Tuesday, March 4, 2014

News: Survey shows companies are continuing to reshore manufacturing

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The gradual trend towards reshoring production in-house and sourcing UK based suppliers, is continuing according to a major report released this week by EEF, the manufacturers' organisation and global law firm Squire Sanders.

According to the report "Backing Britain – a manufacturing base for the future," one in six companies have reshored production back to the UK in the last three years. This compares to one in seven companies in 2009.

In January, UK Trade & Investment (UKTI) joined forces with the Manufacturing Advisory Service (MAS) to launch Reshore UK, a new one-stop-shop service to help companies bring production back to the UK.

UKTI recently identified 1,500 manufacturing jobs reshored in the UK since 2011 and a MAS survey showed companies citing costs, quality and reducing lead times as the top three reasons for moving production back to the UK. The EEF survey also shows that the main reason for reshoring production is to improve the quality of products and components, cited by 35% of companies.

Some 84% of survey respondents emphasise an advantage to their business brand and reputation from the production of UK-made goods, the quality of which is held in high regard around the world.

Terry Scuoler, chief executive at EEF, said: "The trend may be gradual but is highly encouraging to see more re-shoring continuing. While it will always be two-way traffic, the need to be closer to customers, to have ever greater control of quality and, the continued erosion of low labour costs in some competitor countries means that in many cases it makes increasingly sound business sense."

Reshore UK will provide a matching and location service, access to advice and support and a named individual to help each company. MAS's role is to help support small and medium sized businesses to be globally competitive and to ensure there is capacity in the UK supply chain to take advantage of the reshoring opportunities. UKTI will use its global networks to attract foreign companies to invest.

Lombard, the UK's largest asset finance provider, has also seen evidence of the reshoring trend. Lombard recently celebrated its 150 years in business since it began hiring out rolling stock to the railways as the North Central Wagon and Finance Company in Rotherham in 1861. It still has around 600 staff in Manvers and specialises in products such as hire purchase, operating lease and sale and leaseback.

Richard Hemsley, managing director of Lombard, said: "We have worked with a number of customers recently who have made the decision to bring a greater proportion of the manufacturing process back to the UK. These customers have found it both more cost effective and efficient, speeding up productivity and delivery of lead times as well as providing wider benefits such as the creation of new jobs.

"We are eager to identify how the asset finance industry can support the investment requirements for others adopting the approach to "Make it in Britain.""

EEF website
Lombard website

Images: EEF

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