The UK chemical manufacturing industry is showing solid growth in 2015 and this is predicted to continue “By 2030, the UK chemical industry will have further reinforced its position as the country’s leading manufacturing exporter and enabled the chemistry-using industries to increase their Gross Value Added contribution to the UK economy by 50%, from £195 billion to £300 billion.” The UK’s business revival and its capacity to respond to economic challenges depends on sustaining a differentiated chemical industry.
Countries within the developed world with a strong manufacturing reputation are fortified by the chemical production industry – producing vital components onto the secondary manufacturing sector such as paper, textiles, aerospace and electronics.
Having previously looked at the challenges facing the chemical manufacturing industry this blog focuses on the factors that make the UK chemical manufacturing industry so strong and how it will encourage growth into the future…
High value products, a highly skilled workforce and developed manufacturing operations
Highly skilled technical workers play a vital role in the success of the chemical industry. There are specialised skills needed in chemicals production that take time to develop, are not easy to acquire or transfer to new markets hence why the chemical industry must remain long term within the UK and resist the temptation to seek offshore alternatives. The chemical and pharmaceutical industry is a commercially powerful force in this country and beyond as the UK’s number one manufacturing export. The UK chemical manufacturing industry accounts for around 600,000 jobs, with 20% higher employee costs than other manufacturing sectors.
This sector’s employment levels extend further. Indirect jobs include contract staff employed by third parties, services such as transport, site maintenance, finance plus downstream workforces (such as plastics processing) are all dependent upon the chemical industry. It is estimated around half a million jobs depend on the chemical and pharmaceutical sector, therefore investment into developing this industry is vital to the UK economy.
Manufacturing innovation is encouraged within the UK
The UK is recognised for the quality of its research and development and is routinely furthering its strength in science and innovation. The UK represents just 0.9% of the global population, it accounts for 3.2% of research expenditure and 4.1% of researchers. The government offers substantial tax credits to UK-based business engaged in R&D. As a result, the UK has developed dynamic, innovative groups in a wide range of technologies. Several overseas businesses have invested in UK R&D centres to take advantage of this open innovation ‘ecosystem’. Notably, around 45% of all business R&D in the UK is backed by foreign investors.
Improvements in the chemical manufacturing supply chain present opportunities for the future
We have reflected how the chemical manufacturing industry has a strong foothold in the UK economy and in turn the UK manufacturing sector is a global player; this must be developed and co-ordinated further in order to retain the industry’s reputation as a research and development leader.
So, how can the sector make improvements in order to positively impact its own bottom line but also that of the wider supply chain?
The adoption of smart manufacturing processes: Scalable, agile and greater resource efficiency offers substantial possible benefits in the chemicals industry. In the UK, this additional revenue is estimated at £10 billion. An effective business management solution such as Microsoft Dynamics can help support resourceful recipe management and efficient demand planning, allowing manufacturers to streamline their processes and aid resource efficiency.
Innovative product design: In the UK the formulated products market is worth around £180 billion a year. An estimate of the potential benefit of developing domestic materials to replace those imported (material intervention) for chemical manufacturing totals at £5 billion. Chemical products designed for a ‘circular economy’ offer additional potential of around £1 billion, through designing products for end-of-life waste management and recycling, and this figure could grow up to £10 billion by 2020. Microsoft Dynamics can also help manufacturers shrink development cycles, respond quickly to customer trends, and comply with changing regulations. With the right technology in place, an ERP system can improve operational processes, provide supply chain visibility to expand production and traceability, and increase your competitiveness—worldwide.
Overall the future looks bright and green for the chemical manufacturing industry, this needs to be fuelled by continual investment into research and development and development of sustainable supply chain processes.
For innovation to be empowered within any workforce the processes already in place must be as efficient as possible. Microsoft Dynamics can unify your sales, marketing and service functions to give a 360 degree view of both the inside and outside of your business, harnessing data through the Internet of Things (IoT) and ultimately allowing you to improve your customer service and product offering.
With Prodware adjust Chemicals based on Microsoft Dynamics ERP, manufacturers can drive further innovation with the ability to restructure formula management, get easy access to inventory reporting, benefit from automated quality management and production planning; all whilst gaining valuable insight and analysis of big data. To find out how Prodware can help drive innovation and streamline manufacturing processes contact us today.