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Failure to prioritise resource efficiency is costing UK manufacturers billions

Published: 15 November 2018 - Rachel Tucker

New report details how UK manufacturers can improve non-labour resource productivity and cut costs without significant capital investment - yet many are failing to grasp this key opportunity, says Martin Chilcott.


Manufacture 2030’s founder Martin Chilcott, has today called on manufacturers to pay closer attention to resource efficiency, highlighting that manufacturers are failing to tap into the potential to boost their competitiveness and non-labour resource efficiency. Ahead of the launch of Manufacture 2030’s own report, Resource efficiency: a missed opportunity in manufacturing, Chilcott has warned manufacturers that if they don’t adapt their strategies soon, there will be no chance of reducing the 36 per cent of global CO2e for which the sector is currently responsible.


Chilcott argues that for the UK to boost productivity at a time of low capital investment in machinery and automation - due in large part to Brexit uncertainty - a focus on non-labour resource efficiency could be the answer. He believes that it represents perhaps the biggest missed opportunity in manufacturing today.


With energy prices set to rise steeply between now and 2020, manufacturers can expect an increase in production costs from energy alone. Add to this fluctuating materials prices, the rising cost of water and waste management, and the fact that the proportion of in-put costs from energy is rising as factories become more automated and the forecast for the industry becomes even more challenging. These trends, combined with the findings from Manufacture 2030’s report, which shows that over a third of manufacturers do not set energy efficiency targets and so have no means of measuring improvement, are the backdrop to a sector that needs to act now to reverse its decline in productivity and competitiveness at a time of great uncertainty.


Chilcott, commented: “The UK industry average for resource efficiency is a paltry one per cent, well below the seven per cent best in class gains available. We know most factories don’t have the capacity, knowledge or tools to manage the small actions needed to improve. Yet, according to Cambridge University’s Institute for Manufacturing, improving resource efficiency could save UK manufacturers £10 billion. The good news is that resource efficiency doesn’t require significant capital expenditure, so it could be prioritised even during this period of Brexit uncertainty.


“Our new report shows that while manufacturers, in principle, see the benefit of resource efficiency, there is inertia around its implementation. Specifically, the barriers to progress include the perception that there is a risk of disrupting production, a lack of knowledge of what to do, no, or poorly communicated targets, weak cross company co-operation and insufficient time. To affect tangible change, factories need to move from solely focusing on a few large capital projects, to including the systematic management of the hundreds of small, inexpensive adjustments that can drive continuous improvement. Achieving this shift could allow UK manufacturers to make substantial improvements to their profits, productivity and competitiveness.”



 
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