The big question for many manufacturers and inventors is whether to make your new product home or abroad. The UK offers shorter lead times, smaller stockholding requirements and greater control, while China offers obvious benefits around lower tooling costs and unit prices.
In the short term you’ll need to choose between countries to get your project going, but in the long term the answer is to establish relationships with factories in both countries.
Our most experienced customers maintain a global sourcing strategy, where they move production back to the UK when conditions allow (e.g. a weak pound, and capacity in UK manufacturing sector), and back to the Far East when conditions in this country become unfavourable (such as when factories start offering lengthy lead times, or prices jump 25% overnight)
We are currently seeing a trend back to China which is being driven by many UK manufacturers have full order books due to their export led growth. In the last fortnight we’ve had a number of new customers contact us to complain how manufacturing in the UK has suddenly become a challenge for their business. Last year however the opposite was true with many customers looking to source locally due to the collapse of the pound.
The picture is also blurred further as over 70% of our customers are manufacturers themselves – looking to bring down the cost of components to make themselves more attractive abroad. These factories rely on Chinese prices for tooling and resource intensive parts to bring down their own production costs.
In summary we don’t condone customers moving their production to China at the expense of UK industry. We believe customers should develop a balanced approach to sourcing, with different manufacturing options to support different economic conditions. If a customer moves their production to the China we expect at some stage they will move their production back to UK, and at some stage it will also come back to China.
