UK manufacturers change the rules of competition

A new report from Cranfield School of Management and based on a survey of some of the UK's biggest manufacturing plants uncovers that by offering services alongside their products, manufacturing companies can increase revenue, offer greater value to their customers and differentiate themselves from the competition. The survey revealed that most of the companies offered some kind of service, for example maintenance, alongside their product offering. For some of the companies this service offering was very profitable; 1 in 5 of the companies were making a greater return on sales for their service offering compared to that on their products. Author of the report Dr Marek Szwejczewski (pictured), principal research fellow at Cranfield and the Best Factory Awards' senior judge, said the figures showed that quality was a major strategic priority. "There has been a complete move away from competing on price to adopting more sustainable options such as innovation, service and customisation," he said. "The results are very positive for the future of manufacturing. Although some sectors are experiencing a decline as a result of the economic downturn, there are some areas of manufacturing that are growing; in particular the high technology sectors, such as defence and electronics and other sectors such as food." He went on: "My advice to those sectors that are experiencing decline is to refocus their business strategy and to focus on one or two areas where they can make significant improvements. "Manufacturing companies now have a wealth of new technologies and organisational concepts to choose from; at Cranfield we champion continual development in this area. "I would also advise that these companies don't loose sight of the importance of continuing to invest in their staff. This will put them in a stronger position for the upturn." The research which investigated the strategic role of UK manufacturing operations and the focus of their improvement activities also highlighted a move towards green manufacturing, with companies reducing levels of waste, improving recycling and reducing energy usage. The report, The Policies, Practices and Performance of UK Manufacturing Industry can be found online www.som.cranfield.ac.uk/som/gmrdownload