Manufacturing sector calls for bravery and realism

Manufacturers must be both brave and realistic in their expectations as the UK returns to work. That was one of the key themes in the second national video conference hosted by national audit, tax, advisory and risk firm Crowe.

Johnathan Dudley, national head of manufacturing at Crowe, said: “From our call, it is clear that automotive and aerospace production schedules are likely to be significantly down for the foreseeable future.

“Callers noted that restart levels appeared to be between 20% and 30% of pre-lockdown levels and doubts were expressed that they would even hit 70% this year.”

Throughout the call, a number of suggestions were made in order to support businesses as they make their way back to work.

Crowe partner Ross Prince suggested businesses need to map through their supply chain and current process and look beyond to see how the world will look in the future.

While Andy Kay, corporate finance partner, said businesses needed to find and understand their true funding needs before looking at Coronavirus Business Interruption Loans or Bounce Back Loans.

Dudley continued: “There is a clear need to address the needs of the ‘new normal’ in the future, change the business model, think outside of the box and fund for change. Companies will need to carry out an assessment of excess in the business as they plan for any new requirements in the new post-Covid business going forward.”

He pointed out that ‘getting back on track’ would call for careful planning, funding and creative thought, with some bravery and realism included.

“Credit rating will be a crucial factor in survival. Businesses can no longer rely just on credit rating agencies or statistics. They need up-to-date management information that can be shared with suppliers and customers.  They all need to work as one team.”

He added that marketing and sales innovation would be key to how fast a company recovered and was able to take and hold market share. And he cautioned businesses about the rise of cyber threats that were prevalent and growing ever more imaginative.

In order to support the sector as it returns to work, Crowe has produced a guide to “Getting Back on Track” for UK manufacturers, which can be downloaded here.

Dudley said: “Our latest guide helps you to prepare, plan and take action to start up again smoothly, safely and profitably. This is accompanied by a checklist that you can download to help you to make important decisions for your business.”

Pictured: Johnathan Dudley