Effective strategy execution is crucial for companies but the need for provisions such as business execution software may rising even further among small and medium-sized manufacturers at present due to an increase in cost pressures.
According to research conducted by the Confederation of British Industry (CBI) as part of its latest quarterly trends survey, production expenses have risen sharply in the three months to April. It found that a balance of +53 per cent of enterprises reported that their average unit cost rose during the period. This was the highest figure since October 2008 and it led to sharp rises in average domestic prices of 26 per cent and in export prices of 31 per cent.
In order to keep their production costs down and help ensure they remain competitive, many companies may now be paying even greater attention to their strategy execution and any business execution software they use.
Meanwhile, in more positive news for small and medium-sized manufacturers, it was also found that the volume of orders in the UK and abroad grew at their fastest rate in 16 years during the quarter. Of 414 respondents, 39 per cent reported an increase of domestic orders, while 37 per cent noted a rise in expert orders.
Responding to the findings, Lucy Armstrong from the CBI, which is a lobbying organisation and aims to help create and sustain conditions in which British firms can prosper, noted there is "robust growth in production".
She added: "Headcount has increased for the third consecutive quarter as firms try to keep up with demand and output is expected to rise again in the coming months."
However, she went on to remark: "Inflationary pressures remain a dark cloud, with rising oil and commodity prices pushing up the cost of production and eating into profit margins. Manufacturers have raised output prices rapidly to cope and expect to continue doing so over the next quarter."
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