Reshoring: Why would you bring manufacturing back to UK?
Resourcing back to the UK, often referred to as reshoring or onshoring, involves bringing manufacturing, services, or other business operations back to the UK from overseas. This trend has gained traction for various reasons, including economic, political, and operational factors. Here are key points to consider when planning to reshore operations to the UK:
1. Reasons for Reshoring
- Cost Management: Rising labour costs in countries like China and increased tariffs can make overseas production less cost-effective.
- Quality Control: Proximity to production sites can enhance quality control and reduce the risk of defects.
- Supply Chain Resilience: Shorter supply chains are less vulnerable to disruptions, such as those experienced during the COVID-19 pandemic, or the present global political uncertainty
- Customer Demand: Increasing consumer preference for locally made products can drive reshoring. Along with the drive to low carbon footprint.
- Government Incentives: The UK government offers various incentives for companies to bring operations back home, including tax breaks and grants.
2. Steps for Reshoring
- Feasibility Study: Assess the financial, operational, and strategic implications of reshoring. This includes cost comparisons, analysis of supply chain logistics, and market demand.
- Location Selection: Choose the appropriate location within the UK based on factors like workforce availability, infrastructure, and proximity to suppliers and customers.
- Investment in Technology: Utilize advanced manufacturing technologies, such as automation and AI, to enhance efficiency and reduce costs.
- Skilled Workforce: Ensure access to a skilled workforce, possibly requiring investment in training and development programs.
- Supply Chain Reconfiguration: Redesign the supply chain to integrate with local suppliers and logistics networks.
- Regulatory Compliance: Navigate UK regulations regarding labour, environmental standards, and trade policies.
3. Challenges and Considerations
- Initial Costs: Upfront investment can be substantial, including costs for setting up new facilities and acquiring technology. Including the training of new suppliers to your company culture.
- Labor Costs: UK labour costs are generally higher than in many offshoring destinations, which can impact profitability. Which can be offset by effective production engineer and technology.
- Economic and Political Climate: Stay informed about the UK’s economic policies, trade agreements, and political stability.
- Infrastructure: Ensure that the chosen location has adequate infrastructure to support your operations, including transportation, utilities, and communication networks.
4. Benefits of Reshoring
- Improved Quality and Innovation: Closer proximity to R&D can foster innovation and improve product quality.
- Enhanced Brand Reputation: Promoting products as “Made in the UK” can enhance brand perception and loyalty.
- Environmental Impact: Shorter supply chains reduce the carbon footprint associated with transportation and logistics.
5. Case Studies and Examples
Look into successful reshoring examples in your industry to understand best practices and common pitfalls. Companies like Rolls-Royce and Aston Martin have successfully reshored parts of their operations to the UK.
Conclusion
Reshoring can provide numerous strategic advantages, but it requires careful planning and consideration of various factors. Conduct thorough research, engage with local authorities and business development organizations, and consider partnering with experts, such as Rimplas, in reshoring to ensure a smooth transition.
