Transforming cross-border trade finance

Cross-border trade is as old as trade itself. The fundamental principles and hence challenges for traders remains the same, despite attempts to create universal frameworks.

The problem is that purchase and sale take place in different places and different times. The seller needs to be paid before releasing the goods and the buyer won’t get paid till he sells them at home. Bridging that gap – “financing the trade” has become a huge and diverse collection of businesses. And rather than becoming simpler, the techniques have, rather like evolution, tended to become increasingly complex.

As the complexities increase, so do the risks – and the transaction costs. But with the maxim that “no two deals are identical”, today’s “traditional” cross-border trade facilities frequently generate mountains of paper, defying all attempts at simplification.

This link between money and goods has remained intractable, and is largely responsible for the continuing complexity of trade transactions. If this link could be broken, goods could move more freely, benefitting fully from today’s advances in logistics management, while the money could flow freely and quickly from buyer to seller.

One company has broken this link and aims to change fundamentally the way in which cross-border trade is conducted. TradeRiver, a supply chain financier allows its enrolled buyers to purchase goods for cash in local currency anywhere in the world without getting involved in the location, state or condition of the goods or, importantly the value as agreed between buyer and seller. For the first time, goods and their payment are completely separate, making cross-border trade arguably no more complicated than an online credit card purchase from an overseas retailer.

Come along to TradeRiver’s workshop about finding alternative sources of working capital without involving the bank taking place at the Manufacturing and Engineering Expo on 8th October at 2pm.

5 top tips to make your speed networking session a success

5 top tips to make your speed networking session a success

Most businesses would agree — referrals and face-to-face contact are the best ways to build and nurture business relationships — however, contrary to this many businesses spend many thousands of pounds placing advertising and sending marketing via email or though the post. 

Why you should get involved with speed networking?

If meeting someone is the best way to judge whether you can do business with them why don’t more businesses get involved with networking? Well, for many people it seems to be a little bit of nerves that can keep them away from meetings — so, if a breakfast or lunch seems too daunting how about the best and quickest form of networking — speed networking?

Speed networking is not a new concept, however, in a time when we seem to be spending more and more of our working day communicating online and through email it makes a refreshing and interesting change to your business development strategy. Arguably, speed networking will give you access to more people in one hour than you might normally meet in a month. It’s quite normal to feel a little apprehensive but do a little prep work beforehand those nerves should be calmed.

As ever preparation is key

1. Make sure you have a great opener for each of your pitches — just 10 seconds will do, covering an introduction, what your business is about or what you are looking for.  

2. Try to think about the different types of people and businesses you are going to meet and how you could change your intro to meet their needs — you’ll have far more success if you can slightly tailor your pitch to each person. 

3. Be practical — remember your business cards and a pen to make notes (on the back of each card is a good idea) and remember people’s names!

4. Not everyone is going to seem suitable for you or perhaps be interested in your product or service right now, but, remember to “think outside the box” — the product or service may not be suitable today but what about next month or in year’s time when you have diversified or grown? Consider whether a contact could become a mentor or a partner or a franchisee? The people who gain the most from these sessions are those that are the most open minded. 

5. Although it may seem counter intuitive, do your best to help the people that you meet — try to offer solutions to them and their challenges. You’d be surprised at how this “pay it forward” mentality has helped many businesses — perhaps not immediately but at some point. You’ll impress your new contact and you never know they may well recommend or use you in the future. 

Networking for success

Many of the most successful entrepreneurs are those that have spent their time networking — building trustworthy, reliable contacts across their industry, in support services and a wide variety of geographical locations. Meeting people and developing positive relationships is surely the key to a successful business?

So, hopefully now you should feel a little more prepared for a speed networking session? Well you can book your slot here for the Manufacturing & Engineering Expo October 8th. And let us know how you get on ……

Skills shortage is becoming a critical issue

Skills shortage is becoming a critical issue

Groups across the manufacturing and engineering industry are highlighting the issue of skills shortages for the future of the manufacturing and engineering sector. A combination of poor reputation from a perceived lack of pay, lack of prospects and a poor working environment have meant that successive groups of students are not seeing the sector as an aspirational path to follow. As a result the continued growth of the British manufacturing industry could stall as an older generation of engineers come to retirement age and there are not the graduates below them learning the skills and gaining the experience to become the managers for the future. The CBI – the Confederation of British Industry - recently warned that the situation was so severe that it could, in fact, stall the sector completely, whilst the sector skills council for science, engineering and manufacturing technologies, SEMTA, highlights a potential shortfall of some 80,000 workers across the next 2 years.

With the prospective situation looking so desperate a number of schemes have been introduced across the sector from education at a school level to the implementation of apprenticeship schemes by business, in an effort to create more uptake for the future.

Industry organisation warns of shortages

The EEF, the manufacturer’s organisation, comments that 80% of manufacturers that they have spoken to are already experiencing skills shortages and that with the increased business in the sector and many order books bulging this situation can only become worse. Added to this is the new competition from the financial services sector which has been actively recruiting those with a maths and science background for some of the risk analyst roles within the sector. And, whilst these numbers are currently small it could be argued that it is a sector that may grow and so pose more of a threat in the future.

More must be done by the education system

One of the other key issues it seems is an image one – manufacturing has a serious branding problem. Not only is there a low general uptake within schools for the science and maths courses to  the required level, but also many are arguing that more must be done to encourage girls to take up these subjects. Some are even suggesting that there should be positive discrimination at university level to encourage more women to take courses that will lead to a career in manufacturing or engineering. The Government has committed around £385 million to university facilities and teaching, whilst the CBI is arguing that university fees for certain  courses should be reduced to help the numbers to rise.

Arguably the salaries in many of these roles not only rival but in certain areas outstrip the salaries in most other careers and yet there still appears to be a stigma attached to these jobs. In response the Telegraph has recently announced the winner of their new competition to encourage innovation across five areas - pharmaceuticals, automotive, the environment, construction and defence - by students in the sector. It is offering a £25,000 prize (courtesy of Babcock Group International) to the entry that is decided displays the most positive change to the sector. This is a competition that is pushing the skills of engineers and science to the forefront and highlighting the sector in a more positive light.

Apprenticeship schemes partly hold the answer

The Government has also been pushing Apprenticeships for a number of months and it seems that for those that are heeding the advice and looking at establishing schemes where young people can be nurtured and grow has proven successful. A great example of this is a local manufacturing business, MEP, who are a multi award winning manufacturing business that specialise in moulding and machining.

Their commitment to an apprenticeship scheme is paying dividends – five years ago they decided that in order to create a workforce that would grow with their business they would need to create an apprenticeship scheme. They employed two to start with and have since then taken on an additional apprentice each year until last year when they took on six. Phil Hart from MEP comments “My ambition was to have an apprentice across all departments, including our support teams and we achieved this last October. We are seeing the benefits already as they begin to deliver value to the business, overall it’s been a really positive move.”

The Manufacturing and Engineering Expo run by the Kent Invicta Chamber of Commerce and supported by MAS and the EEF. The Expo is addressing the issue of skills shortages in its programme via the networking breakfast where Nick Holbrook-Sutcliffe from East Kent College will be speaking about their experiences and in a workshop that will feature the scheme run by MEP. Alongside this workshop are keynote speakers including Will Butler-Adams of Brompton Bicycles and Kevin Gaskell, the former MD of Porsche and BMW. It’s a free event to attend and there will be over 80 exhibitors and live demonstration areas.

The South East is poised to take advantage of the positive manufacturing sector

Manufacturing & Engineering Expo on the 8th October in Kent

The Office of National Statistics recently reported that from February 2013 - February 2014 manufacturing had increased 3.8%. Since then optimism within the manufacturing industry appears to have remained high with orders from both home and abroad, according to the recent Industrial Trends Survey released but the CBI, continuing apace.

Contrary to what many people have believed, manufacturing in the UK is remarkably strong - Britain ranks 11th in the world. Although, perhaps, not at the heady heights of the 1970’s, industry has certainly been enjoying a renaissance and the South East in particular, as the region with the largest manufacturing base in the country, has been one of the main benefactors of this. Not only is it perfectly placed to take advantage of the booming market place across the rest of the country but also in its position as a gateway to European commerce.

Bringing together talent from across the industry

Tasked with ensuring that the gains of this buoyant market are fully developed and exploited is the Kent Invicta Chamber of Commerce, who is holding their annual Manufacturing & Engineering Expo on the 8th October at the Kent Event Centre, near Maidstone. It will offer local, regional, national and international firms the opportunity to meet, network and build new relationships. Along with the exhibition there will be a full conference programme including leading industry keynote speakers - with the leaders of automotive manufacturing, Aston Martin already confirmed - and informative workshops offering advice and knowledge in a practical way that can be implemented immediately.

...it’s a brilliant opportunity to see manufacturing techniques in action and hear from some leading industry experts

Jo James

The Expo this year is run in association with EEF, the manufacturers’ organisation for UK manufacturing companies, BAE Systems, MAS, which provides manufacturing business support for companies based in England and the University of Greenwich. As one of the largest events of its kind the Expo draws on a wealth of talent from the engineering and manufacturing sector, offering unrivalled access to commercial expertise across the board. Whether it’s developing or expanding a supply chain within the South East, discovering the latest technological innovations or initiating new relationships the Expo is perfectly positioned to help.

“This is going to be a great day for everyone involved in the manufacturing and engineering sector - not only is it a fantastic platform to develop relationships with new and existing clients, but, also it’s a brilliant opportunity to see manufacturing techniques in action and hear from some leading industry experts,” says Jo James, Chief Executive of the Kent Invicta Chamber of Commerce. “With the Expo dinner this year showcasing Richard Noble’s unique and inspiring spirit, the event is certainly shaping up to be a key date in the manufacturing and engineering industry calendar.”

Why the UK should seize the opportunity that reshoring offers businesses

Why the UK should seize the business opportunity offered by reshoring

Reshoring has become one of the most exciting new trends within the manufacturing industry over the last few years. A buzzword that has led to David Cameron, the Prime Minister referring to it as a “reshoring revolution” at the recent World Economic Forum in Davos earlier in the year. He continued that Britain (and Europe) needed to seize on the opportunities that reshoring is offering – build employment from it and develop into a leading reshoring nation.

MAS, the Manufacturing Advisory Service, comments that in the past year the UK has continued to strengthen its position as the leading European destination for foreign direct investment (FDI), capitalising on global market opportunities to retain and create new jobs, and fostering FDI to spur economic development. Companies are increasingly looking to reshore manufacturing, textiles, software production and call centre work to the UK instead of outsourcing overseas, and reshoring is now a key component in strengthening local economies and the UK industrial base as a whole.

A way for the West to capitalise on globalisation

It has long been argued by some that the West would always struggle in the globalisation of the manufacturing and production sectors – the East and the machines would always win over the West. However, with this latest trend it would seem that for some firms the opportunity to reshore, or bring back part of their production or supply chain back to the UK shores, has proved to be viable from a financial perspective.

However, the reasons for reshoring are more complicated than being purely financially based. There is growing interest from firms to keep tighter control of the quality of their products – a factor that can be far more easily maintained from a closer production base within the UK. Also, reshoring has enabled businesses to resolve issues surrounding delivery times and logistical costs. For some firms it has meant that they are able to decrease production runs to trial smaller batches of alternative products – leading to an ability to tailor products to the market place, increasing profitability and sales and helping with cash flow.

Backing Britain survey

A recent survey conducted by EEF and Squires Sanders entitled “Backing Britain – a manufacturing base for the future” offers some interesting facts about the process of reshoring in the UK. One in six businesses have reshored either their sourcing to a British based supplier, or, have brought their production in-house over the last three years. The main countries that have lost out from this move have been those in Eastern Europe and China. It is thought that the gradual erosion of the previously more competitive labour costs and concerns over supply chain are two of the main reasons for some firms bringing the business back to Britain. A need to control the quality of their products is also key, as more and more British firms cite the quality of their product as their primary competitive advantage. Around 60% of those that have reshored have seen an increase, although small, in their profitability.

The need for reform and development if reshoring is to continue

In order for reshoring to continue to grow as a trend in the UK there is a need to address both energy costs and skills levels in the future. The survey cites the need for energy costs to remain similar to, or lower than, the EU average as a fundamental need if the reshoring trend is to continue to grow. In the US, which has seen much success from its reshoring programme, the growth in the production of shale gas has produced a source of reliable cheap energy for US manufacturers to tap into, a move that has interested David Cameron to answer these energy cost concerns in the UK. Alongside this, nearly half of the respondents cited skills shortage as a major potential issue for the future of the reshoring movement and that  there is a continued need to further develop apprenticeship schemes and skills training across the county to ensure that there are people coming through the pipeline as the industry grows.  The other main areas that firms expressed concern with were the tax levels.

As trends go, reshoring appears to be the positive, good news that the sector has been waiting for. And whilst initially it’s had a relatively slow uptake, if the current issues are addressed then there could be significant gains to be made for the manufacturing industry in the years to come. Find out more about reshoring by visiting the Manufacturing & Engineering Expo this October.