Use domestic vendors to strengthen manufacturing supply chains, urges Wright report

9 July 2014

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9 July 2014 | Anna Scott

A strong domestic supplier ‘eco-system’ will be vital for a successful advanced manufacturing sector in the UK and the government must create a globally competitive investment environment for industry to flourish, the Wright report has concluded.

Commissioned by the Labour Party and written by Jaguar Land Rover’s executive director Mike Wright, the report states small and medium-sized businesses in the advanced manufacturing supply chain are crucial to the overall success of the sector.

Having suppliers in close proximity will strengthen relationships and communication, allow for shared resources and spill-overs and enable shorter and more efficient logistical chains, the report stated.

“The proximity of domestic suppliers will help advanced manufacturing innovate in terms of products and processes, be more flexible and responsive to customer demand, and more efficient,” it read. 

“Advanced manufacturing suppliers are now often deeply involved in research and co-development with ‘top tier’ original equipment manufacturers. Indeed, we should move away from the traditional ‘tiered’ view of the supply chain: some suppliers are far larger than the companies that use their inputs.”

However, the report also found not enough young people in the UK are being educated in the right skills to an adequate level for advanced manufacturing and its supply chain, across all sectors that depend on science, technology, engineering and mathematics. 

Smaller companies in the supply chain in particular are competing against larger companies to attract skilled employees and find it harder to provide apprenticeships or make up for skills deficits through on-the-job training. “We are not educating nearly enough skilled apprentices or graduates to replace those retiring from manufacturing roles,” it read. 

The report - Making the UK a globally competitive investment environment - recommended expanding the number of manufacturing-related degree places and doubling the number of engineering apprentices qualifying at the advanced level. It said it must also be easier for highly skilled non-EU students graduating from top UK universities with manufacturing-related degrees to work in the UK on graduating.

“It would be easy to conclude, given the current success of many UK-based advanced manufacturing companies, that the sector’s contribution to a sustainable recovery here is secure. It is not,” Wright said.

“Much progress has been made, but the sector has reached a crucial point in its evolution. If we build on our success, and respond with determination to the challenges I lay out in this report – on productivity, costs, innovation, skills, funding and the governance of industrial policy – then the sector will play a major role in growing and rebalancing the UK economy in the long run,” he added.

The Labour Party welcomed the report. Chuka Umunna, shadow business secretary, said: “Labour is clear that the way to grow more of the high-skilled, better paid jobs Britain needs is through a proper industrial strategy, supporting long-term investment and working in partnership with business. Strengthening Britain’s manufacturing supply chains is a crucial part of this.”

Ed Balls, shadow chancellor added “all parties will have to respond to the challenge Mike Wright has laid out as we develop our policy agenda for the next election".

 

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