SECTOR FOCUS: MANUFACTURING Reshoring
– The UK manufacturing trend of 2014
LORRAINE HOLMES, Area Director of the Manufacturing Advisory Service (MAS) in the North and West, explains why reshoring is an opportunity manufacturers - both small and large - should seize with both hands.
Lorraine Holmes, MAS Area Director for the North and West
W
hen the results of our Barometer on manufacturing SME confidence were released, little did we know we would be playing a small, but important part in creating one of the business trends of 2014. Figures from this survey, which covered just over 530 firms from across England, gave the first clear indication that reshoring is actually taking place in our industrial base.
Our advisors working on the ground had certainly seen evidence of it, but what we didn’t expect to witness was such a paradigm shift from sending work overseas to actually bringing it back home. Eleven per cent of manufacturing SMEs we questioned said they had or were planning to reshore parts of their production. Not a huge number by any means. However, when you compare this with just four per cent planning on ‘offshoring’ it was enough to suggest the tide was well and truly turning.
What made for even more interesting reading was the drivers behind this trend. For so long, West Midlands manufacturers felt that it was cheaper to produce certain products and components in low-cost countries and this saw a strong migration of activity towards Eastern Europe and the Far East.
The supply chain wasn’t perfect, but a lot of management teams were prepared to take the pain for the financial impact it made on the bottom line. This no longer appears to be the case. More than a quarter of respondents said that concern over cost was the principal reason for reshoring, followed by improving quality (20 per cent) and reducing lead times (18 per cent).
Should we be surprised by this? Not really in my opinion. Wages are rising dramatically in low-cost manufacturing bases and the price of logistics continues to escalate. However, this perhaps misses the biggest factor of all; the price of the landed part is considerably more than the one you receive on your quotation.
What this means in layman’s terms is that time delays in transport issues with having to send components back and possible breakdowns in customer relationships all add up to a potentially expensive option. I think we also have to praise our own manufacturers for the way they have bounced back from the global economic downturn by
becoming smarter, leaner and faster. It hasn’t been easy and there have been casualties along the way.
The reality is that our manufacturing base is now more globally competitive and eager to explore new international markets than it was pre-recession.
Introducing ReshoreUK
A lot has happened since the MAS Barometer was made public. Millions of pounds of national press, trade coverage and TV appearances hurtled the topic of reshoring into the public eye and this was soon to become even more prominent.
The Prime Minister, whilst attending the Davos World Economic Forum, made his intentions clear… “Britain can be the reshore nation.” Bold words and ones he quickly backed up with the announcement of a new initiative called ReshoreUK.
In a nutshell, this is a new ‘one stop shop’ service run by UK Trade and Investment (UKTI) and MAS that is set to help manufacturers take advantage of the business opportunities created by reshoring. This takes two forms. UKTI is responsible for drawing on the UK’s position as the leading European destination for foreign direct investment by working with international firms to establish a manufacturing or R&D base in this country.
Its role is to convince these organisations of the benefits of locating here and then offer support with supplier matching to help create a robust supply chain.
Our role at MAS is to work with SME manufacturers in the West Midlands to ensure they are ready to take advantage of reshoring and new investment by providing them with strategic and technical advice, visibility of new supply opportunities and then signposting them to potential funding support to enhance capability to make it happen. Each company will have a dedicated manufacturing advisor who will work with them through the entire process to ensure they have the processes and capacity in place to meet future demand. ReshoreUK is also there to meet the desire of smaller firms to bring parts of their own supply chain home, firms like RDM who now manufacture a re-chargeable torch for Jaguar Land Rover at its new advanced engineering centre in the region.
42 GREATER BIRMINGHAM CHAMBERS OF COMMERCE DIRECTORY 2014/15
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108 |
Page 109 |
Page 110 |
Page 111 |
Page 112 |
Page 113 |
Page 114 |
Page 115 |
Page 116 |
Page 117 |
Page 118 |
Page 119 |
Page 120 |
Page 121 |
Page 122 |
Page 123 |
Page 124 |
Page 125 |
Page 126 |
Page 127 |
Page 128 |
Page 129 |
Page 130 |
Page 131 |
Page 132 |
Page 133 |
Page 134 |
Page 135 |
Page 136 |
Page 137 |
Page 138 |
Page 139 |
Page 140 |
Page 141 |
Page 142 |
Page 143 |
Page 144 |
Page 145 |
Page 146 |
Page 147 |
Page 148 |
Page 149 |
Page 150 |
Page 151 |
Page 152 |
Page 153 |
Page 154 |
Page 155 |
Page 156 |
Page 157 |
Page 158 |
Page 159 |
Page 160 |
Page 161 |
Page 162 |
Page 163 |
Page 164 |
Page 165 |
Page 166 |
Page 167 |
Page 168 |
Page 169 |
Page 170 |
Page 171 |
Page 172 |
Page 173 |
Page 174 |
Page 175 |
Page 176 |
Page 177 |
Page 178 |
Page 179 |
Page 180 |
Page 181 |
Page 182 |
Page 183 |
Page 184 |
Page 185 |
Page 186 |
Page 187 |
Page 188 |
Page 189 |
Page 190 |
Page 191 |
Page 192 |
Page 193 |
Page 194 |
Page 195 |
Page 196 |
Page 197 |
Page 198 |
Page 199 |
Page 200 |
Page 201 |
Page 202 |
Page 203 |
Page 204 |
Page 205 |
Page 206 |
Page 207 |
Page 208 |
Page 209 |
Page 210 |
Page 211 |
Page 212 |
Page 213 |
Page 214 |
Page 215 |
Page 216 |
Page 217 |
Page 218 |
Page 219 |
Page 220