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UK Aerospace under threat from global productivity demands

Posted 28 July 2015 · Add Comment

More than 62% of UK aerospace engineers believe that their companies face productivity issues that threaten the UK's position as a global aerospace superpower, resulting from an increasingly demanding and global aerospace market.

The Aerospace Report, from accountants and business advisors BDO, in association with the Institution of Mechanical Engineers has found that although many UK engineers have regarded UK aerospace manufacturers as ‘best in class’ in terms of productivity in the past, they feel that production rate ramp-up on some new aircraft platforms has changed that.

Critical mass in the supply chain is a key element for the success of British aerospace companies to win and deliver on a rapidly growing order book that is being driven by increasingly global prime contractors. With this in mind, the fact that 63% of those surveyed said that the UK needs more home-grown, mid-sized companies to secure the UK’s global pre-eminence in the aerospace market should come as some concern. This implies that only companies of a certain size have the capacity to win certain contracts even within the generally supportive UK supply chain. Only 13% of respondents believed that UK SMEs are sufficiently capable of coping with the growing demands of global prime contractors such as Airbus and Rolls-Royce.

The need to fulfil the new, higher production rates required by these prime contractors are highlighted as the main concern of aerospace engineers alongside the need to invest in research and development to remain competitive. Linked to these productivity concerns is the fact that 53% of companies experience difficulty with recruiting people trained in the disciplines they need.

The shifting pattern of the growth in global air travel is also a challenge to be addressed by UK firms. Respondents expect Asia to represent 55% of the growth in the global industry within the next two years. As a result, about two thirds of the companies surveyed are in the process of creating an overseas facility and, of these, 34% are building a base in China, demonstrating the need for companies to follow the prime contractors and shorten the supply chain.

Tom Lawton, Head of manufacturing at BDO, commenting on the report said: “The importance of mid-sized manufacturers to the future of the UK’s aerospace industry should not be underestimated. Aggressive ramp up rates are putting suppliers under enormous pressure and companies in the supply chain will need scale and resources to absorb this pressure over the longer term. To remain relevant and  successful companies must continue to invest for growth, in innovation to keep pace with developing platforms and in expansion overseas to address the desire to shorten supply chains.”

Dr Colin Brown, Director of Engineering at the Institution of Mechanical Engineers, said in response to the report:“In terms of SMEs working in the aerospace sector, Government needs support schemes that are focused and co-ordinated. Currently there are too many disparate initiatives co-ordinated by different departments. As last month’s Cole Commission report suggested, we need a one-stop-shop which co-ordinates and simplifies all the export support for SMEs. We also need to encourage more people to pursue engineering careers, whether that is through apprenticeships or University degrees, to keep key industries growing. ”

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