Manufacturing Observations & Challenges

SME’s Is A Terrible Categorisation

For years the category SME has been used to identify those companies below 250 employees. The challenge is though is that this lumps a vast mass of organisations together and perhaps clouds how we should be helping them. The following numbers hopefully illustrate this

Out side of the SMEs categorisation there are 500 large L companies who generate approximately 30% of the gross value added production
In the M medium sized arena (a category that isn’t often or specifically segmented ) there are 6000 medium sized companies manufacturing approximately 22% of the gross value added production
With the highest number of 3 million of the S i.e. Small generating approximately 48&% of the gross value added production

So historically there has been a massive focus on helping create start up businesses which has led to the proliferation of Small businesses. Perhaps the help and focus should be given to Scale Up Britain and helping the forgotten sector the Medium’s to further improve there performance

The need for speed in manufacturing

In a previous article I wrote about the benefits of reshoring manufacturing back to Britain. So if this is to happen how could it impact on the medium businesses and what is necessary in order to sustain reshored production in the UK. The points below are considered by industry experts as being the most important drivers

Business eco systems
Business culture
Customer location
Labour skill and availability
Resource cost and availability
Regulation

All the above link with the element of speed. So an example that for me illustrated this really well was a global organisation who had previously used diverse locations in order to get the most effective unit costs for a product development. So in their particular sector the new product ideas were created in Norway. These ideas were then shipped to India for drawings to be created (due to the very low unit cost that could be achieved) , the production then took place in Lithuania (lowest production cost). The challenge was that the individual low unit cost didn’t translate into an effective model. So now all activities have to be completed within a few hours of a production location to allow improved communication and coordination.