‘THE’ hot topic of 2020 in the manufacturing industry: Covid-19 recovery and what it means for b2b marketing
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:
- Portfolio optimisation – manufacturers are reinforcing the core of their portfolios, favouring focus over differentiation.
- Digital muscle – new digital initiatives hold promise for improving companies’ agility and scalability in the marketplace.
- Supply network ecosystem – manufacturers are increasing their flexibility in global supply networks by forging new business partnerships that add needed capabilities.
- Social responsibility – manufacturing leaders are finding ways to combine “doing good” with doing ‘well’, linking socially conscious initiatives with increased profitability.
A trawl through the key industry news websites highlighted the following big trends for manufacturing and engineering this year, and beyond:
3D printing /additive manufacturing
3D printing technology has strongly established its position in aerospace and automotive manufacturing during recent years with its flexible and powerful techniques. It’s set to further transform the manufacturing landscape in 2020, with building and construction, FMCG, and the fashion and fabric sectors being enticed by its advantages.
Augmented Reality (AR)
According to this article in The Engineer, Covid-19 has accelerated the use of augmented reality in manufacturing. Front line workers have embraced digital transformation to build ventilators, deliver crucial training to apprentices, and solve production bottlenecks on automotive lines. Now engineers have had a taste of the operational and financial benefits AR can deliver, it’s anticipated that we’ll see a major rise in adoption.
*NEED TO KNOW – Velo client Fortress is already using AR in its selling processes.*
These companies are internationally sourcing components from around the world, so as currencies fluctuate [which they are dong massively during the current climate] then things can get cheaper/more expensive much quicker – meaning it’s hard for manufacturers to predict costs. The USD is often an important currency market for this sector.
Industry 4.0 – or the 4th industrial revolution – has been a buzz ‘concept’ for the past few years but is already in existence in certain companies. It combines interconnectivity, automation, real-time data analysis, and machine learning to create smart factories and minimise the need for human intervention in manufacturing production. As a result of early successes, there has been an increase in companies looking to further explore and invest in these technologies; however, with current uncertainties, companies are shifting their efforts towards digital projects that will drive agility and scalability to manage risks in the current business climate.
IoT (Internet of Things)
Almost 70% of manufacturers believe that leveraging IoT development will increase their profit. With the help of IoT, manufacturers can boost the speed of production, improve the product quality, and improve cost-efficiencies. By 2022, manufacturers are expected to invest up to $45.3bn in IoT implementation.
Robotics & automation
Cobots – ‘collaborative robots’ – seems to be the buzz word for this year. Cobots provide a reduction in the overall cost of manufacturing and enable a fast ROI – hence, they are being adopted by both SMEs and large manufacturers, across all major industries. A Manufacturing Automation & Robotics Summit was scheduled for 14 May by The Manufacturer magazine, and ‘Robotics & Automation’ is a key topic on every media/news site for the sector.
The manufacturing industry’s skills shortage is acute and well-publicised: approximately 186,000 new engineers and manufacturers are needed every year until 2024, but the industry is currently facing a deficit of 20,000 graduates annually. [Source: Manufacturing Management magazine, p19 article]
Brexit doesn’t help matters, as many manufacturing shop floor workers are from the EU so Brexit is going to make it harder to attract quality staff.
On the positive side, Women in STEM is an initiative to showcase the different opportunities for women in the STEM (science, technology, engineering & math) sectors, while also trying to bridge the stereotypes of STEM subjects and close the gender gap. Lots of companies and industry bodies involved and supporting the work they do.
Unsurprisingly, the environment and green credentials of a company is a key priority for Millennials and Gen Z, and manufacturing doesn’t have a good rep for being ‘clean’, so doing things in a cleaner, greener, more sustainable way is suddenly becoming a key focus for the sector as it looks to attract new blood through its doors.
What does this all mean for industrial b2b marketing professionals?
Brand is so important – managing your reputation, internationally through supply chain remains an absolute key priority.
- 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
- 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.