A running theme across the sector is that manufacturers will need to ‘thread the needle between uncertainty and opportunity’ this year.
Trade association Make UK has reported the UK manufacturing sector is set to take one of the biggest hits from COVID-19, with industry output expected to fall by 55% in Q2 of 2020. 37% of manufacturers have stated that they do not expect trading conditions to return to normal for 6-12 months, with an additional 17% not expecting conditions to return to normal within a year.
A key challenge is how they reorganise shop floors again with social distancing, as the factories are not laid out to support it at the moment [all factories are designed to optimise space], so they’re being forced to put in LESS workers which means LESS output possible. The knock-on for marketing is the order book can only handle so much….
But even if manufacturers could operate at full capacity, the impact of Covid on the global supply is choking operations, with the supply of raw materials and components harder to come by (particularly if coming from China).
A report in April by Engineering & Technology says activity in much of Asia is beginning to return to earlier levels “but slowly – and cautiously”. China is looking to re-ramp output as the world’s largest volume manufacturer – but the process is necessarily gradual.
However, it’s not all doom and gloom – Make UK has outlined a three-point recovery plan, and growth opportunities do exist in some areas of manufacturing – protective personal equipment (PPE) and industrial cleaning, for example. Industrial safety could certainly remain more buoyant than some areas of manufacturing.
Webinars about getting back to business and taking advantage of technology are also popping up, largely promoted on LinkedIn, and mainly run by ‘industry experts’ or ‘industry media’. A massive point regarding webinars is that manufacturers sell through distributors and tend to recruit them via industry shows.
Sadly, industry events are screwed, so they’re doing webinars and realising that these can give them access to more customers quicker and globally, at much lower costs. BUT, only if they have customer databases, a well known/respected brand, and something worth saying. Many do not have customer databases.
Key trends in manufacturing for 2020
Many of the top trends from the past few years remain front and centre in 2020 – disruptive technologies, digital transformation and robotics and automation – with some even fast-tracking up the priority list due to the uncertain climate.
Although written before Covid-19 fully took hold, the Deloitte 2020 Manufacturing Industry Outlook, published in March, gives a good indication of what the manufacturing industry can expect in 2020:
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- Portfolio optimisation – manufacturers are reinforcing the core of their portfolios, favouring focus over differentiation.
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- Digital muscle – new digital initiatives hold promise for improving companies’ agility and scalability in the marketplace.
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- Supply network ecosystem – manufacturers are increasing their flexibility in global supply networks by forging new business partnerships that add needed capabilities.
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- Social responsibility – manufacturing leaders are finding ways to combine “doing good” with doing ‘well’, linking socially conscious initiatives with increased profitability.
- Digital activity is on the rise over traditional events, causing skill gaps. Sales teams are having to learn to adapt to less face-to-face meetings which is often hard as sales people tend to be very specialist with many years/decades of experience in that sector.
- Webinars – hot subject at the moment, but many don’t know what makes them successful or what topics to focus on. We’re learning that to launch successful webinars four conditions are needed:
- Your brand must be known
- You must have customer lists who have heard from you before
- You must have content that you need to know about, ideally aligned to a standard/accreditation
- An engaging/well-known speaker helps but the manufacturers brand trumps every time.
- Customer details – the shift to digital relies on customer data which is often in a poor state, badly stored and hard to use, which is becoming more and more of a problem during Covid-19
- Long purchase cycles and challenges on throughput means activity plans can be more long term and less tactical. As staff return to work post furlough in UK, social distancing means factory floors have to move from being super-efficient spaces with everything packed in, to including social distancing. This means that lower levels of through-put are possible. This can temper marketing ambition. But there is an opportunity for integrated marketing activity to support sales people including ABM and updated brand comms.
- Innovation stories are everywhere but often under communicated or not seen as anything worth shouting about. There is a real opportunity to help uncover these and tell them to a wider world.
- Events may not ever be the same again – Most of our clients have attended global events with international audiences (just the nature of being so “niche”). With social distancing policies in specific countries being different due to different post-covid19 recovery strategies, and cross-border arrivals facing quarantines for arrivals, the word on the street is that global events are going to be forced to evolve. They are likely to be replaced by one nation events which of course mean a much smaller audience size, and a much harder ROI justification if clients go. This will push the international manufacturers to develop and push their own channels as large events will no longer be there as an option.