Manufacturing reshoring background information.
Many UK manufacturing companies took the approach of offshoring their manufacturing and production facilities a few years ago when the costs for manufacture appeared significantly lower than could be achieved on home soil. In a rapidly changing global economy the offshore manufacturing model may no longer be as viable.
Global numbers indicate that cost savings on manufacture may mean it is only 12% lower cost to build abroad. China is looking at becoming increasingly middle class with 13% salary increases predicted
Manufacturing reshoring the advantages
- In the majority of cases new products tend to evolve as opposed to being invented, its an evolution as opposed to a revolutionary approach. Evolution often comes about as a direct result of the process of manufacturing. Having the manufacturing facility on site means that efforts are constantly directed at seeking improvements and enhancements
- Keeping your eye on the manufacturing processes allows you to develop an optimum approach with the rationale of then rolling out to other plants or subsidiaries. The classic example of this is Bosch who make everything in Germany
- Its amazing but one of the areas that continues to be difficult to maintain when manufacturing is taking place overseas is quality. The very nature of having product on the water for so many weeks means that in the event of a quality issue, replacing components has significant implications
- Intellectual property if your developing a complex product its difficult to patent
Manufacturing reshoring examples
- Within the food and drink industry “Pot Noodle” are now made in Yorkshire
- Manufacture of furniture to Dunelm and John Lewis is now made in the North East
- BT, Aston Martin and GSK all reshoring
Reasons given for manufacturing reshoring
- Be near to the actual customers
- Get closer to the national innovation centres
- Move away from the risk centres