Tuesday, 8 July 2014

Driving Home Quality - Re-Shoring into the UK

A number of companies I have visited over the last few months have all had the same reason as to why they are contacting us.  All the companies are manufacturers, in different industries but the tale is the same.  They are all seeing an increase in business.

On the face of it this is driven by (finally) a boom in the UK manufacturing industry, especially the well documented success in the automotive sector.

But on closer inspection there is also another, more interesting reason, why these manufacturers are having to increase output.

Time and again it appears that organisations that moved their manufacturing 'offshore' are bringing those cells back to the UK.  In the last 2 months 3 different companies have explicitly told me this is the main reason for growth on their particular site.

More interestingly is the reason why which also appears to be the same.

We all know the initial drive to move manufacturing away from these shores to Eastern Europe, Asia and China most of all was cost.  And despite an increase in the expectation of wages for the workers in these countries, it still seems to be the case that, for the accountants at least, there is a good financial reason to keep the production where it is.

However, what is driving the return to the UK is in fact product and component quality.  The expectation of the customers for a consistent and high quality product has brought home to many producers the value of domestic skilled labour and mature systems and procedures to ensure this.
"Reshoring could create around 100-2oo,000 extra UK jobs over the next decade, and boost annual national output by around £6-12 billion" PwC UK - read the article 
The initial go live of remote manufacturing sites a few years ago was carefully controlled and managed in most cases to ensure the transition of product and the supply chain all went without a hitch and the client would not notice a difference expect in the monthly invoice.  However, colloquially it appears that as the years have gone by quality controls may have slipped and reported failures and returns have increased.

Not what any company wants in a very competitive market.

Also companies like BMW/Mini and JLR operate remarkably involved just-in-time systems and having the supplier located 20 miles away as opposed to 6,000 miles away makes a huge difference to the levels of customer service that can be offered and more importantly maintained.

What this return of and increase in business does bring into focus is the need for efficient internal systems and Auto-ID driven warehousing and logistics to ensure the most accurate and lean process.

Having a second bite at the cherry seems to have made people aware of the need to invest in barcode driven data capture and smart, integrated labelling and marking to drive home the message of a consistent and quality product and service levels.

With our expertise and extensive knowledge in these areas, working with our clients we can play a small part in ensuring the repatriation of manufacturing to the UK.

Written by Nigel Holloway - a senior sales consultant at Dash Computer Products, who specialises in barcode labelling systems, hand held and fork truck mounted computers and data capture solutions.
contact Nigel on 01200 441977 or email here:  Nigel@Dash Computer

2 comments:

  1. Excellent article Nigel, echoes many of the findings in the FT and PwC reports about businesses moving back to the UK. I also read that labour flexibility was another major factor, particularly in the Automotive sector.

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  2. Very interesting. I was reading the Society of Motor Manufacturers and Traders annual report for 2014 which stresses that very point. When I have fully studied this I will write another post!

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