Henry Ford, one of the most successful manufacturers the world has ever seen, is famed for the quote in this article’s headline. Whilst Howes Percival operate in the professional services sector, where quality of service is fundamental every time, it is equally important in a manufacturing business. Quality manufacturers are a fundamental part of Northamptonshire’s business community – from food and drink, precision engineering, high-tech automotive manufacturers to possibly the most famed of them all (in Northamptonshire), the footwear industry. Each of the above (and many others beside) live and die by mottos similar to the one posed above by Henry Ford – alas, you are only as good as your last job!
- Each manufacturing business in the county will know how important it is to maintain those high-quality systems, processes and procedures that have been developed over the course of, in some cases, generations. I’ve been lucky enough to visit a number of our key manufacturing clients over the last few months who are specialists in their own fields, and I’ve been able to pick up a few common themes that span various manufacturers:
- We don’t shout about our successes enough – we genuinely have some of the most exciting, diverse and talented manufacturers based in our county, and yet many go under the radar. Where else in the country would you find, juxtaposed, an award winning, nationally renowned gin distiller (like Warner’s Distillery) alongside the manufacturing base of one of the most successful F1 teams in history (Mercedes), intertwined with a whole array of internationally renowned shoe brands (Crockett & Jones, Grenson, NPS Shoes, Cheaneys…. the list goes on!). We can and should do more to celebrate our manufacturing success stories, whilst supporting those in their growth stages too.
- AI/tech is coming but it has a time and a place – no one can deny that artificial intelligence and technological advances have already, and will inevitably continue to, become commonplace across manufacturing industries in the county and further afield. Many of our clients are embracing that technology, but others are more cautious and acknowledge that there are some jobs that simply cannot replace that human influence. Shoe manufacturing techniques carried out in Northampton over hundreds of years cannot and arguably should not be replaced by tech (or at least not completely!).
- Don’t take your workforce for granted – it’s becoming harder to recruit and retain talent in a whole host of industries, but manufacturing can often see quite a high turnover. Those bucking the trend are those which have carried out succession planning and have been able to pass on vital skills, trades and ways of working; have embraced and developed a culture and working environment that staff want to flourish within; which offer the chance for progression; and which value and encourage employees’ input on strategy and the development of the business.
- Know when to engage for help, guidance and feedback – seeking professional guidance and support is vitally important, and it should be done alongside those in your supply chain. Regular visits to your accountant and lawyer, as well as with your customers and suppliers, engaging with them for guidance, help and support, will ensure that all products or services can be delivered in the most efficient, cost effective way for all parties.
- ESG is more than just a tick box – some might see it as a ‘buzz phrase’ at the moment, but ESG is much more than that. The drive to become more environmentally aware, more sustainable and to act in a responsible and ethical manner is something that customers, suppliers, investors, employees and, in fact, business owners themselves want to see and deliver. Long gone are the days where you have an environmental committee just to tick a box on a tender form. In fact, quite the opposite – consumer habits are developing around sustainable business, often accepting to pay more if a business genuinely has ESG at the heart of its operations. For those looking for financial benefits too, we are seeing ESG being front and centre of acquisition/investment strategies, with funding packages designed for certain sectors who can showcase certain sustainable and ethical business practices, and indeed ESG focussed businesses can often drive higher exit multiples for shareholders.
- It is a tough old world out there, but there are deals to be done – the last few years have been tough on manufacturing businesses. Brexit, Covid-19, the war in Ukraine, fuel shortages, the cost-of-living crisis, general economic uncertainty… the list goes on. All of the above have led to supply and demand problems for those in manufacturing, with difficulty in sourcing materials, stockpiling, and the costs of materials and manufacturing increasing exponentially. But, if you’ve managed to stay afloat, and still be making a profit, the positive news is that the corporate M&A market appears to be holding up pretty robustly, with cash available to fund deals of varying shapes and sizes. PE funds want to lend, trade buyers want to grow and business owners continue to assess their options for exit.
The overarching theme – we are fortunate to have such an array of high-quality, resilient manufacturing businesses on our doorstep, and we at Howes Percival are lucky enough to be working alongside a fair few in the county. If you think we could help you, or you want to share your views on the challenges or opportunities facing the manufacturing industry, feel free to get in touch.