APRIL 2014
RE-SHORING - WHAT ARE THE RISKS? by Paul Bennett, managing director of Fascia Graphics
According to David Cameron earlier this year, he saw a chance for the UK to become the ‘Re-Shore Nation’. In fact many factors are combining to make the UK a very attractive country to do business with. There are a number of reasons for this. For
instance, the campaign to cut red tape has saved £1.2 billion (€1.45 billion); but also corporation tax will soon be as low as 20%, the lowest in the G7, and as low as 10% for companies that turn innovation into manufacturing. These and other factors are
persuading companies to move production and jobs back to the UK. But, if you re-shore your product, what about the suppliers of your UK
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based supplier? You may well receive benefits direct from your UK based supplier, but this may not be the case if they source many of your product’s components from overseas. As an example, most of us perceive that electronics are produced on quiet,
clean assembly lines by robots or special technicians. But the reality is that products that are assembled overseasmay be done so by hand, by workers on low pay, working long hours, often in poor working conditions. Most of us would also assume Apple products fit the ‘clean assembly
line by special technicians’ perception, but as many national newspapers have reported recently, they have actually been part of one of the highest-profile cases of where manufacturing overseas has severely backfired. This was largely due to the use of N-hexane, a solvent that evaporates faster than regular rubbing alcohol, allowing workers to wipe the screens of iPhones more quickly and speed up the assembly line. However, N-hexane is also a neurotoxin, leading some workers assembling iPhone’s to lose control of their hands and several to report accompanying skin pathologies and leukaemias. Some of the other issues that you face if your supplier uses
overseas manufacturers, who you haven’t audited, include health & safety concerns of workers including child labour; the impact of natural disasters – earthquake, flooding etc; the environmental impact on your product’s carbon footprint; and, finally, if your UK supplier doesn’t hold a significant amount of assembled stock of your product, you’re at risk of being let down if a natural disaster hits!
What should you do? While 99.9% of Fascia’s supplied products also come from within the UK, that does not mean that we do not follow strict procedures to audit our suppliers. We are also keen to ensure that our suppliers are as concerned with the environmental, and the social and economic implications of their activities, as we are. There are a number of key areas to cover when it comes to your
supplier and their suppliers: • Firstly, it’s important to know the point of origin for all materials and take accountability for what happens beyond your tier one suppliers. At Fascia Graphics, for example, we ask our suppliers to confirm that they know the full extent of the supply chain and view this as best practice.
• Can they also demonstrate materials that have the least environmental impact?
• Are they already approved by a reputable UK manufacturer? At Fascia we only use suppliers that have worked within our industry for many years, and we carry out six-monthly audits and ensure that they are REACH and RoHS compliant?
• Finally, be prepared for the worst – do you, your supplier, and their suppliers, have a contingency plan in place in the event of another natural disaster. We try where possible to dual source our materials, so if a disaster occurs then we have the ability to source our materials from a second source. This ensures that there are no delays in assembly and dispatch of our products.
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