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Key Issues for Manufacturers Revealed in MY15 Report.

Attracting more than 800 delegates over the two-day event this month, Manufactured Yorkshire has been branded a huge success for both engineering and food and drink manufacturers in the region.

Speaking at the event and co-hosting two seminars, design and brand agency, The Engine Room took the opportunity to ask one key question to all manufacturing visitors at their stand: “What is your biggest challenge in manufacturing?” Speaking to over 200 people, The Engine Room was keen to pull out any key themes – particularly with a view to looking at how design thinking and brand development can contribute to overcoming these challenges.

Headline findings were as follows:

  • 27% of businesses consider SALES RELATED ISSUES as the biggest
  • challenge to their business.
  • 27% of businesses see STAFF RELATED ISSUES as the biggest
  • challenge to their business.
  • 25% of businesses see RISING COSTS AND MARGINALISED
  • PRICING as the biggest challenge to their business.

Other themes included processes and technology (5%), retaining service quality (4%), supply chain issues (4%), protection of intellectual property (3%), export and international strategy (2%) and other issues making up the remaining 2%. Results did not vary significantly between respondents from engineering and those from the food and drink sectors. The Engine Room was interested (though not entirely surprised) to see sales and pricing as two of the most prominent themes, together accounting for 52% of responses. 

These are the two reasons why many of our clients come to see us. They are often looking to enter new markets, further penetrate existing markets, launch new products or do more for existing clients. 

Pricing is also often an issue, with clients wanting to raise prices to combat increasing costs, without necessarily understanding how some external design thinking can support this process. Design isn’t just about communicating better (though that’s a part of it); it’s about ensuring differentiation in a crowded marketplace, it’s about standing head and shoulders above the competition and it’s about clarifying your product and service proposition so confidently and eloquently that your customers will choose you over the rest. When those customers buy into you, they’re buying into a wider proposition – one they’re prepared to pay more for because they see the value.

Brand and design also contributes to developing a more positive internal culture, helping to address some of the staffing and management development issues that 27% of responding manufacturing businesses face, with problems cited including comments such as “attitude to work, “recruiting the right staff” and “skills levels”.

Done properly, a well-communicated proposition linked to the values of the business will help to ensure staff buy-in and staff retention, it will help with recruitment processes and also with internal training and development plans. It can ensure that staff investment is appropriate, on-strategy and – most importantly – measurable and cost-effective. Staff aren’t just ‘experiencers’ of their company’s brand, they’re part of it. They should help contribute to it, live it and breathe it – all adding value to the service experience of customers and thereby adding further value and differentiation to your offer.

Also linked to pricing and service experience is the key theme of "servitisation", and the impact this concept is having on the sector. Pretty much all products, when being sold, have a service component to them and service is often the most important differentiating opportunity that a manufacturing business has. Pricing models are shifting to reflect this with many firms now moving towards subscription or similar-based pricing in order to determine revenues. It’s an area where design thinking can also help – by mapping current processes, product and service offerings against customer expectations and challenging conventional pricing approaches.

If you are interested in finding out more about how The Engine Room has been working to address issues within this market, or you have any comments to share with us, please get in touch.