Manufacturers re-shore production in response to supply risks

The change is in response to increased disruptions to supply chains caused by recession and natural disasters, it said.

A survey by the manufacturers’ organisation shows that as a result of economic events and natural disasters in recent years that have had tangible impacts on revenue, orders and meeting customer requirements, companies are reviewing their value chain and supplier strategies. 

The average manufacturer has 190 suppliers, with one in five saying half their suppliers were located outside the UK.

Two fifths of companies are bringing production back in-house, whilst a quarter have increased their use of local suppliers in the last two years.

As a result of recent disruptions, one third of companies sees supply chain management as a business critical issue worthy of board level attention whilst 60% of companies monitor their immediate suppliers.

 However, despite the potential risks to disruption the survey also showed that only 11% of companies monitor their entire supply chains and 16% of companies do not monitor their suppliers at all.     

David Ost, EEF North West region director, said: “Supply chains have become increasingly globalised for manufacturers and while this brings a range of benefits, there are risks attached when things go wrong.  

“Manufacturers have been hit by a host of unforeseen events over the past few years which has not only provided a serious test of supply chain monitoring and business continuity planning, but has also led companies to think about how they structure and work with supply chains. 

 

“The UK needs to capitalise on this window of opportunity to re-shore production and rebuild key manufacturing capabilities. This means removing obstacles for manufacturers looking to expand capacity or diversify into new areas and creating a business environment that pulls in every pound of vital investment to our economy.”