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Pioneering research offers huge savings potential for businesses

29th April 2022

Research undertaken within Northumbria University’s Newcastle Business School, has predicted the potential for £50m in savings, as an eight-year projection, for SMEs it has collaborated with.

The Research Interest Group (RIG), operating within the department of marketing, operations and systems (MOS), led by Dr Alireza Shokri, is now keen to broaden its impact with SMEs by reaching out to those operating within supply chains, to help them achieve significant cost-savings by providing the knowledge to address sustainability and increase business productivity and efficiency.

The Group is a frontline platform which shares knowledge and skill with service and manufacturing enterprises of various sizes across the UK and beyond. It has a national and international presence, working with bodies such as Advanced Manufacturing Forum (AMF), Chartered Institute of Purchasing and Supply and Chartered Institute of Logistics and Transport and Chartered Quality Institute.

By way of example of the impact it can have on SMEs, in 2021, the Group formed a strategic partnership with NBT Group, a North-East based supply chain solution company and Senseye Ltd, a digital predictive maintenance facilitator for global companies in a variety of sectors, to undertake a feasibility study. The aim of the project was to gain in-depth understanding of the potential for optimising predictive maintenance and supply chain processes and to lay the ground work for development of an integrated system.

Dr Alireza, Associate Professor in Operations and Supply Chain Management and Head of Subject group, said: “The message we want to be received by SMEs within the UK market, is those that feel ready to embrace change and innovation in their operations and supply chains, but don’t know where to start, should reach out to our team for help. They do not have to commit to anything and we can start an open dialogue and work together, utilising our wide-ranging knowledge and expertise, to help address any inefficiencies and look at how implementing useful practices and technologies can have a significant impact on the bottom line.

“Our partnership with NBT and Senseye addressed one of the Grand Challenges in the UK Industrial Strategy, the artificial intelligence and data-driven economy with particular emphasis on maximising supply chain efficiency to optimise processes and drive efficiencies and productivity increases. The feasibility study was incredibly illuminating and our knowledge of how technology can have massive impact, is one of many areas of knowledge we are seeking to exchange with SMEs looking to increase business productivity and efficiency.

 “Brexit and Covid-19 further highlighted the cracks that exist within supply chains and the urgent need to address any weakness.

“Our in-depth research in to supply chains and operations management and how continuous improvement or incremental improvement through knowledge and innovation can streamline operations and processes, has allowed us to predict the potential for £50m in savings, over an eight-year projection, for those SMEs we have looked at and we now want to assist many others. Businesses are continually seeking ways to increase profits and are so often caught up in day-to-day operations, they do not pause to address costly inefficiencies. Having access to supply chain improvement tools and advancements such as AI is game-changing, not least due to its ability to mitigate risk, for example, pre-empting machinery breakdown.

“We have recently put forward a new Innovate UK funding application for a project in partnership with NBT Group and broader partners in different sectors. If we are successful, it will allow us to implement our ideas of a feasibility study for generating significant impact on energy and resource efficiency and carbon emission reduction. The results of which, will create a platform for broader community development.”

As part of its simulation modelling, the research group was able to recommend 50.1% less downtime across all plants for one international company operating in the automotive supply chain sector, with potential savings of up to £38.2M a year in machine downtime.

The Group, which has also worked within the German financial sector, promoting innovation in its supplier relationships, resulting in an estimated €10M worth of business growth, has also facilitated a funded project involving ten UK-based manufacturers. The result of which was a shift towards sustainable, efficient and top-quality processes with an estimated £8M cost-saving collectively.

In addition, it has recently undertaken a research project to support the Northern Power House with a more innovative approach of focusing on the role of continuous improvement in manufacturing SMEs in macro economy growth in Northern England.

As part of its ambition to promote the role of continuous improvement for manufacturing SMEs, the Group is closely aligned to trade bodies which identify supply chain issues, such as AMF.

Richard Swart, chair of AMF, said: “Supply chain and operations inefficiencies cause widescale disruption within manufacturing and is one of the biggest and most costly downfalls our sector faces. The Advanced Manufacturing Forum is well aware of the work the Research Interest Group does and the opportunities available to SMEs that connect with it to gain significant knowledge on how to efficiently increase business productivity and efficiency.

“I encourage all of our members, as well as SMEs working within all supply chains, to engage with the Group. The past couple of years has shown how business can be affected in ways outside of our control. Operational efficiency is a variable that can be controlled and, with the support of the Group, SMEs can expect to see significant cost-savings.”

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