British Manufacturers had a tough time during the recession as companies struggled to manage falling margins and sparse order books. However, all the evidence points to bright times ahead, with British manufacturing on the increase.
One of the most significant factors in this reversal of fortunes has been the rise in domestic demand. As a specialist engineering company supplying components to a range of sectors, we have noticed a significant rise in the demand from British manufacturers and our customers are pacing an increased emphasis on high quality and fast turnaround. Of course, price remains a factor, but if other demands are met, it seems that companies now have the financial confidence to pay for improved quality and service.
Of course, it’s great to take pride in our country and the products we produce, whilst the advantages to the economy and employment of buying British are fairly evident. However, there are other important commercial benefits of buying from the domestic market. The carbon footprint created by a company’s suppy chain is becoming an increasingly significant factor as the government and the EU impose strict environmental targets on industry.
Sourcing products from the domestic market is inevitably greener than shipping goods from the Far East for example due to the amount of CO² used to transport them.
Furthermore, the quality of British manufacturing is quite simply superior to many other countries. Western manufacturers in general and UK manufacturers in particular, have a very strict approach to quality, stemming from their long heritage and well established generational skills base. This means that British firms can draw on a resource of people who have an eye for detail and who can finish products to a high standard than fund in many parts of the world.
The practice of outsourcing appears to have declined as economic confidence has increased. Whilst it has its place, many manufacturers turned to outsourcing during the economic downturn as a way of saving money – sometimes at the expense of quality and service.
One of the major disadvantages of outsourcing is the surrender of control. Whether outsourcing a single task or the work of an entire department, once the contract is signed, you have effectively handed the management of that function to another company. Problems may then arise if the partner company has different standards and ethos to those which underpin your organisation. Quality and customer service may be an important selling point for you – but your outsource partner will be mainly driven by profit.
Many companies go into the process unsure of what to expect or how to negotiate the best deal. The terms of the contract are key: whilst it should include details of the service that they are providing, be aware that anything not covered in the contract is likely to incur additional charges. Legal advice can be expensive, but if entering into a contract, it’s always advisable. The outsourcing company will be more experienced in drawing up these types of contracts. Furthermore, as they write the contract, they immediately have the upper hand in any negotiations.
Many people have mixed feelings about outsourcing: it can help to keep costs down and create employment. However, it can also have a hugely negative impact on industry and communities, causing factories and companies to shut down or reduce their workforce. Using foreign companies may create bad feeling whilst outsourcing part of your operations can be unsettling for your work force.
If Britain is to maintain its reputation for quality, continued investment in R&D is essential. Whilst some manufacturers held true to the importance of investment and innovation during the downturn, inevitably, R&D in some organisations fell by the wayside in the struggle for survival. The good news is that the increased confidence appears to have reignited the desire for R&D, with many manufacturers reporting their intention to invest in plant and machinery, buildings, products and processes.
As both demand and confidence continue to rise, this can only have a positive impact on innovation throughout the industry. After all, with one of the finest manufacturing sectors in the world here in the UK – why go further afield?