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4th May 2016
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Optimised Inventory Can Help Manufacturers Beat the 2016 Slowdown


Market insights from January 2016 show growth in Britain’s manufacturing sector has slowed to a crawl. That means while growth is still achievable, only the smartest, most efficient businesses will get there.


In other words, now is the time to work on improving performance. We believe optimising inventory is one of best ways to do that. Here is our take on the current situation and what UK manufacturers can do about it.

Approaching stagnation


The manufacturing slowdown was confirmed by two sources: The Markit PMI and the British Chambers of Commerce.


Data from the British Chambers of Commerce Q4 2015 Quarterly Economic Survey showed key manufacturing balances were weaker in Q4 2015 than in Q3. Based on responses from almost 7,500 UK businesses, the survey also showed sales and orders were below pre-recession levels of 2007.


The decline of export manufacturing balances to “levels approaching stagnation” was “particularly worrying,” said BCC.

Manufacturers’ challenging 2016


The Markit UK manufacturing PMI (Purchasing Managers’ Index) also fell to 51.9 in December 2015, down from 52.5 in November and 55.5 in October. It shows a troubling trend of declining growth.


“2016 is also likely to be challenging for manufacturers,” said IHS Global Insight economist Howard Archer. All signs point to tough times ahead.

Time to get the facts on inventory


So what can manufacturers do to buck the trend?


In a climate like this, it is always the most efficient and dynamic businesses who thrive.


A critical area of opportunity for manufacturers is within inventory management. Many companies use non-scientific, rule-of-thumb methods to balance inventories. This weak leak in your supply chain can really damage growth by wasting crucial cash resources.


At Hexagon Consultants, we have seen time and again that an inventory approach based on facts and proven methods transforms businesses. And we have led inventory optimisation projects that have added significant value to manufacturing companies. (Read about our manufacturing consultancy services.)


So while everyone around you is struggling with the manufacturing slowdown, we see an opportunity to outperform your competitors and take the lead.


If you would like an informal chat about our inventory optimisation methods, please contact us.