Time to ride the wave of reshoring?
The Engineering Network Ltd
Posted to News on 26th Oct 2015, 17:54

Time to ride the wave of reshoring?

China's slowing economy means it is time to jump on the wave of reshoring says Mark Anderson of Fascia Graphics.

Time to ride the wave of reshoring?

The Chinese economy is in flux. For the past few years it has been attempting to reshape, to focus less on exports and more on satisfying domestic demand. However, the recent slowdown has thrown this strategy into question.

This evolution of the Chinese economy has made manufacturing products there less attractive. Chinese workers' wages have been rising steadily, and the result is it is now just as cost effective to manufacture products in the West. As a result, UK and US manufacturers have been reshoring their supply chains, with a recent sourcing survey finding that a third (32 per cent) of North American and Western European manufacturers recently "re-shored' production or were in the process of doing so.

Fascia believes more UK manufacturers should follow this trend. A recent EY study has found that reshoring supply chains could create 315,000 UK jobs, and increase national output by over 15billion. Outside of boosting the local economy, there are many advantages to "making it in Britain'. Moving suppliers to the UK means you can have tighter controls on day-to-day aspects of the business and the production process.

It's not just the UK economy that would benefit from a raft of reshoring; Fascia believes that there are a lot of benefits to bringing the supply chain closer to home, the key ones being:

1. Quicker production

A huge benefit stemming from shortened supply chains and low transportation costs is short lead times. You can respond to the latest trends and fashions and tailor production more closely to sales when there is only 1 week's waiting time rather than four. As a result you can offer a more customised product to your customers, enabling you to stay competitive.

2. Reliable supply chains

Supply chains where manufacturing is separated across the globe, so that each component is made wherever it is cheapest, makes them highly vulnerable. For example, extreme weather, natural disasters and geopolitical turbulence can halt the production of one or more of the components and bring the entire manufacturing chain to a halt. By having your manufacturing operations all in one place and your suppliers close, your supply chain is much less vulnerable to these disruptions, and in turn so are your manufacturing operations.

3. Quick and easy communication

There are no language barriers when dealing with suppliers in the UK, so any confusion is cut out, and there is less risk of a product arriving not as specified. There is no excuse for poor quality, but if for any reason there is a problem, it is a lot easier to call or visit the manufacturer. The fact that you're in the same time zone also means that sales and technical representatives are on hand to offer advice during UK business hours.

4. Reduced transportation costs

With the cost of transporting goods rising, companies can no longer rely on the consistently cheap shipping they had previously been used to. By having your manufacturing operations close to your customer base, transportation costs will be minimal.

There are naturally downsides with what is happening in China, particularly for large UK exporters. However, it is possible that reshoring can certainly counterbalance some of this. Sourcing from within the UK will also strengthen the economy, create job stability, and contribute to building the nation's growth and prosperity. If more companies bring production back home, they'll be able to supply a better product to market, at a fraction of the time, and we'll be able to continue to increase manufacturing output. For more information visit www.fasciagraphics.co.uk.


Fascia Graphics

Bath Road Industrial Estate
Bath Road
SN14 0AB
UNITED KINGDOM

+44 (0)1249 460606

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