Bringing manufacturing back to the UK, supporting local communities and top tips for growth during adversity. The second Virtual Breakfast Morning of 2022 truly had it all. Jonny Williamson reports.
IT’S COMING HOME
It seems as if each new week brings a UK reshoring success story. Appetites for bringing production closer to home have increased greatly in the wake of global supply disruptions.
More than 40% of manufacturers have already moved some production in-house or established UK-based supply chains, according to research carried out by The Manufacturer, and a further 70% intend to do so in the future.
Several factors are helping to reverse the 30-year trend of offshoring production, says Darren Webb, Sales Manager at Global Precision, including:
- SHOCK AND AWE – Global supply chains are complex and highly vulnerable to shocks, as seen during the pandemic, the Suez Canal blockage and numerous natural disasters.
- LVING WAGE – Businesses have benefitted greatly from the low cost of labour in Asian countries, but fast rising wages are eroding savings, especially in relation to China.
- QUALITY CONTROL – Sourcing genuinely certified materials can prove challenging. So much so that some businesses are buying direct from European distributors, shipping those materials to Asia for processing and then shipping the finished goods to the UK for sale and distribution. This convoluted journey presents a number of issues, not least the increase to cost and carbon emissions.
- SEPARATION ANXIETY – The UK is a world-leader in innovation, science and technology. But having your manufacturing capability on the other side of the globe detaches the development of products and materials from the production. This typically results in a lack of control, eleventh hour changes and long lead times.
- ERODING MARGINS – Prior to the pandemic, a 40-foot container cost Global Precision around £4,500 to ship from China to the UK. That cost has risen four-fold to £18,000 currently.
- LOST AT SEA – It takes between six and eight weeks to ship a container from Asia to the UK. A business selling a high-turnover product could have considerable sums of money tied up in stock at sea. Manufacturing closer to home, however, has the potential to offer next day or even same-day delivery.
Global Precision is well placed to comment on the growth in reshoring. The business supports OEMs, SMEs and start-ups from design for manufacture through to production; and initially, the majority of its manufacturing was done in China.
The business chose to manufacture in China primarily because of increased agility. China’s abundance of production capacity, labour and production processes enabled projects to be turned around at the drop of a hat. “If a customer wanted it, we could quickly find a supply chain to supply it,” Darren noted.
In response to its customers placing increasing value on ‘Made in the UK’, Global has been steadily bringing manufacturing to the UK over the past several years. This shift culminated in the 2020 opening of its ultra-modern factory in Haworth, West Yorkshire.
The new facility is almost three-times the size of Global’s original UK facility and has a floor dedicated to assembly, moulding and a large showroom. Production has been boosted by the addition of several new high efficiency electric hybrid injection moulding machines, with space available to accommodate future growth.
Darren closed by cautioning that reshoring manufacturing isn’t always as straightforward as it appears.
“We’ve found it’s easier to manufacture a brand-new product in the UK rather than transferring something already being produced in China,” he commented. “This is due to the differences in tooling, standards and equipment. You can’t simply ‘lift and shift’ production as some people believe.”
NOT JUST SURVIVING, BUT THRIVING
Central Scanning has managed to achieve growth during not one, but two economic downturns. The 2008 financial crash hit while the business was still in its infancy, but the management team managed to navigate the ship successfully through storm.
It did so thanks to its varied customer base. “We didn’t have many clients at the time, but the ones we did have all operated in different industries. As one industry dipped, another would rise,” explained Managing Director, Nick Godfrey.
Since then, Central Scanning has grown to become a market-leading provider of 3D scanning, 3D printing, reverse engineering and inspection services. From tooth-sized objects through to complete cars, replica models to architectural work, the Worcestershire based business has continued to operate in a diverse range of sectors.
Fast forward to March 2020 and the first lockdown. Incredibly, Central Scanning secured a significant amount of new work during that period, largely from competitors who had either temporality or permanently closed up shop.
“Keeping our doors open proved to be key, it really saved us,” Nick reflected. “We also kept in regular contact with clients to check how they were coping and make sure they were okay. We’ve received quite a few positive comments from clients saying how much they appreciated that.”
Another well-received initative was issuing additional ‘work from home’ licenses to customers. These were used by furloughed workers to train and upskill themselves so that they were in a stronger position when they returned to work.
“We also provided free demo licenses for potential customers to use the software and learn how to use it while furloughed. When they returned to work or their business reopened, a number of them decided to invest in that software.
“At the time, it felt like we were just giving everything away for free. But the decisions we made generated a number of sales we otherwise would have missed out on,” Nick commented.
Another decision that proved pivotal was the decision to invest in a high-spec webcam for filming product demonstrations. “We’ve sold equipment worth tens of thousands of pounds to clients who’ve just seen a live demo. That was something we’d never considered before and we are continuing to perform them,” he added.
A bold move Nick and the team made was to invest in 10 scanners at a time, rather than pre-ordering individual units, at a time when many competitors had ceased ordering completely.
“Each scanner retailed for £20,000 to £25,000, so buying 10 units at once was a big investment. But it meant we could fulfill orders much quicker than the two or three-month lead times other companies were offering, and we had already pre-sold several units.
“It was a big decision. We weren't sure what was around the corner, but we went for it and it paid off,” Nick concluded.
Nick Godfrey’s five tips for growth:
- Look to expand into new sectors and industries, don’t put your eggs all in one basket
- Keep abreast of and, if possible, learn how to use new software and technologies
- Continuously look to grow your network through a variety of means, you never know what opportunities that may lead to
- Don’t get too caught up on what competitors are doing
- Don’t underestimate the value and power of effective digital marketing
GIVING SOMETHING BACK
Collaboration, communication, and engagement are part of the DNA at Professional Polishing Services (PPS)
The Smethwick based business is an industry leader in mechanical surface polishing for stainless steel and a range of non-ferrous metals such as aluminium, brass, copper and bronze.
Manufacturing businesses almost always have close ties to their communities, something which provides a unique ability to support and improve the surrounding environment.
“Whether local, regional or national, something big or something small, we must do all we can to benefit those around us,” urged the Managing Director of PPS, Kirsty Davies-Chinnock.
Kirsty certainly practices what she preaches. As well as her day job, Kirsty is the Director and Chair of the British Stainless Steel Association; a Non-Exec Director of the TAG Network West Midlands (which supports young professionals, entrepreneurs and leaders); a trustee of a sports charity; a governor of a local school; an Ambassador for Acorns Children’s Hospice, and a Director for an organisation that helps ‘alleviate poverty through enterprise’.
Incredibly, Kirsty has also found the time to take part in the Fire and Ice walk for Acorns Children's Hospice Trust on 11 March 2022 – and you can help support her via the Just Giving page.
“We all do things for charity and to engage with our local communities, but we tend to suffer from a bit of ‘Britishness’ and not tell anybody about it. Think about how you can collaborate with your suppliers and your customers. Is there anything that you're doing that maybe they don't know about? Can we all be more engaged?” Kirsty asked.
Meet, chat and share best practice
Stories like these are exactly why the Virtual Breakfast Mornings are so invaluable.
60 minutes out of your morning to hear inspiring and thought-provoking conversations, build relationships with like-minded fellow manufacturers, and gain a clearer picture of what’s happening beyond your factory gates.
I look forward to seeing you at the next one:
*Header image: pixabay.com