SME’s & Supply chain

The Midlands is a manufacturing stronghold for SMEs, with over 24,070 such businesses in the region.

They are quick to respond to opportunities and challenges, and have an inherent agility and flexibility that is important to preserve.

However, whilst we see continued growth in logistics businesses due to the benefits of its central location, the Commission has heard evidence of a number of constraints that have restricted growth of individual SMEs, some perceived, and some real.

These include how companies access finance through uncoordinated support mechanisms and the bandwidth of business leaders. Other challenges come in the form of skills gaps in leadership and across the workforce to enable the adoption of new technologies and providing the support that encourages a confident and positive attitude to risk as SME’s balance the divergent challenges of finance, technology and strategy and move from survival mode thinking to seeking innovation and growth.

Many of the problems faced by SMEs have been recognised by local and national government, and a plethora of support mechanisms have been established, all with the best intentions. However, these support mechanisms are disparate, uncoordinated, and too complex to access for the leaders of SME’s.

In recognising the importance that SME’s play in the Midlands manufacturing ecosystem, we need to recognise the need for a multi-faceted approach help build the skills and confidence at all levels of the business alongside simplifying the financial mechanisms to help drive their growth to facilitate their potential to scale.

Supply chains are often viewed differently to the other elements of manufacturing and seen as ‘external’ to the organisation, where, particularly for the non-primes, there is less control and relationships are more at a ‘reactive’ level.

We need to encourage the view that being part of a manufacturing supply chain is a ‘good place to be’, and we need to articulate the attraction of moving from one sector to another.

The complexity of managing diversified supply chains is increased, owing to the lack of visibility created by disruption, but this should be seen as a positive rather than negative challenge with the potential to create greater added value.

We need to support the supply chain’s ability to move into new sectors and increase its agility and we need to promote local vs. global supply chains as we look to reduce our carbon footprint and support local, Midlands and UK based manufacturers.

To address this problem we need to think about the concept of ‘Total Value UK’ where local supply provides a greater societal impact through local employment, reduced logistics and carbon, greater flexibility and agility, and a significant opportunity to reduce waste through ‘just in time’ supply benefits.

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"Many Midlands’ companies would not label themselves innovative, yet they look for new ways of manufacturing their products, pivoting their business models or supply chain collaboration opportunities. That is why we know that the appetite to grow through innovation is there, but they often need more tailored, local support to help them see the market opportunities and future benefits."

Ewa Bloch

Innovate UK