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As part of our ongoing commitment to supporting the UK’s manufacturing sector, RBS is continuing to collaborate with EEF, the manufacturers’ organisation, to undertake research and provide crucial market intelligence that informs strategic decision-making. Our latest survey, Manufacturing Focus: Managing Materials Prices (167Kb PDF), sets out to examine the challenges posed by sharply rising, volatile input costs.

Ongoing challenges, fresh thinking…

Since January 2011, year-on-year commodity prices have risen by 30%. This follows three years during which prices fell substantially. Today, nearly half of the EEF member firms surveyed regard the cost of raw materials as a major barrier to growth, with smaller firms especially struggling with volatility. Concerns over availability and lead times exacerbate the challenge.

The report shows the different strategic approaches manufacturers have been taking when faced with steeply rising prices. Renegotiating contracts, improving price modelling, redesigning products, bulk-buying and substituting cheaper materials are just some of those approaches. But which have been the most effective, and which may prove to be the most sustainable?

Finance-related strategies, such as seeking alternative funding, holding higher cash reserves or using financial instruments have been explored in more detail by many companies. However, aspirations to stay competitive, improve productivity and add customer value amongst the sector might mean that even those strategies which have been rejected may warrant revisiting.

Download the report

The full, comprehensive report provides insight and analysis for the following areas of interest:

• Barriers to growth: Why rising and volatile input costs bring new and serious challenges to UK manufacturers refocusing on growth
• Serious implications: Key variations and common threats for manufacturers of different sizes and business models
• Strategic responses: Common short-term actions and long-term solutions across supply chains and amongst customer
• Expert outlook: How the Head of Manufacturing & Industrials at RBS sees input price trends developing – and what this means for firms

Inform your strategic decision-making, add to your insight and share these findings with colleagues and other senior executives. Download the report here (167KB PDF).