03.04.2025
Efficiency strategies for manufacturers. How to stay competitive during a trade war.
In our previous article, we explored how manufacturers will need to respond to mounting pressures from tariffs, labour shortages and the accelerating pace of automation. While that piece focused on why change is necessary, this follow-up takes a deeper dive into how manufacturers can act strategically. With new trade barriers re-emerging and uncertainty still shaping boardroom decisions, the focus has now turned to operational efficiency — not just as a goal, but as a competitive necessity.
With renewed tariffs imposed by the United States — including a 10% duty on UK-manufactured exports such as machinery and electronics — manufacturers are once again contending with geopolitical headwinds that directly affect operational planning and long-term strategy. While the UK has been treated more favourably than the EU in this first round of trade tariffs, the message is clear: uncertainty is the new constant. For manufacturing leaders, the central question is not merely how to survive these pressures, but how to build lasting efficiency and agility in a shifting landscape.
Efficiency in this context must go beyond lean principles and bottom-line savings. It requires strategic rethinking across supply chains, technology platforms, energy use and skills development. Below, we explore the areas where forward-thinking manufacturers are making gains — and where some are still holding back. These manufacturing efficiency strategies are increasingly essential for businesses aiming to remain competitive.
Rethinking supply chain strategies
The current global trade environment has exposed deep vulnerabilities in long-established sourcing models. Reliance on distant suppliers, especially those affected by changing tariffs or geopolitical tensions, has introduced costly delays and unpredictability into otherwise stable operations.
Recent data reflects a shift in mindset. According to Make UK and BDO’s 2024 Manufacturing Outlook1, over 80% of UK manufacturers are now actively assessing supply chain risks as part of standard business planning — a dramatic increase from pre-pandemic levels. In parallel, 31% of companies surveyed said they now consider the UK more competitive than major European counterparts, reflecting renewed interest in domestic sourcing and localised production.
This trend toward reshoring is underpinned by economic commitment. A recent report in The Times2 suggests that UK firms are planning to invest as much as £650 billion in re-establishing domestic production over the next three years. For larger manufacturers, this is likely to include retooling legacy sites, expanding UK warehousing capacity or investing in regional supplier development to strengthen the local ecosystem.
For many businesses, the goal is not complete self-sufficiency but the ability to flex and pivot when trade conditions demand it. Efficient supply chains today must be modular, data-driven and geographically diversified enough to absorb shocks and maintain service levels.
Automation that adds agility
Automation continues to be a vital lever for productivity but the smartest manufacturers are now looking beyond simple throughput gains. The focus is shifting toward automation that enables responsiveness and supports product variability, rather than locking operations into rigid mass-production models.
In 2023, UK robot installations3 grew by over 50%, largely driven by the automotive and packaging sectors. However, the UK still ranks 24th4 globally in terms of robot density4, with only 111 robots per 10,000 employees. For comparison, Germany deploys nearly 400 per 10,000. Despite a clear upward trend, there remains significant headroom for UK industry to automate more comprehensively.
The efficiency gains from automation are increasingly tied to integration. A robot on a line is valuable, but a connected, data-enabled system that communicates with SCADA and MES platforms delivers far more. Real-time insights can help identify micro-stoppages, signal predictive maintenance, and trigger immediate production adjustments — all of which contribute to higher uptime, reduced waste and faster order fulfilment.
Importantly, many manufacturers are now choosing flexible automation, such as collaborative robots or reprogrammable cells, which can be quickly adapted for short-run production or last-minute changeovers. This level of operational agility is becoming essential, particularly for suppliers to OEMs working in volatile markets.
Energy and resource management
Energy efficiency is also rapidly moving up the agenda — not just as a sustainability goal but as a key operational differentiator. With rising utility costs and increasing scrutiny over industrial emissions, managing energy and resource consumption is both a financial and reputational imperative.
The industrial sector accounts for around 20%5 of the UK’s total energy use and contributes roughly 14% of national carbon emissions. Against this backdrop, the government’s net zero targets and rising energy prices are driving a reassessment of how factories consume electricity, gas, water and raw materials.
Manufacturers can now access a range of technologies to support efficiency. Smart metering, sub-metering and real-time energy dashboards are providing clear visibility into peak consumption patterns. This makes it easier to shift energy-intensive operations to off-peak times, or to uncover anomalies that signal mechanical inefficiencies. Predictive maintenance, driven by sensor data and machine learning, is also helping reduce waste by identifying early signs of wear, leaks or miscalibration.
There’s also an increasing move toward closed-loop systems — for instance, recycling cooling water, capturing heat from exhaust systems or reusing by-products from one process in another. These measures not only reduce environmental impact but can also improve margins at a time of tight input costs. Each of these actions forms part of a broader set of manufacturing efficiency strategies that deliver value both operationally and commercially.
Using data to make better decisions
The modern factory generates a wealth of data but too often that information remains siloed, underused or simply invisible to decision-makers. Efficiency now depends on turning that data into insight and insight into action.
Edge computing and IoT devices have made it possible to collect real-time information directly from machines, lines and workstations. Combined with analytics platforms, this data allows businesses to model and simulate new processes, anticipate equipment failure and understand deviations in output before they result in waste or customer dissatisfaction.
Some manufacturers are investing in digital twins to virtually test changes in layout, scheduling or throughput before deploying them physically. Others are using AI to run predictive models based on past orders, helping planners match labour and materials more accurately to demand.
The shift toward data-driven manufacturing is beginning to show results. A 2024 report by The Manufacturer6 found that companies making significant use of data analytics saw an average of 12% improvement in OEE (overall equipment effectiveness) over 18 months, alongside lower unplanned downtime and faster reaction times to quality issues.
However, the challenge remains not just technical but cultural. For data to be effective it must be accessible, trusted and actionable by teams on the ground as well as in management. Building this fluency across the organisation is key to unlocking the full value of connected operations and embedding sustainable manufacturing efficiency strategies.
Investing in people as well as systems
While digital transformation is accelerating across the sector, the shortage of skilled workers threatens to constrain progress. As of Q3 2024, UK manufacturing reported 61,000 vacancies7 — many of them in roles requiring digital literacy, programming or advanced technical training.
The skills gap is most pronounced in areas directly linked to smart factory initiatives, including industrial automation, control systems, robotics and data science. In response, 75% of manufacturers surveyed by Make UK have launched or expanded reskilling initiatives, with a focus on training existing staff to take on more technology-driven roles.
These programmes are not limited to engineers. Line operators are being trained to interpret machine data, adjust settings based on performance feedback and contribute to problem-solving discussions. This cross-functional approach is helping teams work more collaboratively, reduce stoppages, and take ownership of continuous improvement efforts.
Upskilling is also emerging as a retention strategy. In a tight labour market, companies that invest in employee development are better able to attract and retain talent. For leadership teams, the message is clear: workforce capability is no longer a side concern — it is a strategic asset and a core pillar of modern manufacturing efficiency strategies.
The case for cautious optimism
Despite strong momentum in many areas, there remains a palpable sense of caution among some manufacturers. A number of senior leaders, particularly in capital-intensive sectors, are choosing to delay large investments in plant, equipment and expansion. The rationale is political. With a new administration already installed in the White House as of 2025, some business leaders believe that the tariffs now in place could be reversed by a future change in government. Others are hoping that trade policy will soften before they commit to major capital expenditure programmes.
Given that most new manufacturing plants take between 18 and 36 months to plan, build and commission, any facilities breaking ground in early 2025 may only become operational towards the end of the current presidential term. If a new administration is elected in 2028 and decides to reverse these tariffs, manufacturers who invested heavily in reshoring to the United States may find themselves overcommitted to a cost structure no longer justified by trade conditions.
This strategic hesitation is being echoed globally, as some political leaders have gone as far as to declare the end of globalisation. While that sentiment remains open to interpretation, what is certain is that current market volatility is prompting governments to re-evaluate their trade dependencies. In several regions, pressure is mounting to de-escalate tariff regimes in order to stabilise markets and encourage recovery. Many export-driven economies are already signalling a willingness to negotiate in the face of economic headwinds. That in itself is a reason for manufacturers to pause before committing to structural change.
Added to this is speculation that the White House may be using market disruption to apply pressure on the Federal Reserve to lower interest rates. This move could help refinance the significant volume of US government debt maturing in 2025. If such a rate cut occurs, it could temporarily stimulate economic activity and ease borrowing costs for capital projects. However, manufacturers are aware that such a move may be politically motivated and short-lived. Acting prematurely on the basis of potential monetary easing could expose businesses to further financial risk if conditions shift again. The result is greater caution in boardrooms, as executives weigh short-term gains against long-term stability.
As a result, several multinational manufacturers, particularly in electronics, automotive and consumer goods, are opting for more flexible or incremental mitigation strategies. These may include leasing and retrofitting existing facilities, partnering with US-based contract manufacturers, or using tariff deferral and bonded warehouse schemes. Others are diversifying sourcing strategies, building parallel supply chains, or investing in regional manufacturing hubs that provide optionality without the full commitment of a geographic shift. Such approaches allow companies to maintain market access without locking themselves into long-term infrastructure projects that may not align with trade realities five years from now.
The dilemma highlights the need for a balanced strategy. While delaying transformation efforts may appear to minimise risk, it can also mean falling behind more agile competitors who are actively pursuing innovation, efficiency and supply chain resilience. Manufacturers that can find a middle path, through scalable modular investments and near-term operational improvements, will be better positioned regardless of the political outcome. Flexibility, not relocation, may prove to be the most valuable asset in this next phase of global industry.
Final thoughts
The manufacturing sector is once again being tested — not only by tariffs, but by labour constraints, rising costs, and geopolitical flux. Yet this moment also represents an opportunity for strategic renewal.
Driving efficiency today means investing in supply chain resilience, automation that enhances flexibility, energy practices that reduce waste, data systems that inform decisions and a workforce empowered to lead change. While caution has its place, hesitation must not come at the expense of progress.
Manufacturers that adopt a forward-looking posture, grounded in measurable gains and agile planning will be best positioned to weather uncertainty and capture new market advantages in the years to come. In short, those who adopt the right manufacturing efficiency strategies today will be the ones who lead tomorrow.
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Appendix: Sources and references
1. Make UK / BDO Manufacturing Outlook Q3 2024 – Over 80% of UK manufacturers now assess supply chain risks as part of standard business planning.
https://www.bdo.co.uk
2. The Times – UK companies set to invest £650 billion in reshoring domestic manufacturing over the next three years.
https://www.thetimes.co.uk
3. Automate UK – UK robot installations increased by over 50% in 2023.
https://www.automate-uk.com
4. Drives & Controls – UK ranks 24th globally in robot density with 111 robots per 10,000 employees.
https://drivesncontrols.com
5. IEA – United Kingdom 2024 Energy Report – Industrial sector accounts for ~20% of national energy consumption and 14% of emissions.
https://www.iea.org
6. The Manufacturer – Data analytics and OEE gains – Data-led manufacturers see average 12% improvement in OEE over 18 months.
https://www.themanufacturer.com
7. Barclays Corporate Banking – Skills Shortage Insight – 61,000 vacancies reported in UK manufacturing as of September 2024.
https://www.barclayscorporate.com
8. Reuters / FT – Delayed investment examples – AstraZeneca cancels £450m UK vaccine plant; delays in energy project investments due to transformer shortages.
https://www.reuters.com
https://www.ft.com
