Rationale for Recommendations to Consolidated Brick & Tile, Plc, Research Paper Example

Introduction

The decision of maintaining the Woden Mills Brickwork ltd. plant was perceived as the optimal choice for Consolidated Brick and Tile. Consolidated Brick and Tile has taken pride in the creation of employment positions in the United Kingdom over the past several decades. However, the present business climate and operating expenses have caused the administration at Consolidated Brick and Tile to consider the option of maintaining the Woden Mills brick makers ltd. plant in an inactive condition until the sale of the land can be arranged for low density housing in five years. This decision is attributed to the profitability analysis, the analysis of net present value and the payback perspective. These analytical approaches were applied in order to determine the viability of following the scheme of the pilot plan for reopening defunct brickmaking facilities in the southeastern segment. In addition, Consolidated Brick and Tile would like to optimize the opportunity for capitalizing on the increasing market  regarding the provision of building materials in order to provide ,maintenance of the historically built environments As much as the management of Consolidated Brick and Tile would like to engage in the scheme of reopening defunct brickmaking facilities, these plans will be suspended in anticipation of a more optimistic outlook for the manufacturing sector in the United Kingdom.

UK Manufacturing Sector

There has been a significant amount of adverse news regarding the UK manufacturing sector. There had been reports that the manufacturing sector has become stagnant subsequent to almost three years of constant increases. This perspective has been in alignment with the statistical depiction. There has been a substantial lag in the increase of production that has occurred since last summer. In the North- eastern segment of the United Kingdom, there have been production delays at the Redcar steel production plant. The news of delays in the UK manufacturing sector has exacerbated the anxieties related to the potential attrition of employment positions in the UK (Milbourne 2011; Sentence 2015).

 The manufacturing sector in the United Kingdom has been perceiving the globalization changes which have been derived from Asia. In addition, the challenges in the Chinese economy have been making their way toward the UK economy. China presently is one of the world’s greatest producers of steel. The United Kingdom presently produces one percent. The challenges in the Chinese economy are causing depressions in the steel prices and other peripheral manufactured items. The United Kingdom is influenced by the global manufacturing trends (Blackford 1998; Sentence 2015).

The United Kingdom is no longer perceived as the global steel products workshop. The Redcar facility is one out of seven remaining steel fabrication facilities in the United Kingdom. Notwithstanding that the United Kingdom does not manufacture products on the scale which it had once produced, does not infer that the outlook for the economy of the United Kingdom is bleak. One of the manufacturing industries that has been thriving in the United Kingdom is the automobile manufacturing segment. Production in the UK automobile industry has increased more than 40% from August 2014. There are state of the art organizations specializing in the production of technology which are also faring well. The effective quality of the British manufacturing sector is no longer based on the number of tons of steel that are produced. The UK manufacturing perspective is geared toward the manner that technology is applied. The trends in British manufacturing are directed toward the production of the technologically innovative products that are demanded in the global marketplace (Milbourne 2011; Sentence 2015).

Technologically Oriented Manufacturing and Services  

The trend toward the production of technologically innovative products in the United Kingdom infers that the manufacturing sector will have the need for workers with elevated levels of skill and craftsmanship. This quality implies that the British manufacturing segment will be employing fewer employees. The industries which are driving the success in the global marketplace apply highly skilled employees, machines and technology at their core. The proportion of the workforce in the United Kingdom which had been geared for employment in the UK manufacturing segment was once 35% during the 19^th century. The proportion of workers employed in the manufacturing sector remained consistent until the past half century, After the 1970s, there had been a constant decline in the availability of manufacturing employment positions in the United Kingdom. Present slightly more than 8% of the workforce in the United Kingdom is employed in the manufact8uring sector. Notwithstanding, the British manufacturing sector has become more productive. The value of exported goods which had been manufactured in the United Kingdom was assessed at £224 billion. The export estimate means that each household in the United Kingdom contributed £8,400 in labor toward manufactured goods (Sentence 2015).

There are four primary reasons that the United Kingdom will be prosperous with a smaller employment share in manufacturing. First, the industrial concerns which are geared toward the manufacture of products that remain in the United Kingdom must remain highly effective, productive and innovative. There is the inevitable concern that global trends will have the outcome of creating challenges in certain sectors of the economy. The United Kingdom no longer maintains the commanding stature that it once held in the bulk manufacturing activities which include the fabrication of compounds, shipbuilding, construction and steel. However, the United Kingdom has manufacturing concerns which are at the forefront of advanced engineering, aerospace and pharmaceutical production (Milbourne 2011; Sentence 2015).

The framework of the British manufacturing segment is supplied by organizations which are medium sized which maintain employment for an average of six hundred employees. The net index of return for the British manufacturing organizations had been assessed at 10.8%. This index is the most elevated level of returns that have been reviewed during the past fifteen years. In addition, the United Kingdom provides a favorable investment climate for a number of sectors in the economy. These sectors in the United Kingdom have the opportunity of optimizing the flexible rates for labor, the comparatively low tax index on profits and income derived from labour. Furthermore, the UK has an agreeable approach for the business concerns with regards to regulation. There are some improvements that are required in the transportation infrastructure and the technical abilities in some areas are lacking. Nevertheless, the United Kingdom continues to maintain its quality of attracting businesses that wish to operate within the European Union. Recently Hitachi and other foreign multinational organizations have established offices in the United Kingdom (Sentence 2015).

The United Kingdom has also been proven as an exporter of service. The United Kingdom maintains the most elevated index of exports in correlation to the GDP of any of the nations in the G7. The exporting of services in the United Kingdom constitutes 12% of the GDP. This is compared to 8% for the German and French economies, 4% for the United States’ economy and 3% for the Japanese economy. The surplus that has been manifested with regards to trade of services was rated at an impressive £86 billion, which includes professional services, financial services and business services. In addition, there are a variety of sectors which include IT, media, fashion and design. These are peripheral sectors which contribute to the British trade surplus (Sentence 2015).

In addition, the United Kingdom has a number of the components that are required in order to provide support for the development of new technologically oriented organizations in the services and manufacturing sector. These organizations will be the engines of success in the twenty first century. There are a number of concepts which have derived new businesses in the manufacturing or survives sector. These businesses are attributed to concepts which have been derived from the programs conducted in the university research facilities. This is a phenomenon that has occurred on the Western coast of the United States. A number of high tech organizations which include Microsoft, Google and Facebook have emerged from Silicon Valley, which is in close proximity to many of the university programs that encourage innovation (Blackford 1998; Sentence 2015).

The university system in the United Kingdom has produced some of the most outstanding tertiary educational institutions in the world. Imperial College, University College London, Cambridge and Oxford constitute the top ten universities worldwide. In addition, there are educational facilities which include Warwick, Edinburgh, Kings College London and the London School of Economics which are in the top fifty educational facilities in the world. The United Kingdom requires hard work in order to transform the academic prowess into commercial success. In addition, in the creation of new businesses, there will be a higher level of respect toward the colleges and universities of the United Kingdom (Blackford 1998; Sentence 2015).

 The manufacturing sector of the United Kingdom may not be the prevalent force in the British economy as it had been in the era that preceded the 1960s. Notwithstanding, the manufacturing sector in the United Kingdom continues to be a vibrant contributor to the UK economy and it continues to demonstrate the ethics applied in the UK leadership position of maintaining economic sovereignty, generating new employment positions and maintaining the standard of living that has been associated with the prosperity of the United Kingdom. There had been a “march of the makers” which had been emphasized by George Osbourne during the 2011 Budget disclosure. The “march of the makers” has taken place in a different manner than would have been environed for Woden Mills Brickworks, Ltd. The manufacturing trend has migrated toward technology. In the analysis of the present trends and the business perspective generated by the review of the net present value, profitability index, and payback, the conclusion of not reopening the Woden Mills Brickworks Ltd. facility is the option selected by Consolidated Brick and Tile, plc (Sentence 2015).

Conclusion

Consolidated Brick and Tile, plc has traditionally been a firm believer in the creation of employment positions in the manufacturing sector of the British economy. However, in the light of the analysis of the NPV, payback return and profitability index, it has been decided that the optimal course of action would be to purchase the Woden Mills Brickworks Ltd. facility and hold the property in a vacant condition for the next five years. In this manner, Consolidated Brick and Tile, plc., may make a future contribution toward the growth of low density housing for the residents of Southeast region

Reference List

Blackford, MG 1998, The Rise of Modern Business in Great Britain, the United States and Japan, Second edition, Chapel Hill, NC: The University of North Carolina Press.

Milbourne, P 2011, ‘Conclusion: Continuity and Change in Rural Wales’, in Rural Wales in the Twenty -First century: Society, Economy and Environment, Cardiff, UK: University of Wales Press.

Sentence, A 2015,’The UK may not be a manufacturing powerhouse anymore, but here’s why our economy can still thrive’, The Telegraph.