Digitalisation can improve productivity and profitability
Andrew Borland, Cheshire & Warrington 4.0 lead and Head of Commercial for the Virtual Engineering Centre
Confirmation that Stellantis is to invest £100million in manufacturing electric vans at its Vauxhall Ellesmere Port plant from 2022 is welcome news. The prospect of more deliveries being handled by UK-made electric courier vans, means cleaner air, less congested roads and a consequent reduction in CO2 emissions. And for our local manufacturing and supply chain businesses across Cheshire and Warrington, it holds significant new opportunities for growth.
Exploiting those opportunities will require businesses to change and innovate their processes and products. For some in the supply chain, there may also be a more profound need to adapt, or to “pivot” as those in the start-up community say.
This coupled with the fact that manufacturing, in general, is becoming an increasingly digital process, means it’s essential that SME manufacturers and their supply chain partners continue to explore and adopt new technological approaches. Cheshire & Warrington 4.0 has been established to help make this digital adoption a seamless experience.
As the saying goes: as one door closes, another opens. While the shift to electric vehicle (EV) production means an eventual end to the need for combustion engine component suppliers’ services, it also creates new demands.
Firstly, not all traditional components will disappear, far from it. EV’s still need interior trims, ancillaries, brakes, tyres and suspension. For the latter three, the additional weight of an EV battery pack presents an immediate opportunity for innovation.
Secondly, Brexit and the widespread disruption of COVID-19 have created an increased appetite for homeshoring and sourcing from the UK. This will be bolstered by the EU’s new country-of-origin rules which will dictate a much higher percentage of home-sourced material by 2027. This, paired with the UK Government’s commitment to supporting growth in national R&D to 2.4%, will create additional opportunities for domestic businesses.
There is also the irrefutable reality that just in time manufacturing is best served by reliable local businesses.
Thirdly, commissioning, assembly, and end of life of EV batteries also present opportunities. While in the immediate future the majority of batteries will be sourced from abroad, their assembly into packs is likely to be done on-site in the UK. That will require new tooling and fabrication. EV battery packs involve sensors, cooling systems, insulators, and conductors – all of which are sub-components that traditional suppliers could pivot into. At the other end of the life cycle, there will be new untapped opportunities for suppliers to be involved with battery pack recycling.
Inaction is not an option
The 2030 ban on ICE engines has accelerated change and the supply chain’s biggest challenge is being able to respond fast enough and boldly enough.
Now is a good time for affected SMEs to take stock over the summer shut-down period and consider how you could re-imagine your business and plan a strategy for achieving it using industrial digital technologies.
Established SMEs in the supply chain will have different strengths but in general, start with the fact that you probably have a good relationship with others upstream and downstream of you. If you do, then look at forming cluster groups of like-minded innovators. You all have assets, people, skills, kits, factories, certification, know-how and capital. What could your business and your cluster do that is new to capitalise on all of those? How can your assets be repurposed to break into the EV supply chain or what other growth industries could you add value to?
The bigger picture
The shift to EV production in the automotive market is emblematic of the wider, profound changes happening across all major industries as an investment in clean technology grows.
Manufacturing is integral to Cheshire & Warrington’s economy, supporting 45,000 jobs and contributing £7.7bn to the sub region’s GVA. Increasingly, digitalisation is the key to improving productivity and profitability and gaining a foothold in emerging corners of the market.
CW4.0 has been established to help manufacturers and supply chain businesses across the region’s diverse industrial base to do just that. We offer free, practical support which combines the collective industry knowledge and expertise of the Northern Automotive Alliance with the hands-on technical expertise offered by the Virtual Engineering Centre, LJMU and STFC.
Together we can help you ideate, explore, test and validate new ideas for how technology can help you deliver your ambitions. From designing and prototyping and testing new products to increasing efficiency and gaining new insights and advantages from data.
Based on the overwhelming success of our work in the Liverpool City Region, we know that even manufacturers with little prior understanding of digital technologies can benefit greatly from the support and facilities on offer in this scheme. Almost a third of businesses in Liverpool which we worked with to demystify digital technologies, saw revenue growth and 86% of these businesses developed and commercialised new products.
We’re keen to hear from you, to explore how digital technology can help you grow and adapt, whatever your industry or challenge.