Advance manufacturing and technology innovation provides the US and Europe with an opportunity to regain competitive advantage in the manufacturing sector, something they have struggled with over recent decades. The rise of Asia as a manufacturing power house has, at least initially, been built on low labour rates with which the UK and others cannot compete.
The UK Department of Business and Innovation recently announced a £150M investment in advanced manufacturing in a move to increase the competitiveness of the UK sector– an investment trend being replicated across Europe and North America.
Advanced manufacturing focuses on products that are inherently complex, and for which standard manufacturing approaches and low cost labour is not the most effective production route. Using a unique combination of product innovation and novel manufacturing technologies, companies can create a strong cost and performance position that their competitors in China and other developing nations cannot easily match.
Experts in technology and innovation at PA Consulting Group, note that: "many of our clients are making significant investments in new automation and manufacturing process technologies which significantly reduce the labour element of the overall product cost. We have worked with a number of clients whose margins, even for commodity products, have been dramatically increased through implementation of innovative approaches such as end-of-line customisation, product personalisation or in-line process control and inspection."
Our advanced manufacturing experts suggest that: "in our experience, those who are truly successful at exploiting advanced manufacturing also demonstrate the ability to work effectively with external manufacturing technology providers; rapidly reconfigure their supply chains to take advantage of new opportunities; and make significant investments in the right mix of manufacturing skills and capabilities. Without these key capabilities, investments in advanced manufacturing are not likely to pay off in the long run".
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