< Previous30 East Midlands Business Link www.eastmidlandsbusinesslink.co.uk MATERIALS AND COMPONENTS © Shutterstock /FrameStockFootages Industrial step change 30-33.qxp_Layout 1 05/03/2021 16:10 Page 1www.eastmidlandsbusinesslink.co.uk East Midlands Business Link 31 MATERIALS AND COMPONENTS The manufacturing and engineering industries are crucial to our economy, providing tens of thousands of jobs and helping to maintain the ‘Made in Britain’ brand on the world stage. But both industries are beset by challenges, whether keeping up with the rapid pace of technological change, taking steps to address staff shortages, or contending with the continuing fallout of the coronavirus crisis. As with other industries, the widening skills shortage has occurred as older workers reach retirement age, with a dearth of younger workers to replace them. In effect, it has created a bottoming out at both ends of the talent pipeline. As we’ve already specified, one of the key challenges facing these industries is keeping up with technological change. Innovation is part and parcel of the manufacturing and engineering industries, and while the “if it’s not broken, don’t fix it” attitude can sometimes be prevalent, these sectors are by their very nature forward thinking. Searching for a more advanced, efficient or environmentally-friendly component, material or process is only natural. To that end, there has been a shift towards advanced manufacturing which, simply defined, means embracing and deploying new technologies, improved processes and management methods. This embrace of new technologies brings together a range of adjacent and complementary industries together – for example, digital technologies with more traditional sectors such as steel production. Once the preserve of futurists and the video games industry, both virtual reality and augmented reality are becoming a more common sight in the manufacturing and engineering space from design to training. For example, designing a new component used to occur on technical paper, with compasses, perimeters and rules. Later, it took place in computers with the advent of digital design tools. Virtual reality takes this process a giant leap further. Now designers and engineers have an immersive three-dimensional space where they can interact with 32 Á Embracing new technologies are helping the engineering and manufacturing industries offset some of the major challenges they’re facing. 30-33.qxp_Layout 1 05/03/2021 16:10 Page 232 East Midlands Business Link www.eastmidlandsbusinesslink.co.uk MATERIALS AND COMPONENTS a new product in real time and from every conceivable angle and direction. Virtual reality is also benefit training. Rather than having apprentices or new starters beginning with and practicing on existing machines – which might be needed or be costly to repair if broken – they can instead use virtual reality. Although not commonplace across the industry, it is growing in popularity, particularly as a means of attracting younger workers. Augmented reality is also having a greater impact on the manufacturing and engineering industries from plant management to design and prototyping. While virtual reality allows an engineer to design in an immersive environment like never before, augmented reality allows a designer to see how a new component would fit and work in an existing machine without ever having to build a costly physical prototype. As the name suggests, it offers an augmented version of reality, so through a tablet camera, an engineer can see existing machinery and equipment but can overlay digitally designed components and additions and see exactly how they will work or, just as importantly, if they don’t. Rather then having to go and redesign and produce another prototype, the digital version can instead be adjusted until it fits and works as desired. Then a physical protype can be printed. The cost-savings during design and prototyping can be huge but, of course, any virtual reality or augmented realty system and design software will require a significant investment. As with any expense, the initial cost must be weighed against the long-term savings in both time and cost. Perhaps the most ubiquitous example of advanced manufacturing, certainly the one which has proved most popular to date, is additive manufacturing. More commonly known as 3D printing, this approach has several applications in the prototyping stage where it can offer a quick and low-cost alternative in the design and development of new components, materials and parts. The biggest advantage of additive manufacturing, however, is the sheer precision it can offer. Any model designed in a computer can be perfectly replicated by the printer head in the desired material. This makes it particularly advantageous for manufacturing and engineering companies for producing small precision pieces. Often these can be costly and time consuming to produce, and their success isn’t always guaranteed. But 3D printing offers machine-precision, digital design and time savings. As the technology continues to develop, printing times will become quicker, more efficient and versatile. What companies might not consider, however, is that 3D printing can result in © Shutterstock /Gorodenkoff 30-33.qxp_Layout 1 05/03/2021 16:10 Page 3Need help handling your hazardous waste? Call our specialist hazardous waste team on 0345 337 5050 or visit ward.com/hazardous-waste for advice or a free quote. www.eastmidlandsbusinesslink.co.uk East Midlands Business Link 33 MATERIALS AND COMPONENTS huge time and cost savings when it comes to repairs. From fixing equipment, to restoration projects, sometimes it just takes a single component to up the budget and result in periods of downtime. But with additive manufacturing, a company can print out the component needed, often in only a fraction of the time or cost. This also makes it ideal for conducting repairs in-house, rather than having to send away for a specific part. The downside is that schematics might not always be available. Although the manufacturing and engineering industries are facing their fair share of challenges, there are a number of hugely exciting developments and innovations in response. Disruptive new technologies and a greater push towards advanced manufacturing is making the design, development and use of materials and components better than ever before. The onus now is on securing a new talent pipeline and stemming the skills shortage once and for all. 30-33.qxp_Layout 1 05/03/2021 16:10 Page 434 East Midlands Business Link www.eastmidlandsbusinesslink.co.uk PUBLIC RELATIONS What if I told you that there’s a secret customer that you’ve missed? A customer that might well have been sniffing around your website and your social media profiles for ages. A customer that is incredibly powerful with the ability to open the floodgates to your lead generation and marketing? I guess you’d want to sell to them right now wouldn’t you? Of course you would! The problem is this customer rarely buys directly from the supplier but can get It is Porter who your customer listens to on the radio, on the drive into work or whilst you’re making breakfast. It is Porter who fills your TV screens all morning with information he or she chooses to let you see. It is Porter who controls so many of the messages that arrive in your inbox and yes, it is Porter who commands the greatest share of voice in your social media feeds. This “Porter” is a chameleon with a very influential job. Porter is a journalist, a blogger, a TV producer, a researcher, a Meet R. E. Porter - the most powerful customer you keep ignoring By Greg Simpson, founder of Press for Attention PR and Enterprise Nation Champion for Nottingham. thousands of others to do just that. You’d be mad not to at least think about how you can attract this customer wouldn’t you? I am going to give this customer or this mystery ‘broker’ a name but in reality, this broker is not just one person, this broker is legion in number with the power to command the attention of your entire market. Let’s unmask this figure that is lurking in the shadows, shall we? In fact, let’s give it a name. This customer goes by the name of R. E. Porter. 34-35.qxp_Layout 1 05/03/2021 16:11 Page 1www.eastmidlandsbusinesslink.co.uk East Midlands Business Link 35 PUBLIC RELATIONS features editor and a booker of interviews on the airwaves. Porter is pulling the levers of the media machine and greasing the wheels of your competitors marketing campaigns. Why is this happening? Why is Porter only ever listening to them? Why does Porter never find out about you? It’s time to take a look at your website through the eyes of a different customer. Seriously, what are you doing to ensure R. E. Porter knows about you? Can Porter see your backstory? Does Porter know who your ideal customer is and who you serve best? Can Porter see your face on your website and can Porter easily discover what it is you know about better than anybody else? Can Porter find articles about you on other websites or take a look at your blog or knowledge centre to discover that yes, here is someone I can trust and who has something to say to MY CUSTOMERS? That is what Porter is seeing. Porter’s appetite for content is insatiable, it feeds Porter, it sustains the media machine but all too often, Porter has to eat at the same table every night with the same dull company and the same boring recipes. Porter could well be your best customer, your biggest influencer, but right now, you’ve probably given Porter no thought at all. Now is the time to change that. If you are looking at your website with a fresh pair of eyes, let me know if you fancy a second look from someone who knows Porter very well. After all, I used to go by that name too. 34-35.qxp_Layout 1 05/03/2021 16:11 Page 236 East Midlands Business Link www.eastmidlandsbusinesslink.co.uk FINANCE In the wake of so many lockdowns, many businesses have been more cautious and have made cost-saving measures – such as searching for cheaper suppliers or letting go of some suppliers altogether. Elsewhere, companies have lost contracts and longstanding clients as other companies seek to reduce overheads or have been forced to shutter their operations in the wake of the outbreak. On its own, this weaker cashflow would be a major hindrance, but it comes amidst an already established culture of late payments that has pervaded the corporate world for years. A study from the Federation of Small Businesses (FSB) shows that sixty-two per cent of small businesses have been subject to late or frozen payments in the wake of the outbreak. Only ten per cent of those firms surveyed have agreed to payment terms with clients, meaning most of this fresh wave of poor practice has not been formally signed-off by creditors or debtors. Indeed, late payments contribute to 50,000 insolvencies every year, costing the economy £2.5 billion. If it was an issue that businesses were contending with before the outbreak, it’s only been heightened in this ‘new normal’. However, there are ways in which a company can secure funding to cover the gap in cashflow posed by late invoices. Chief among these is invoice finance. This is the simplest means of releasing cash tied up in a businesses’ outstanding invoice. It sees a business sell its invoices to a third party who will advance some of the funds it is worth up front for a cut. Thousands of businesses already rely on this kind of financing to maintain a healthy cash position, whilst others use it to take back control of cashflow issues that arise from late and unpaid invoices – more so since Perhaps the biggest draw is that businesses can be paid most of an invoice within forty-eight hours instead of the typical thirty-day period specified on most invoices. Safeguarding businesses businesses There are many challenges and potential pitfalls to overcome for businesses as the pandemic continues to depress the economy. Although some of these issues have arisen as a direct result of the coronavirus crisis, the outbreak has exacerbated many pre-existing financial burdens, making difficult trading conditions more hostile for businesses. One of the biggest threats is that going forward cashflow is weak as outstanding and uncollected invoices build-up and there’s a halt the movement of products and services is halted. 36-39.qxp_Layout 1 05/03/2021 16:13 Page 1www.eastmidlandsbusinesslink.co.uk East Midlands Business Link 37 FINANCE Of course, this is far from the only finance solution businesses can draw from. Asset-based finance is a specialised method of providing companies with working capital and term loans that use accounts receivable, inventory, machinery, equipment and real estate as capital – essentially, any loan to a company is secured by one of that company’s assets. This option is commonly used to pay for expenses when there are gaps in a company’s cashflow, but it is also frequently used for start-up financing as well as refinancing existing loans, financing growth, mergers and acquisitions, as well as management buy- outs and management but-ins. Although it’s not suited to meet every business requirement, it can prove useful for those that have stretched their credit limits with vendors and reached lending capacity at the bank. Companies can also take out loans to fill the gap and bolster cashflow, though some companies may already be at their limit with their banks or otherwise don’t meet the requirements for securing loans with traditional lenders. In these situations, companies can turn towards alternative lenders and finance providers. Private equity, for example, is where investors provide long-term equity capital investment in a company in return for either shares, a percentage stake in the business and/or, sometimes, a seat on the board. Although many businesses might be loath to dilute their ownership, private equity does offer a good option of raising capital for businesses that aren’t ready to list on the stock exchange. Another form of private finance is an angel investor – a high net worth individual who makes use of their own personal disposable finance and makes their own decision about making an investment. Angels would normally take an equity stake in a business in return for 38 Á 36-39.qxp_Layout 1 05/03/2021 16:13 Page 238 East Midlands Business Link www.eastmidlandsbusinesslink.co.uk FINANCE providing equity funds. As well as capital, angels can also provide their experience, knowledge and contracts, making them especially attractive to early stage businesses. Every investor is different and will therefore provide differing amounts, but typical investments range from between £10,000 and £500,000, though deals of up to £2 million are becoming more commonplace as angels group together in syndicates. Although angels are one of the most significant investors in start-ups, that shouldn’t deter more established firms from making enquiries. It’s important to keep in mind that securing an angel can be a difficult and protracted process, as well as being harder to research and contact compared with a private equity firm. Although securing finance of one form or another is a way in which companies can strengthen cashflow, there are other options such as reducing overheads and operating costs and downsizing. Depending on the company and, indeed, the severity of the financial shortfall, this approach may be pursed independently or in conjecture with invoice financing or a loan. In this current financial climate, with the effect of the pandemic, and with the end of the furlough scheme forcing many employers’ hands, a lot of businesses may soon be looking at redundancies as a necessary way to improve and increase their cashflow. Payroll is often the biggest expense for a business so, in times such as these, it’s often one of the first places bosses or 36-39.qxp_Layout 1 05/03/2021 16:13 Page 3www.eastmidlandsbusinesslink.co.uk East Midlands Business Link 39 FINANCE © Shutterstock /Funtap financial advisors will look at to save money. It’s a simple but effective method – a company can save tens of thousands of pounds a year by letting staff go, be that through shuttering whole departments, or consolidating multiple job roles into one. Although nobody wants to lose their jobs, it’s often necessary for companies to take such measures to stay afloat and to continuing trading through this period of increased economy strain and uncertainty. However, it’s worth noting that there are other ways to cut payroll costs without letting staff go – such as cutting salaries, turning full-time staff into part-timers, cutting bonuses, enacting leaves of absences and shortening the working week. The coronavirus crisis remains an unprecedented and challenging time for businesses. As well as bringing its own unique set of challenges, it has also heightened many existing issues, making cashflow problems a more pressing challenge for businesses. In many cases, it has forced companies to take drastic measures to remain afloat and continue to navigate the ‘new normal’. Solutions include invoice financing and securing loans, be that from traditional lenders, from private equity providers or alternative finance, and making cost cutting measures in-house, such as redundancies. In any case, there exists expert advice to help inform business decision making so companies can make the best decisions to bolster cashflow and continue trading. 36-39.qxp_Layout 1 05/03/2021 16:13 Page 4Next >