Companies advised to outsource work to solve productivity problems

One of the bosses of a manufacturing collective, believes the answer to the "productivity puzzle" could rest in more firms focusing on their core competences.

Adam Cunningham, a member of the Midlands Assembly Network and managing director of Muller Redditch, says a growing number of companies choosing to outsource some of their manufacturing capabilities in a bid to reduce costs, improve efficiencies and open up capacity. More than £3m of new projects have been taken on across the MAN in the last twelve months, with a number of members working together to deliver added value and new production solutions for clients in automotive, aerospace, oil and gas and renewables. There are another six opportunities currently in the pipeline as more businesses look at new ways of boosting their productivity.

Mr Cunningham said: "The productivity puzzle is probably the industry topic of the year and a lot has already been written about how to solve it, either by investment in automation, investment in skills or investment in systems. These are all very valid. However, there has been little discussion about outsourcing, where you source a supplier to deliver your non-core manufacturing operations.

“As long as the right strategic partner is chosen, this offers numerous benefits, less unnecessary stock and reduction in work in progress, better cash flow and significantly reduced lead times. It also gives you greater flexibility for volatile volume requirements. The strength of MAN is that we have expertise across all engineering and manufacturing disciplines and our nine companies are financially strong and invest in world class processes. It’s no surprise we are seeing existing and new customers outsource more of their non-core operations to us. It makes perfect sense.”

The Midlands Assembly Network is a collective of eight sub-contract manufacturers and a specialist design consultancy who work together to win work at home and overseas.