Why now is the time for UK manufacturers to invest in digitalisation
By Ian Isaac, Managing Director, Lombard
In talking to manufacturers about digitalisation, we at Lombard tend to hear two reasons why some businesses are holding off investing in new technology.
1. Cost – isn’t this emerging technology too expensive? Is it too difficult to get funding for new technology?
2. Future concerns – with all this political uncertainty, shouldn’t we wait to make any upgrades?
However, conversely many customers tell us that, for these very same factors, now is the time to invest in digitalisation, and they are turning to us to assist with their growth plans.
As with any new technology, when robotics and other ‘Fourth Industrial Revolution’ technology was launched, it was expensive. However, over time these bespoke systems only available to large companies, have moved to off-the-shelf options. In fact, as EEF’s Business Growth Consultant Martin Strutt pointed out in a recent podcast, “There has really never been a better time to invest in 4IR technologies as the cost has never been lower.”
This technology is now accessible to many companies and, as our customers have found when we work with them on costing models, the payback can be surprisingly quick.
Although traditional funding models often don’t look favourably on emerging technologies, Lombard’s Technology team have developed a finance scheme designed specifically for this type of technology. It covers a broad range of technology assets and enables businesses to cover that initial outlay through cashflow over an extended period.
As one example, Bowers & Wilkins, creators and manufacturers of world famous speaker systems, wanted to increase automation in their production processes, so they initially approached us for asset finance to enable them to acquire two FANUC painting and sanding robots, along with other plant and machinery. The company built an automated production line that will produce far more output per month as well as improve the consistency of that output. Now, we are currently exploring how our Software Licensing Solution could help them unlock investment in their proprietary software.
Companies that are interested in seeing what is possible should consider some ‘industrial tourism’ where they visit other companies that have already started their digitalisation journey. Another option is to visit EEF’s Technology Hub near Birmingham, which has the latest technology on site.
The EEF/BDO Manufacturing Outlook 2017 for Q4 found that manufacturers are ending the year with a bang on the back of continued improvement in global demand and increased export performance. The, uncertainty about the exact political situation in the coming years is not stopping companies from moving forward.
No matter the outcome from Brexit, UK makers will still be competing against companies from around the world. The goal will always be how to ensure Britain is considered the number one place for value-added, quality manufacturing. If UK companies wait too long to access the productivity boost available through automation and artificial intelligence, the cost of playing catch-up will be too high.
In working with manufacturers on investing in new technology, we’ve found that no one is precluded from being part of the Fourth Industrial Revolution. The important thing is to be brave, have confidence in the quality of the products you make, and explore how technology investment can improve your business and secure your future.
Lombard is the headline sponsor of the National Manufacturing Conference on 20 February 2018, which brings together 800+ manufacturing leaders from across the UK. In addition to high profile speakers, including Leader of the Opposition Jeremy Corbyn, the conference features four workshop panels of peers and experts on the themes of cyber-security, trade, employment post-Brexit and energy savings. Register for tickets (with an early bird discount) here.