How digitising Yorkshire's manufacturing sector could hand region a £3.3bn boost

Research from Siemens Financial Services (SFS) estimates that manufacturers in the region who digitise their operations could add an additional six per cent of total revenue to their bottom lines.

The manufacturing sector in Yorkshire makes up circa 15.6 per cent of the region’s total economic output, with some 12,000 manufacturing businesses being located in Yorkshire.

However, Yorkshire also struggles with low productivity in certain sections of its manufacturing offering and, as the UK faces a period of sustained significant economic crisis, greater output and agility is seen as key to help the region cope with market disruptions.

Published in its Digitalisation Productivity Bonus: Manufacturing in Yorkshire & Humber report Siemens also adds digital technology can help with improved planning and forecasting, enhanced competitive capabilities and greater financial sustainability.

Neli Ivanova, sales manager for Industrial Equipment at Siemens Financial Services in the UK said: “Companies in Yorkshire & Humber form a cornerstone of British manufacturing.

“For the region to maintain its position as an industry leader, it’s essential that businesses make the most of Industry 4.0 potential.

“While it can be difficult to quantify the specific gains of such an investment, it’s clear from our research that increased productivity can be understood in terms of financial savings.”

Although the exact building blocks of productivity differ between industries and regions, increasing that productivity - to either produce the same number of products for less or more products for the same - has a clear and calculable positive effect on costs and margins.

This positive effect has been labelled the Digitalisation Productivity Bonus.

The paper draws on a statistical model, developed by SFS, which estimates the Digitalisation Productivity Bonus in the Yorkshire region to demonstrate the potential gain from Industry 4.0 for manufacturers in the region.

The average ‘bonus’ percentage range was applied to the total annual revenue of the manufacturing sector in the Yorkshire.