Manufacturing Returns To The South West

With so much doom and gloom dominating the headlines, it’s encouraging to witness real examples of manufacturing prosperity in our region. We are seeing signs of manufacturing returning to the UK as overseas labour, energy and material costs continue to mount, dismantling many cases for foreign production. This is reflected in the growing number of requests for advice and support we are receiving from South West companies looking to bring manufacturing home.

With the right guidance and support, I believe manufacturers that produce their products locally can grow successful, profitable businesses. The cost benefits of producing goods in India and the Far East are diminishing faster than some analysts predicted with many countries now struggling to keep a lid on their own rapidly rising costs and high rates of inflation.

Businesses are learning that it’s not just about the direct cost of production. There are many other important factors to weigh up when developing strategies for the future. In a recent study by IDC Manufacturing Insights of 700 SME manufacturers across the globe, the majority rated customer service above cost as their top priority. Many companies admitted they were struggling to meet customer expectations due to the complexity of managing global supply chains and raised concerns about low levels of responsiveness, poor customer service and rising costs. They also highlighted additional risk factors associated with foreign production, such as diminishing intellectual property rights, proximity to markets, inflexibility and poor quality.

In the past few years, business strategies have centred on cutting costs. Now, companies are prioritising customer service. Production repatriation is moving up many boardroom agendas and we are working with a growing number of South West manufacturers who have done it – and are reaping the rewards.

Here are a few examples:

· A Devon company is winning an increasing amount of supply work previously done in the Far East for the European market, due to increasing labour and logistics costs.

· A Bristol business is now producing vital components in-house rather than in China where an inflexible and protracted supply chain together with a high level of quality issues made it unviable to continue with foreign production.

· A South Gloucestershire manufacturer is repatriating production of its injection moulding tools to gain ‘greater control’ and improve delivery lead times, reduce stock, improve quality and save costs.