Manufacturing in the Far East has become an automatic decision for UK companies but it seems that some are now starting to challenge that as they seek ways to respond more rapidly to changes in market demand.
In recent months, EV has seen an increase in companies looking to re-establish more local manufacturing facilities. Rising freight and labour costs are making Asia less attractive as a manufacturing location, however the critical factor, for the firms we have spoken to, is the long lead time involved in bringing stock and vital components from the Far East.
Current tough market conditions mean that businesses must be able to act quickly, to grasp any opportunities that arise – often to beat the competition to exploit a niche, which will not sustain a six-week delay.
Jaguar Land Rover, BMW, Toyota and Nissan are large-scale international businesses which have committed to new plans for manufacturing in the UK during 2011. In 2012 we believe smaller firms will follow suit, to improve speed of reaction and quality, and to maintain control over valuable intellectual property rights.
Local manufacture allows firms to be far more flexible and responsive to customer demand - which can be vital when the market is so unpredictable. They don’t have to take the risk of carrying too much stock and they can also respond more quickly to rapidly changing circumstances. Many of these businesses are in industries where trends and fashions play an increasing role and, in these economic conditions, they must be able to react and operate in an environment of continual change.
By Doug Stellman