Product design consultancies are all too familiar with dealing with manufacturers in the Far East. However, Tanya Weaver wonders whether the tide is turning and ‘reshoring’ is indeed happening
I remember a product designer once describing to me their experiences of visiting a manufacturing partner in China. He relayed how he travelled for two hours by car from the airport and all he passed was row upon row of factories. For quite some time China and other countries in the Far East have been the workshop of the world.
However, the tide seems to be turning in a move known as reshoring.
I’m starting to notice this reshoring trend myself in the companies and product design consultancies I’ve been speaking to recently. For instance, in this month’s article ‘First Timers’, consultancy PDG describes how it got quotes from both a Chinese and UK toolmaker for a client project and decided to go with the UK one as it proved to be cheaper.
The client supported this view who deemed that ultimately going to China would delay the project and prove to be a false economy.
So, the mass exodus to ‘cheap China’ which happened in the 1990s and 2000s seems to be slowly reversing. Chinese manufacturing wages have risen, the Chinese Yuan Renminbi has gained in value against the dollar and the pound and shipping costs have escalated.
The prototyping industry didn’t seem to suffer quite so much because, from what I gather, this service is largely still sourced on these shores or in Europe. The same is true for the manufacture of critical components, such as those found in medical devices.
However, it’s the UK toolmakers that seem to be experiencing a reversal of fortune. For instance, Birmingham-based toolmaker Brandauer, a contract presswork and stampings company, is experiencing an upturn in demand from UK and European customers.
But this return of production processes to the UK is not only coming from smaller companies and design consultancies setting up supply chains on behalf of clients, but some high profile manufacturing firms too. Jaguar Land Rover has stated that it’s going to reshore tooling and components for its premium automotive products.
So, what are the reasons driving this trend? Cost is an obvious first reason. As we’ve discussed above, China and the Far East is no longer the cheap option, especially when you take into consideration additional hidden costs such as flying out to visit the factory and dealing with any potential problems that may occur.
A second reason is quality control. It can be argued that being closer to your suppliers means that you have greater control over the quality of products and components.
A third reason is logistics and transport. If the supplier is in the UK they are a car journey away as opposed to a plane journey. It also makes communication easier. For one thing, you share the same time zone and also speak the same language.
Although Skype is excellent to communicate with Chinese factories, you often need a trusted local agent to deal with the factory. Also, if you are a bit of an eco warrior concerned about your carbon footprint, your goods will no longer have to be shipped from half way across the world.
A fourth reason is shorter lead times and speed of delivery. Someone once told me (he was in the supply chain game) that in the future time will be the new currency. Clients are constantly pushing design consultancies to compress the design and development phase so that they can be first to market.
With Far East suppliers you could be waiting up to 12 weeks for a container to load and then arrive by sea. This is drastically reduced if the supplier is in UK.
The last reason is intellectual property (IP). There is certainly something appealing about having your or your client’s IP protected with production companies bound by UK and EU law.
These are all good reasons but what I found interesting having spoken to some designers, is that the move back to the UK is really being driven by clients who are actually requesting that manufacturing be sourced in the UK.
Is this simply down to the reasons stated above or could it be a touch of patriotism? I think it could be. We should admit that there are still negative connotations associated with ‘Made in China’ as opposed to ‘Made in Britain’ (or ‘Made in USA’ as reshoring is happening across the pond too).
But, to bring some balance to the picture, this local outsourcing is certainly not the case in all instances. Some design consultancies and companies have a very good relationship with manufacturing partners in the Far East that dates back many years and are very happy with the quality and service they receive.
For instance, I recently visited marine equipment supplier Lewmar (October’s cover story) down in Havant, which does actually manufacture its own products but when it comes to the prototyping of metal products for testing its uses a Taiwanese company that it has worked with for many years.
It produces the majority of Lewmar’s stainless steel and aluminium castings for production to a very high standard and extremely quickly. Faster, according to Lewmar’s head of design, than some UK companies will take to quote.
This is not the first time I’ve heard this either. There seems to be quite a lot of grumbling about getting a quote request out of UK suppliers for competitive prices.
The general consensus, or what I have heard at least, is that a supplier in the Far East will quote in a few days and chase for a reply whereas UK companies need to be chased or don’t come back at all. In the UK, there is also the issue of finding suitable manufacturers who can fulfil the task.
Despite these challenges, is this slow trickle of manufacturing back to the UK going to turn into a flood? Will we experience a manufacturing renaissance?
As always your views and comments are welcome.
Is the tide turning and manufacturing slowly returning to the UK?