New research shows that manufacturers could improve non-labour resource productivity and cut costs without significant investment, but many are failing to grasp the opportunity.
Resource Efficiency: A Missed Opportunity in Manufacturing, produced by The Manufacturer magazine in association with resource efficiency initiative Manufacture 2030, suggests that focusing on non-labour resource efficiency could be the answer to boosting the UK’s poor productivity in a time of low capital investment.
With energy prices set to rise steeply between now and 2020, manufacturers can expect an increase in production costs from energy alone. This is compounded by the fact that the proportion of input costs from energy is rising as factories become more automated. Manufacturers can also add to this maelstrom the issue of fluctuating materials prices and the rising costs of water and waste management.
These trends contrast sharply with the research findings, which show that over a third of manufacturers do not set energy or resource efficiency targets and therefore have no means of measuring improvement.
‘Move to systematic management’
Speaking to The Manufacturer, managing director of Manufacture 2030, Martin Chilcott, said: “The UK industry average for resource efficiency is a paltry one per cent, well below the seven per cent best-in-class gains available.
“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.
“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.”