China in your hand (or on your doorstep?)
It appears that I must face facts…
33 years in manufacturing within the UK, Yes, manufacturing! A discipline that I was assured to be disappearing from UK shores faster than your local milkman or first class post.
But here I am still!
Yes, I waved the red flag of China for more than a decade believing this to be the necessary future of our once proud manufacturing industry.
Now, slightly greyer and somewhat heavier, I wonder if this was for a variety of reasons, a flash in the pan, or wok even!
Sure, if you’re buying 50,000,000 pairs of black socks then China is an option, there is little room for manoeuvre, but what if you are an average size company with possibly a volatile order book, project based or have demanding customers.
Considering currency (particularly as we hurtle towards Brexit) devaluation, large order quantities, long lead times, large local inventory requirements, not to mention customs expense and duties, does this fit the bill for you?
So how competitive is the Far East?
So what about buying British? Would that be a terrible option?
Are there good reasons for buying locally?
Can the UK compete on price?
The moving parts:-
1. Currency uncertainty
UK Companies will not adjust price as a result of the US dollar strengthening. Also if there ever was a time to support our own local businesses over Europe and the Far East, now is that time.
2. No accurate forecasts from your customers.
Simple solutions, you can carry excessive inventory, or better still, buy on much shorter lead time from a UK company
3. Minimum order quantity
50,000,000 black socks! Order from China.
30 Fabricated chassis in 3 weeks. Yes, order from the UK.
4. China is cheaper?
China has long found that it’s manufacturing costs have been increasing. It is expected that annual salary increases to be in excess of 7% in 2017. This is the third highest increase in the entire Asia Pacific region. The global average increase is predicted to be 1.5% in 2017. Is this aura of ‘low cost’ sustainable?
5. Quality Control If you experience a product quality issue. It’s not as easy to visit (or speak to) a factory in China, as one 10 minutes away. Include large deliveries and order sizes, how would you survive the supply issues caused by this?
6. Carbon Footprint
A no brainer really.
7. Intellectual Property Enforcing intellectual property rights in China continues to be challenging for even the most determined blue chip. Considerably less onerous in the UK.
Can we complete with our Far Eastern counterparts?
Short Answer – YES!
‘Total Acquisition Cost’ (TAC) shows that in many cases, not only can UK companies match the price of China (Although not in millions of pairs of socks) but also help save further costs through value engineering, line side deliveries, consigned inventory, easily accessible communication (in plain English) & good old fashioned partnership.
Brighton Sheet Metal products are manufactured entirely in the UK. We offer metal forming fabrication, precision cutting, powder coating, wiring and assembly of products across a range of industries.
If you’d like to benchmark your Far Eastern supply please call us on:-
+44 (0)1273 602 216
Alternatively you can email us:- firstname.lastname@example.org
Mark Williams- MD