that 63% of UK manufacturers face more competition from abroad, nearly double that of any other industry, and that 78% say they are under pressure to cut prices. It also finds 49% of manufacturing bosses say they would be unlikely to set up in business if the opportunity arose again – up from 18% on 2004. And it shows that 81% of them don’t believe that any government will change this. In fact, the YouGov report says that 27% of all manufacturers have considered giving up, and 44% have stopped taking on new employees – not least because of issues around managing absenteeism and redundancy. And with the cumulative cost to firms of regulations since 1998 set at £39bn, according to the British Chambers of Commerce’s ‘Burdens Barometer’, it’s no wonder. Sage Manufacturing managing director Andrew Buckley is acutely aware of the survey’s ability to his business, but says: “We couldn’t brush it under the carpet.” And he adds that getting companies’ IT systems updated and adequate to facing down the challenges has to be key to survival and development. Improving automation around compliance and HR is obvious, but Buckley also urges SMEs to consider the improvements they could be making to their delivery performance record, quality and cost base if they had good IT.