Restarting UK manufacturing will not be as simple as switching on the electrical supply and pushing the green button, sector leaders warn, following a national video conference hosted by national audit, tax, advisory and risk firm Crowe which was attended by manufacturers, members’ organisations and industry consultants.

Johnathan Dudley, Crowe’s National Head of Manufacturing, said “One of the key issues raised on the call, was that business is not simply going to go from standstill to 100% of previous production overnight. Many major companies such as JLR may start back at, say, 30% of previous capacity while they deploy and sell previously produced stock. This has massive implications for Original Equipment Manufacturers (OEMs) and their relationship with their supply chains.”

In order to tackle this key issue, Crowe is set to publish a “Getting Back on Track” guide in the coming weeks, which is designed to help manufacturers and their suppliers plot their route back into production.

The guide highlights the three key stages that businesses have to address. Stabilisation, followed by a commercial “health check” and finally, how to trade successfully in the “new normal, post COVID-19 era” and will be available to download from Crowe’s website (www.crowe.co.uk)

Concern was also expressed on the likely impact on employment if production trickles back, rather that starting up at previous levels.

With major businesses, such as airlines, laying off as much as 30% of staff, there are very real implications for the supply chain in the aerospace industry as orders dry up, due to airlines deploying aircraft from routes they have given up, or vastly reduced schedules.

Dudley said: “I, along with others, have been in regular dialogue with officials at the Department of Business, Energy & Industrial Strategy, calling for the Coronavirus Job Retention Scheme (CJRS) to be more flexible and extended if we are to avoid wholesale job losses.”

One senior industry figure commented: “The true cost of starting up manufacturing again cannot be underestimated and will have massive implications for cashflow and any future investment potential.”

The impact remote working is having and will continue to have moving forward had been previously highlighted by the industry, with many people believing that we may never see the same numbers of staff working in offices again, as remote working has forced employees to learn new ways of working and communicating, in many cases, with little impact, if any, on productivity.

Regional and board meetings by video would have tremendous implications for travel, hotel and restaurant costs, as more and more executives choose to communicate online rather than jump on a train, a plane or the motorway. Similarly, office space requirements could also come under the microscope in the future.

Ross Prince, partner at Crowe, said that while space planning under COVID-19 would have to encompass social distancing with health and safety issues, it was important that current requirements did not affect the long term efficiency of the business and were flexible and reversible where required.

Dudley summed the mood of the conference by saying: “We may not yet know what the ‘new normal’ will ultimately look like, but we do know that the way we do business is changing irreversibly.

“Manufacturers, more than ever before, will have to be innovative and light on their feet if they are to survive first and prosper going forward in this new industrial age we are entering.

“There is a fundamental need for the level of financial help for companies to be at a level that not only supports survival, but also enables them to trade forward and invest in the future.”

The video conference will be repeated at 12 noon on Friday 15 May 2020. If you would like to attend, contact Nathan Sanghera by email nathan.sanghera@crowe.co.uk or call 0121 453 1900.

Ends (579 words)

Contacts:

Miriam Sherwood, Senior Marketing Manager (Regions), Crowe. Tel: 0121 543 1900

Notes to Editors:

About us
Crowe is a national audit, tax, advisory and risk firm offering global reach and local expertise. We are an independent member of Crowe Global, the eighth largest accounting network in the world. With exceptional knowledge of the business environment, our professionals share one commitment, to deliver excellence.

We are trusted by thousands of clients for our specialist advice, our ability to make smart decisions and our readiness to provide lasting value. Our broad technical expertise and deep market knowledge means we are well placed to offer insight and pragmatic advice to all the organisations and individuals with whom we work. Close working relationships are at the heart of our effective service delivery.

For more information, visit: www.crowe.co.uk

• Follow Crowe UK on LinkedIn
• Follow Crowe UK on Twitter @CroweUK
• 
  Crowe industry recognition
• • 11^th largest firm in the UK by fee income (International Accounting Bulletin UK Survey, December 2018).
  • Top charity auditor (Charity Financials Audit Spotlight report and Charity Financials Audit Survey, 2009 – 2019)

• Leading advisors to the UK mid-market, ranked 9^th AIM and Main Market auditor (Corporate Adviser Rankings Guide, 2019)

• 9^th largest audit firm in the UK (FRC Key Facts and Trends in the Accountancy Profession, July 2018)

• Employment Tax Specialist of the Year (Global Payroll Awards 2019)