There hasn’t been a year in recent history that has triggered so many businesses to rethink and reassess production as 2020. Many businesses looked to reduce costs and ensure supply is steady.
The latter is an issue we have seen increasingly in 2020 thanks to lockdowns in manufacturing hub China, as well as across Europe and the rest of the world. Add to that the border delays we saw pre-Christmas and potential complexities in the initial stages for companies post Brexit, and you have got a real challenge. Brexit reshoring and UK onshoring are on the rise, but is it the future of manufacturing in a post Covid-19 world?
2020 has enhanced the demand for reshoring; the process of moving the manufacturing of products from overseas to the business’ country of origin. These days, many businesses in the UK for example, find cost savings by moving their manufacturing production abroad. Of course, cost saving is not and should not always be the number one factor in manufacturing.
Quality, product longevity and fast turnaround times as well as reliable delivery are all hugely valuable. Reshoring manufacturing has both pros and cons, and businesses should think carefully about their objectives and potential challenges over the coming years as world economies recover from the impact of coronavirus and Brexit.
In addition to this, it is important to consider post Brexit, trading with the EU will now have further complexities and potentially cost implications, while exchange rates and accounting for dealing with suppliers overseas may also incur extra administration and translation costs.
Advantages of reshoring
When Covid-19 first struck, not only did stockpiling start to influence on the availability of products, but also delays in production and products crossing borders were inevitable. Reshoring in 2020 is now big business.
Reshoring can help businesses keep a closer eye on quality control, save costs in certain areas and help businesses meet their sustainability goals. A shorter supply chain and shipping time not only make for a greener business but can also help availability and stock levels.
For businesses who operate other arms of the company in a different location to manufacturing, reshoring offers the chance to employ more people locally and ensure everyone is working towards the same goal.
Reshoring and onshoring – what could this mean for quality control?
Why then, do companies still consider manufacturing overseas? Many larger overseas manufacturers run huge production lines meaning mass production is often easier and can in some cases be more cost effective. There can be limitations to this though, as white label goods are often pushed to businesses, whereas smaller productions may have longer lead times but may also be more inclined to offer bespoke or custom services.
It is also worth considering quality control and damage during shipments which can occur more frequently when products are in transit for longer periods. Customs charges can also be an issue.
For example, at Energy Technology and Control, we offer custom combustion solutions manufactured at our British manufacturing facility, something we would not be able to do without spending time working closely alongside our clients to build products to their specifications.
The UK is increasingly investing in manufacturing and ‘Made in Britain’ has become synonymous around the world as a mark of quality. As UK based manufacturers of plastic extrusions, at Energy Technology and Control we know only too well the reshoring benefits for clients. While some of our clients are British based companies who have moved their production back to the UK, the mark of quality associated with our manufacturing has also enabled us to pick up clients across the rest of the world too.
It is worth considering material costs if you are thinking of reshoring manufacturing in 2021. The decisive factor for some companies’ decision to start reshoring in 2020 was finding that material costs were cheaper and more easily accessible in the country they relocated their manufacturing to.
Is onshoring the key to manufacturing resilience?
Onshoring can help to invest in skilled workers locally and manufacturing specialisms, one of the key components of manufacturing resilience. Many companies measure themselves against competitors, thinking that if they offshore their manufacturing, they will need to do the same to be competitive.
The key is to think about business ethics, objectives, and reputation – what makes your business unique? Could you still provide the same level of service if supply issues were to crop up again – did your business manage to negate this during Covid-19 or Brexit? When it comes to resilient manufacturing, it’s important to have a back up plan and options. 2021 is a good time to explore the possibilities and futureproof.
Do you want to discuss UK manufacturing? We are a global leader in combustion controls and technology – please contact us today to find out more.