TABLE OF CONTENTS
Critical Discussion on changes in the manufacturing sector of the UK
Examination of Changes of Cost in the Context of DM, DL and FOH
Introduction
In the following essay, regarding manufacturing in the United Kingdom which has changed over the last century. Besides, it has been summarised how changes have been made and examined how costs have changed in the main three areas of direct materials, direct labour and manufacturing overhead. The industrial revolution has been discussed critically along with background history that how the United Kingdom has reacted in this regard. Moreover, as this impact has been observed in terms of accounting, therefore, from that perception those factors have been critically examined with the help of academic articles.
Discussion
Critical Discussion on Changes in the Manufacturing Sector of the UK
Manufacturing terminology is mostly related to the small workshops that are being carried out in people’s homes rather than with the help of Machines. In this way, the economy is being focused on handicrafts and Agriculture from one region to another. The first industrial revolution started in the United Kingdom in the late 1700s (Ranieri, 2019). There was a rapid rise of technologies related to engineering innovations and it resulted in the arrival of hundreds of factories in this way, mass production of goods started to increase and in this way, a birth of industry came into existence (de Chernatony, 2012). Birmingham was regarded as the home of this revolution due to several famous inventions from there. A report in Talk Business, (2018) has highlighted that the second industrial revolution was a decline rate for the United Kingdom rather than Germany and United States overtaking it as the world’s biggest manufacturers but the United Kingdom remains one major Global player around the globe in terms of industry. Devlin, (2018) studied that still, 1948 was manufacturing the Kingdom as, by this time gas, oil along with manufacturing utilities of other types made significant in terms of economy in the country after the second world war.
In the deindustrialisation phase, Germany and the United States were affected but the United Kingdom became a hub for businesses as it started to import many goods from overseas which resulted in a service industry. In the light of studies by Pemberton, (2016), which discussed that during the 1980s many industries related to coal mining and shipbuilding were hit hard in terms of finance and service industry in the Midlands and the North but after that from our past 30 years, United Kingdom have significantly increased or boost the car manufacturing industry and in this way, cars are being manufactured in the country and are being exported to Overseas companies. Mini, Rolls-Royce, Bentley, Austin Motors, Morgan, JCB and Leyland trucks etc. are regarded as prominent car manufacturers in the United Kingdom. Ranieri, (2019) studied different characteristics in terms of the workforce in the manufacturing industry in past 10 years. There is overall 8.2 % of the workforce of the British which is being employed by the manufacturing industry whereas the country’s national output was calculated as 12% in 2010 which increased to 44% in 2014 and by the end of 2019, it was equal to 52%. There is no doubt that manufacturing is important not only for the United Kingdom but also for other countries (Busachi et al., 2018). Even though the country has been faced with three different time intervals in the past 70 years the manufacturing sector significantly decreased in terms of employment, National GDP and manufacturing output.
Examination of Changes in Cost in the Context of DM, DL and FOH
There were three main segments in which change in cost has been observed and these segments or categories of costs are direct material, direct labour and cost overhead. Labour productivity helps measure the output of a country in terms of hours not only in the UK but also in other countries. The industrial revolution for significant change in manufacturing in the United Kingdom has significantly affected the landscape and main features of the country. Besides, the main features include the cost of indirect material and the cost of direct overhead material. It has been recorded that 36% of the UK population was mainly belonging to manufacturing in 1841 but by the end of 2011, this figure declined to just a quarter of its proportion which reflects that a major contribution has been observed from labour-intensive manufacturing industries towards skilled in specialised fields (Flachenecker et al., 2017). Moreover, in the 19th century there were various pockets in terms of manufacturing across the country but by the start of the 21st-century manufacturing industry of the United Kingdom shrank only to particular areas like East Midlands and Corby etc.
On the other hand, change in terms of direct material has also been observed mainly due to the reason of Technology and innovation industry. the reason for Technology advancement has been made in terms of new machinery for production in the country which significantly decreased the direct cost of the material but at the same time productivity increased along with efficiency. In this way improvements in materials started to be used in the manufacturing process and provide safe methods of manufacturing as well. On the other hand, mass production follows the logic of Economics of care but works only if there is a mess market for standard goods (Busachi, 2018). In comparison to the United Kingdom with other countries like Japan and West Germany, the same criteria are being adopted but both countries have responded to the changed International environment of industry and mass production. The third sharp decline was made in the economy of the United Kingdom due to the capital goods sector in 1980 which means that new equipment required by recent search in manufacturing investment cannot be made from domestic sources. At the same time, it has been discussed that new methods of manufacturing organisations and productions which are regarded as key to industrial sectors started to fail whereas competitive Nations like West Germany, Japan and Italy have changed their directions accordingly.
Conclusion
It is concluded from the above discussion that the 18th century was regarded as the Industrial Revolution for the United Kingdom but a significant decline in the manufacturing economy of the United Kingdom has been observed over trade. The manufacturing sector of the United Kingdom was recorded at 8.2% along with significant numbers of countries’ National output. Economic structure significantly increased in terms of services manufacturing and the primary sector decreased from 2001 to 2015. However, the significant impact of this decline has been observed mainly on three factors direct material cost, labour cost and overhead material cost.
References
Busachi, A., Erkoyuncu, J., Colegrove, P., Drake, R., Watts, C., Martina, F., Tapoglou, N. and Lockett, H., 2018, March. A system approach for modelling additive manufacturing in defence acquisition programs. In Procedia CIRP (Vol. 67, pp. 209-214).
de Chernatony, L., 2012. The impact of the changed balance of power from manufacturer to retailer in the UK packaged groceries market. Journal of Retail and Marketing Channels (RLE Retailing and Distribution), p.258.
Devlin, J.P., 2018. From New Technology to New Industry: The Emergence of Radio Broadcasting in the UK. In From Analogue to Digital Radio (pp. 11-37). Palgrave Macmillan, Cham.
Flachenecker, F., Bleischwitz, R. and Rentschler, J.E., 2017. Investments in material efficiency: the introduction and application of a comprehensive cost–benefit framework. Journal of Environmental Economics and Policy, 6(2), pp.107-120.
Pemberton, H., 2016. UK industrial strategy, redux: Reinvention or return to the 1970s?. Juncture, 23(3), pp.202-208.
Ranieri, R., 2019. Steel and the State in Italy and the UK. The public sector of the steel industry in comparative perspective (1945-1996). In The European Yearbook of Business History (pp. 125-154). Routledge.
Talk Business, 2018. The history of manufacturing in the UK. [Online] Available at: [https://www.talk-business.co.uk/2019/07/26/the-history-of-manufacturing-in-the-uk/] [Assessed on 15 April, 2015]
