The Top 5 Cloud Manufacturing Trends For UK SMEs in 2022

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We’ve compiled the data and identified the top 5 cloud manufacturing trends for manufacturing SMEs in the UK for 2022, so you’re ready to get ahead of the curve in the new year as the sector continues its recovery. If your business is in a related sector such as wholesaling or distribution, these trends will be of interest to you too.

The statistics here are drawn from data-based studies of SMEs in the UK and around the globe, including our 2021 Unleashed Manufacturing Report, which analyses over 70,000 data points on almost 400 UK manufacturers who use Unleashed inventory software day to day.

What are the Top 5 cloud trends for manufacturing SMEs in 2022?

1. Ecommerce capability is crucial

  • Key stat: In 2021, the average profit margin for firms with at least one eCommerce integration was 57%; for those with no integration, it was 46%

You read that right. According to our 2021 study, profit margins were 11% higher in 2021 for those with an eCommerce integration. And there’s more: our data indicates that having a greater number of eCommerce integrations generally correlates with higher average profit margins.

So is setting up an eCommerce arm for your business worth the investment? The short answer is yes.

The longer answer is that eCommerce not only supports profit margins, but also comes with a host of competitive advantages. Buyers increasingly prefer online and self-service purchasing options so they can browse and buy your products any time, and online sales are less labour-intensive and more secure than traditional methods.

While it’s common knowledge that eCommerce is experiencing a boom, it’s hard to emphasise enough how important it will be in 2022 and beyond. Many firms turned to B2C eCommerce in 2020–21 to boost declining sales, but the trend is not restricted to the B2C market: B2B eCommerce is on the rise and 80% of B2B transactions are predicted to take place online by 2025.

2. There’s still room to get ahead of your competition with eCommerce

  • Key stat: 62% of UK manufacturing firms had no eCommerce integration in 2021

Of all the locations covered in our study, only the Scotland, Eastern and London regions had slightly higher than average eCommerce uptake of over 40%.

What that means is that even though eCommerce is on the rise, the field is still wide open – and that it’s not too late to get ahead of your competitors in the all-important eCommerce space.

Setting up an eCommerce arm for your business may seem daunting, but there’s a range of fully supported online platforms now available, whether you’re looking to establish a single online store or a complex multichannel system.

And remember that having eCommerce capacity doesn’t just boost sales. You can integrate your online sales platform with inventory management, accounting and shipping software – which saves hours of manual work, increases accuracy and improves fulfilment times.

A man manages inventory on his device

The growth of cloud software has been accelerated by the events of 2020–2021, and with its many advantages for SMEs, there’s no going back to on-premise legacy systems

3. Exporting to the EU continues to demand flexibility

  • Key stat: Manufacturing firms exporting to the EU saw growth of 15% in 2021 – less than the growth for manufacturers overall, which was 24%

This statistic – again from our 2021 study – shows that agility will continue to be essential for exporters in 2022. Supply chain, labour and shipping issues are predicted to continue hampering the sector until around mid-year – not to mention red tape and inflation.

While these factors are largely out of your control, on a day-to-day basis you can optimise how you respond by ensuring your data is up-to-date, accurate and accessible. With secure supplier information and precise records of costs for customs and shipping, you’ll be able to manage your budget and profit margins effectively. The same applies if you’re looking to new customers and markets.

A centralised system that gives you real-time and accurate visibility over key data is crucial as conditions change. This is where converting to the cloud brings multiple benefits – such as letting you view and update data on sales, purchases and costs from any device, and digitally adjusting bills of materials and the like to keep track of changing costs.

4. Cloud software’s exponential growth continues

  • Key stat: The cloud computing market is expected to reach US$1,251.09 billion by 2028

Grand View Research’s 2021 report predicts cloud computing will see a massive compound annual growth rate of 19.1% until 2028 – meaning it’s becoming the new norm for businesses globally.

Cloud software’s certainly not new, but as it grows rapidly and offers an increasing number and range of options for users, it remains a crucial trend for SMEs in 2022.

There’s good reason for this rapid growth, since cloud systems come with a host of advantages over legacy on-premise software, especially for SMEs.  Because it’s usually subscription-based and doesn’t demand a large initial investment, cloud software is less risky for smaller businesses with more limited budgets. And your provider is responsible for storing data, security and maintenance, meaning lower ongoing costs as well.

For many businesses moving to the cloud was driven by the need to access data remotely during lockdowns in 2020–21, but there’s no going back – it’s now just a question of who jumps on board, and who gets left behind.

5. Adopting new tech drives revenues and productivity

  • Key stat: Businesses that regularly invest in new tech achieve an average revenue 120% higher than those that do not.

Xero’s 2021 survey of 4,200 small businesses showed that ‘adopters’ who take a proactive approach to technology enjoyed 120% higher revenues – as well as 106% higher productivity. It’s a striking statistic for businesses that have been feeling the effects of Covid-19 for around 2 years.

In the UK, 6 in 10 small businesses surveyed in this study were confident and excited about embracing new technology – but 7 out of 10 said they would avoid it if it involved too much hassle.

Why is this important for SMEs in 2022? Despite lingering issues, industries such as manufacturing are tipped to recover to pre-Covid growth levels by the end of 2022, giving manufacturers more confidence and optimism going into the new year.

While recovery may be slow, it will come with new opportunities – and becoming an ‘adopter’ of new tech will put you ahead of the curve. Even small updates to your processes – such as using barcoding to track stock, or a simple cloud-based system for purchases and sales – can noticeably improve your efficiency.

 

More about the author:

Alecia Bland - Unleashed Software
Alecia Bland

Article by Alecia Bland in collaboration with our team of inventory management and business specialists. Alecia's background is in ancient languages. When she's not reading a book with her cat for company, you can usually find her cooking, eating or trying to make her garden productive.

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