Outdated myths about manufacturing could harm British firms

Britain needs to develop a better understanding of the benefits of manufacturing if it is to be in a position to compete with Asian economies as the world comes out of recession. These are the findings of a study – Ten Myths about Manufacturing, the Future of Manufacturing – from the Advanced Institute of Management Research (AIM Research).

"Forget the Dickensian image of workhouses and cotton mills or the 1970s picture of striking car plant workers," says Andy Neely, deputy director of AIM Research who led the project. "Today, manufacturers are not just producers they are also inventors, innovators, supply chain managers and service providers."

This is one of the misconceptions documented by the study, which grew out of a forum convened by AIM and the Confederation of British Industry (CBI). The responses of senior representatives attending the forum illustrate the extent of misunderstanding about UK manufacturing:

The 10 myths:

• Manufacturing is a homogenous sector
• The United Kingdom can flourish without manufacturing
• Manufacturing equals production
• Value only lies in products
• High-value manufacturing can only be pursued in developed economies such as the U.K.
• R&D must remain in the U.K. to capture value
• Manufacturing capabilities can be developed quickly
• Manufacturing is low skilled
• We know the skills needed for the future
• Government is needed mainly to procure wisely and bail out failing companies.

"It is essential for the future of the U.K. economy that these myths are dispelled," says Professor Neely. In line with this and AIM's objective to impact on management practice the report outlines the reality behind these myths.

Manufacturing encompasses increasingly global, inter-connected, multi-partner and multi-business elements. In order to compete with places such as China, U.K. firms must set their R&D strategy in a global context, and adapt their business models, product offerings, processes and service systems to deliver higher value manufacturing.

Rather than believing that the U.K. can survive as a service economy alone, manufacturing and services need to become more integrated, developing technologies and new business models to address the provision of services related to their products.

Rather than focusing solely on short-term performance goals, manufacturers should invest in assets, metrics, operations and practices that have the potential to generate growth when the economy recovers.

Modern manufacturing involves the application of scientific principles, new technologies and the latest management thinking, requiring a highly-educated, mobile workforce, which industry, Government and educational institutions need to work together to provide, along with training to keep up with changing skills needs.

"To prepare for the economic upturn, the government must develop policies to enhance the performance and competitiveness of manufacturing, and proactively monitor the economic conditions for manufacturing in the U.K.," says Professor Neely.

The report can be downloaded from www.aimresearch.org/Publications/executive-briefing/future-of-manufacturing/.