Why it could be time to consider manufacturing in the UK

There's no denying that manufacturing in the UK is not what it once was. While the 70s saw manufacturing contribute a significant 25% of UK GDP, today it accounts for more like 10%.

But despite the declining numbers, it's not all doom and gloom. The UK remains the 11th largest manufacturing nation in the world and 85% of Britain's manufacturers are feeling positive about the economy over the next one-three years.

And there's good reason for them to be upbeat. No longer is it simply standard to look to foreign shores as your first point of call to get your product made. With the ???Made in Britain' tag becoming increasingly desirable and costs becoming more competitive, a rising number of start-ups are either starting out manufacturing in the UK or looking to bring their manufacturing back here - at some point.

With one of our Startups Awards Winners' Dinner attendees doing just that (lightweight aluminium kids' bikes business Frog Bikes has recently moved its manufacturing to Wales), talk turned to the pros and cons of manufacturing in the UK - posing the question: Should more businesses consider giving their products the ???Made in Britain' stamp?

Why manufacture in the UK?

Shelley Lawson, Frog Bikes

"Operationally we're focused on getting our own factory [in Wales] up and running. This will mean a lot of operational improvements for us. We want to be able to have shorter lead times, predicting what stock we'll need. Quality should improve, predictability should improve and there are some massive environmental benefits of controlling where our energy comes from and where our packaging comes from, how we recycle. All of that will help the business."

"The welsh government have also supported us [with significant funding] because we'll be creating jobs in Wales."

"We're learning lots but it's been very well-received by the market. People love that we're manufacturing in the UK."

David Cox,  haysmacintyre

"After a period of offshoring, we're seeing clients moving their manufacturing back to the UK. As costs of overseas production have increased the financial benefits have diminished.

"Some clients have experienced significant issues over their offshore production lines and are now bringing them back under closer control. The UK still retains the skilled technicians that enable businesses to produce high-spec products."

What are the challenges of manufacturing in the UK?

Suzanne Brock, Nutriment

"We're in manufacturing and we spend a lot of time thinking about how we could not manufacture our own products - just because it's not without its own challenges. What made you decide to go in-house? Was it just profit margin? Or are there certain controls you want to put in?"

Shelley Lawson, Frog Bikes

"It's more about controls, quality controls, generally just more predictability of what comes out."

Suzanne Brock, Nutriment

"And I think they're absolutely what you get from making your own [products]. It's a very brave move and I'm massively impressed that you're going from what your business model was before into manufacturing in-house. It's a massive leap."

Shelley Lawson, Frog Bikes

"While it will shorten our lead time by about six-eight weeks, it has meant that instead of having a relationship with two providers in the far-east we've had to establish relationships with 60 different componentry suppliers, so we've taken on a Mandarin speaker who's out in the far east negotiating for us.

"Every one of these 60 has to deliver - and that's really nerve-wracking. They're not really used to European companies buying in that way, they're mostly used to assembling everything in China so it's a bit of a cultural change as well. But we're sort of big enough that we're taken seriously."

Should more businesses manufacture locally?

Julien Callede, Made.com

"We actually manufacture 65% in the far east. If you pay the right money, you can get the right product in the far east. But we've also always been manufacturing in Europe and in the UK. Our first factory was a UK upholstery factory because communication was easier and lead times were definitely better. If you can save three weeks of manufacturing and four weeks of shipping it not only decreases the lead time for the customer but decreases the complexity of your inventory management.

"We've been trying to find a rug manufacturer for two years all over China and we found that some were lacking in quality. We then ended up in India with a manufacturer that was making rugs for high end brands.

"And we do textiles, we're fairly well-known for this. In the UK we do upholstery on framed items and wooden furniture so it's a bit of a mix. The decision on the country comes from two reasons. The speciality of the raw materials that the factory is using and also the way you want to manage your inventory. It's your lead time against your cash investment in the business."

Shelley Lawson, Frog Bikes

"We still [currently] make our own frames in the far east, it's not cost-effective enough yet to make the aluminium in the UK. There's a growing industry in Portugal so it's possible we might move to Europe in the near future."

Peter Nicholas, Nutriment

"If we were going to do it all again, we'd do what some competitors do, and get someone else to make it first (you may think they make it in their kitchen when they don't). And then we would manufacture it second. We didn't know any better so we started a factory.

"It's a great second move definitely."

And finally, is manufacturing undergoing a big transition?

Julien Callede, Made.com

"I don't know. For years we've been saying that manufacturing is going to go back to Europe and it would be good if it does but I don't see a big switch in manufacturing - yet!"

 

Source: startups.co.uk 

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