University News Last updated 14 February 2011
Supply of new off-highway plant and machinery to the UK’s industrial business infrastructure is key to maintaining optimum productivity and sustained levels of output. But, since onset of recession in 2007, prevalent negative macroeconomic conditions have meant this supply has fallen sharply – and stakeholders are witnessing tough operating conditions.
Professors David Edwards and Gary Holt of the Centre for Business, Innovation and Enterprise, recently began researching this problem from two standpoints. First, to achieve better understanding of the supply chain’s business challenges and second, to analyse the effects of these challenges on the drastic downturn in sales.
Professor Edwards commented, “Many of the UK’s plant and machinery supply chain stakeholders are finding the economic situation extremely difficult, in some cases, pricing their products and services at or below cost to secure business. They are trying to ‘buy survival time’ and long for a more profitable business environment to return. The focus of many in the sector right now, really is, survival”.
Regarding sales of new plant and machinery, Professor Holt said, “Sales of new items have fallen significantly. Our most recent analyses show for example, that long held ‘doyen’ of plant the backhoe loader – known to many more affectionately as the ‘JCB’ – has witnessed a decrease in sales from approximately 5,000 units in 1994 to 1,600 units in 2009. Looking at the overall picture, total sales of the ten most popular plant items in 2009 are down to 1998 volume. This is certainly not good for UK plc and may lead to problems of production and efficiency, particularly when confidence and industrial output returns”.
In pursuit of their research, the professors are presently undertaking extensive field studies with several major UK machinery suppliers and customers. Their initial findings have been submitted to a leading academic journal and industry-facing periodical for publication. For more information on this project, please email gary.holt@bcu.ac.uk.