There is much optimism that 2022 will be a strong year for UK manufacturing, but growth is being held back due to continued supply chains issues that are impacting suppliers of machine tools, machine manufacturers, subcontractors and all parts of the chain.
Several factors are combining to compound the issue and stunt growth leaving machines and materials stuck on cargo ships due to shipping lane issues, semiconductor supply problems, materials in short supply, skilled labour shortages, trade wars and a range of ongoing problems caused by the Covid-19 pandemic.
Last year exposed the shortcomings in global supply chains and the wide-reaching impact of continuous supply disruption rose to the fore, highlighting the need for businesses to beef up their existing chains and look or be forced to develop more local ones.
According to the latest UK manufacturing IHS Markit/CIPS Purchasing Managers’ Index (PMI) published last month, logistic disruptions and staff shortages are still “stymieing the overall pace of expansion”, while manufacturers also indicated that logistic issues, Brexit difficulties and the possibility of further Covid restrictions had all hit export demand at the end of 2021.
Meanwhile, the Contract Manufacturing Index (CMI) by Qimtek also signalled out supply chain issues as a reason why the final quarter of 2021 was subdued and being held back with the fall in business “more clearly linked to difficulties in sourcing material and rising energy and material costs” with signs without these constraints underlying demand would be stronger.
Qimtek owner Karl Wigart says: "Down the line there are even faint indications of a coming capacity crunch. A lot of subcontractors are working flat out on existing business and it is difficult to add more capacity quickly as machine tool manufacturers are also facing supply chain problems.”
According to research by the Digital Catapult, strengthening supply chains is seen as a priority for nearly two thirds (64%) of manufacturing leaders in the UK, who selected supply chain crises as the top reason why manufacturers need to innovate their business models in 2022, noting it is vital their organisation “becomes more resilient and sustainable over the next 12 months through data-driven supply chains”.
Manufacturers also believe that investment in advanced digital technology can prove to be an answer to supply chain afflictions - including businesses grappling with parts and materials shortages, sudden factory shutdowns and unfinished products.
But what about the industry’s key players. Are they experiencing difficulties with the supply chain and if so, how and why? What are they doing to overcome them? What are their customers telling them?