When economists wrote their forecasts for 2020 in the months before, nobody predicted a Covid-19 global pandemic would change the shape and scale of the entire global economy, as we know it. Now, as the UK begins to reignite the economy and businesses are returning to work, should companies look to start re-shoring their manufacturing and supplier base from the Far East to the UK?
The UK needs to be more self-sufficient [and less reliant on the rest of the world]
One thing we’ve certainly learnt from the outbreak, is that the UK needs to become more self-sufficient. When the Coronavirus reared its ugly head, we were not prepared. We did not have access to PPE and other essential medical equipment to support the NHS and front-line staff. This taught us a big lesson and as businesses get back into operation, they will start to think about re-shoring their supplier base to reduce risks. Richard Gamble, Managing Director of the ENL Group says, “If you look at the shortage of PPE in the country and our reliance to buy from China, you realise that these are products we can easily manufacture in the UK and so British businesses will begin to re-shore their supply chain wherever possible”.
Manufacturing will play a key role in the UK economy’s revival
Richard continues by highlighting the critical role that Manufacturing will play in rebuilding the economy, “There’s no doubt there will be casualties. People will lose their jobs and certain sectors [such as hospitality] will suffer more than others. Manufacturing has an opportunity to help kickstart the UK’s revival – as we become more self-sufficient, we will not only retain jobs but create new jobs in the manufacturing sector”.
Re-shoring your supplier base creates new cashflow benefits
For any business, cash is king and, for most businesses, cash is tight. As well as protecting and having more control of supplies, UK businesses will benefit from better cashflow by re-shoring their supplier base. “When you buy from China, you have to buy product upfront – up to eight weeks in advance – but this impacts cash. Cash is now an issue for UK businesses, who will need to reconsider their options” explains Richard. “In the UK, you typically pay on account, which gives a business 30 days to pay from invoice. This will really help a business’ cash flow”.
A different perception of UK Manufacturing
Once upon a time, Manufacturing was perceived as undesirable, “You wouldn’t want your child to end up in Manufacturing. Office jobs were seen as more successful” reflects Richard. “In the US and Germany there is greater respect and emphasis on Manufacturing, where an engineer is regarded a very important role. This is reflected in the level of output from those respective countries”.
“When you look at how UK manufacturers responded to the NHS crisis – to help produce life-saving equipment – you can see how critical and inspiring the industry is”.
“With Manufacturing set to become an important part of the UK economy for the foreseeable future, I think this could this be a chance for us to nurture the innovators of tomorrow. A real opportunity for the UK to become pioneers in cutting-edge design and technology.”
If you’d like help or advice about re-shoring your moulding requirements, please contact us at ENL