Smart finance for a competitive edge by Neli Ivanova, Head of Sales, Asset Finance, Siemens Financial Services in the UK
Alongside other automation technologies, robots are helping with productivity and efficiency. But the UK still lags behind other G7 countries on its adoption of industrial robots. Neli Ivanova, Head of Sales, Asset Finance, Siemens Financial Services (SFS) in the UK explores how specialist finance can help support investment to keep UK manufacturing world-leading.
Automation is changing the face of global manufacturing and this is, in large part, driven by widespread adoption of industrial robots. These robots support more efficient, precise and flexible processes. On the factory floor the latest robotic automation technology performs a range of manufacturing tasks – welding, cutting, assembling parts, labelling, handling raw materials, product packing – using sensors, controllers and actuators.
The automotive and F&B sectors are the UK’s largest purchasers of automation technology respectively according to the British Automation and Robot Association (BARA). Automotive manufacturers, for example, can use robot grippers in modular production strategies to streamline assembly with incredible accuracy. Assembly lines are then easily adaptable to different vehicle variants making for a more efficient and flexible process. When it comes to sustainability much can be achieved by designing manufacturing processes to be less energy-hungry, less wasteful, and lower impact – and this includes at the smaller scale with intelligently implemented robots.
In F&B sales of individual robots sold to domestic manufacturers in the sector have been steadily on the rise, the industry saw a 21% increase between 2020 and 2021. Things have moved beyond the days of just end-of-line palletising, picking and packing. Manufacturers are now also making use of more advanced robotics earlier in the production process reducing errors and boosting throughput. In the packaging of delicate products like soft fruit for example, better gripper and vacuum technology has led to consistent quality and minimal waste.
It’s no surprise then that take-up of robots in global factories reached an all time high in 2021 according to the International Federation of Robots’ (IFR) latest World Robotics report. Well over 500,000 new industrial robots were installed, reflecting a growth rate of 31% year-on-year – well above pre-pandemic levels.
However, the UK lags well behind the adoption trend with installations down 7% and robot density the lowest of all the G7 nations. This contrasts sharply with the whole of Europe which saw a 24% increase in installations led by Germany (28%), Italy (17%) and France (7%).
Given the UK’s longstanding and robust manufacturing presence, manufacturers must consider the risks of delaying investment in robotic automation technology. If the gap continues to widen, UK businesses may lose the edge to their European competitors.
As argued by MAKE UK – The Manufacturer’s Organisation “the technology to turn the situation around already exists and the opportunity is significant.” In fact, a report from the UK government identified that the application of automation and robotics in UK industry could contribute £6.4 billion to the UK economy by 2035. However, even greater take-up of the technology would encourage further growth and contribute to improved industrial resilience, the creation of new roles along the supply chain and international competitiveness.
- Affording the investment amidst challenges
Geopolitical dynamics, supply chain disruptions and inflation are putting pressure on manufacturing economics. At the same time, the manufacturing industry across the globe is expected to invest in more sustainable technologies in order to meet climate targets. Manufacturers are facing a dilemma – their desire to invest in (and gain the benefits of) digitalisation is combined with a reluctance to commit capital against a backdrop of volatile markets and economic uncertainty.
FSME manufacturers especially may be deterred bythe sheer scale of capital expenditure required to adopt new technologies. That’s why smart financing solutions will be essential to accelerating this transformation and helping manufacturers move forward in their digitalisation and sustainability journeys.
Such techniques can step in and help bridge the gap between what a manufacturer can invest, and what is needed to see meaningful return on investment.
Smart financing is offered by specialist financiers who have a deep understanding and knowledge of the industry and relevant technology, and can enable the acquisition of technology and equipment for competitive advantage in a financially sustainable way, tailored to an organisation’s business and cash-flow needs. Specifically, smart finance makes investments possible and affordable by aligning costs with revenues.
Additionally, it offers three major advantages over generalist finance:
- Technology expertise - which leverages deep understanding of the technology & how it is applied in practice, plus the benefits & return on investment it delivers in real - world applications
- A breadth of financing solutions - which offers a true spectrum of financing products and solutions which can be flexed & customized to fit each organization's individual circumstances and
- Smooth, sophisticated processes - which put customer experience at the centre – delivering speed and ease, supported by digital tools, and availability of specialist experts
Robotics are already a staple of the manufacturing space, making processes faster, more efficient, and more agile. For the UK to remain at the forefront of industrial production further investment in robotic automation technologies is not only essential but urgent. While the initial costs of investment may be off-putting to some, smart finance is available to bridge the gap. With the help of specialist financiers like Siemens Financial Services, manufacturers can acquire new technology and maintain their competitive edge.