National Manufacturing Debate – Reshoring
Reshoring is fast becoming a hot topic and was the focal point of this year’s annual National Manufacturing Debate, held at Cranfield University in May. It highlights the challenges for companies operating in an increasingly global marketplace and also provides an interesting insight into the ever changing currents of modern supply chains.
Recent reports from EEF suggest that one in six UK based manufacturers has re-shored production in the past three years – either through shortening their supply chain or by physically relocating production here. Furthermore has PricewaterhouseCoopers estimated that reshoring could create around 100,000-200,000 extra jobs over the next decade in the UK, and boost national output by around £6-12b at today’s values (0.4-0.8% of GDP) by the mid-2020s.
Reshoring – the reasons why
There are a number of factors affecting the decision for companies to reshore, they include (but are not limited to):
- Increasing labour costs (due to changing demographics) in countries such as China, Finland, Sweden & Denmark eroding the cost advantage of offshoring
- Product delivery and quality disruption
- The cost of transportation and logistics
- Fluctuations in exchange rates and unstable currencies
- Reducing the time to market
- Maintaining/improving customer service and satisfaction levels
- Greater flexibility and responsiveness to changing product and consumer requirements
- Reduced intellectual property risk
Increasing global competition has changed the focus in recent years away from price as being the primary competing factor. In the 2014 EEF Make it in Britain Survey factors such as Quality, Customer Service, On-Time Delivery and Brand/Reputation were cited as areas of competitive advantage. One of the key messages at the debate was that thinking globally needs us to act locally. Reshoring offers the chance for companies to not compromise on these vital criteria by having greater control, efficiency and visibility of the supply chain and production processes – consequently minimising disruptions and risks to customer service levels and ultimately making a real difference to the bottom line.
So how can we help?
Speed, flexibility and certainty are recurring themes through the debate surrounding reshoring. Manufacturing systems such as Seiki can provide the real time visibility and control needed to respond quickly to changing conditions and to deliver exactly what customers want, when they want it. We can help companies build greater certainty into their production schedules to facilitate greater responsiveness to new business opportunities, support JIT and maintain on-time delivery performance. Find out how: Seiki Manufacturing Execution System
- Cranfield University has some great resources available on their website, including white papers, data and videos from this year’s debate. Visit http://www.cranfield.ac.uk/about/events/listings/event-details/national-manufacturing-debate.html
- EEF’s Make It iI Britain campaign has a wealth of facts, figures and resources about UK Manufacturing http://makeitbritain.eef.org.uk