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Manufacturing A Strategic Advantage

The benefit to reducing lead times

A UK company manufacturing a product for the poultry industry and who were exporting 75% of their products were designing and assembling in the UK but having the injection moulded plastic components manufactured in China. The quality of the plastic components was excellent and a few years ago when the manufacturing was shipped off shore provided what seemed a significant cost saving.
The company had reason to investigate moving manufacture back to the UK and this investigation identified a number of interesting advantages to using the UK for manufacture as opposed to China

  1. By moving the manufacture to the UK meant that the company had the security of the tools being in the UK. The classic situation of being able to touch and feel the tooling when it is located close to you
  2. Having the tools located in the UK meant that it was easier to finance new tooling
  3. The most important factor / change was the significant reduction in lead time. Lead time was reduced from 16 weeks to 1 week, which had a massive impact on the amount of stock holding required and the subsequent effect on cash flow and storage

When all these factors were taking into consideration it was actually beneficial to have the injection moulding manufacture within the UK. Interestingly in trying to find injection moulders who could match the quality of their Chinese counterparts proved surprisingly difficult.

Manufacturing A Strategic Advantage

Manufacturing performance over time

The difficulty to find quality injection moulders could link to the following

  • Thirty years ago twenty percent of the workers in the UK were involved in manufacturing
  • Last year only seven percent of workers involved in manufacturing
  • From a gross value added perspective ( a scoring mechanism much loved by the government) the UK has slipped from 5th to 11th
  • Growth in services has significantly outstripped our performance in manufacturing
  • In the UK we have a shortage of 100,000 engineers and don’t appear to have mechanisms in place to overcome this shortfall

Manufacturing A Strategic Advantage

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