Against the odds: The moulding of UK manufacturing Against the odds: The future of UK manufacturing
Against the odds: The future of UK manufacturing
The big admin burden The mix of responses to this issue only serve to demonstrate the hugely diverse nature of the UK manufacturing sector and highlight that the correct approach will vary massively from one business to the next. Accordingly, firms are planning a wide range of actions corresponding to their individual circumstances. Those planning to reshore supply chains are doing it primarily to reduce the import/export admin burden (29%), reduce their regulatory burden (28%) and reduce costs (27%) – potentially as a continued fallout from Brexit. Offshoring supply chains is most popular with firms in Greater London (41%) and least popular with firms in Scotland (14%), perhaps due to better international connectivity in the capital. And when it came to production operations, again, Greater London firms are more likely to offshore (34%) and Scottish firms least likely (6%). The supply chain chaos caused by Covid-19 and its aftermath, as well as a growing focus on ESG, was supposed to have prompted a reversal of the offshoring trend, as firms sought to reduce product miles and lead times, while also providing more control over supply chains. But our survey found that the reality is not that clear cut. On balance, only marginally more manufacturers are planning to reshore parts of their supply chain (33%) and/or production operations (36%) over the next year, than are looking to offshore supply (27%) or production (24%). Reshoring & offshoring
Reshoring production is chiefly motivated by the desire to reduce costs (33%), improve ESG (30%) and because overseas partners are no longer willing or less willing to supply to the UK (29%). Those planning to offshore supply chains are doing it for myriad reasons – namely to reduce costs (36%), for data/ IP security (30%), to reduce import/export admin (30%) and to reduce delays (29%). And those planning to offshore production are hoping to reduce the administrative burden relating to differences in regulation (33%), (perhaps counterintuitively) improve ESG (31%), reduce the administrative burden related to import/ export (29%) and reduce costs (28%). Looking at the survey responses, it’s clear that admin is a key element in the offshoring/reshoring argument, which isn’t often brought up in the narrative we hear in the media. Admin represents a significant cost to manufacturers and anything that can reduce that burden – including the aforementioned adoption of automation and AI – will be valuable. At the same time, there’s no doubt that labour costs overseas can be significantly lower than in the UK. However, again, UK manufacturers can help mitigate that by adopting technologies that can boost efficiency and free up those commanding salaries to focus on more strategic initiatives.
Offshoring elements of the manufacturing process was a key characteristic of the pre-pandemic landscape
Top reasons to reshore supply chains
To reduce administrative burden related to import/export
29% 28% 27% 26% 25%
To reduce administrative burden relating to differences in regulation
To reduce costs
To capitalise on associations with ‘Brand Britain’
To reduce risk of supplier insolvency/collapse
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