The benefits of manufacturing in Britain
A recent article from the Production Engineering Solutions website
According to the latest research by the Manufacturing Technologies Association (MTA), UK manufacturing accounts for nearly a quarter of the economy and provides more than 7.4 million jobs.
Trends in the UK automotive market are showing an increased appetite for UK manufacturing and an increase in the production of components locally, rather than contracting out to lower cost economies is on the increase. Jeff Kiernan, commercial director at Dawson Shanahan discusses what this means to British manufacturing.
Whilst the automotive sector is truly international, several factors is driving a trend towards the increase of manufacturing in the UK. These include the need to control manufacturing quality, being close to R&D centres and avoiding long delivery times.
A recent report in The Economist highlighted the fact that many businesses in the UK automotive industry are actively looking to source closer to home. This is backed by a survey from the Chartered Institute of Procurement and Supply (CIPS), which shows that one-third of UK companies are looking to re-shore their supplies from offshore suppliers to British equivalents.
The Economist shows that many UK-based car makers want to buy locally. This is partly for currency reasons, partly due to Brexit, but also to help them comply with potential free-trade deals, which will apply ‘rules of origin’ to products. Sunderland-based Nissan is blazing a trail, opening a centre near its factory to house local suppliers. This will help the company to double (up to 80%) the proportion of parts it sources from the UK.
There are many benefits to manufacturing in the UK and these include:
- Higher product quality: it is more straightforward to audit local manufacturing facilities, and re-order (or avoid) faulty parts – while building a rapport and trust with a local company is inevitably easier
- Shorter lead times: delivery times may be a few weeks for local manufacture, even for quite complex parts, but may be a few months from, say, China
- Smaller minimum order quantities: small, multiple orders are practical with local suppliers; and
- Proximity to R&D centres: cutting-edge manufacturing companies rely on their intellectual property in order to thrive, so being close to their main research centre makes sense. On the IP front, rights are easier to enforce on home territory
- Comparable prices: wages in developing economies are rising, which, combined with the current low value of sterling, makes UK prices ever more competitive.
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