26 Jul A new report highlights how the UK has an opportunity to become a global leader in electrification.
A new ‘In Charge’ survey of 200 senior executives from the European battery industry, has revealed 84% of UK companies are looking to bring parts of their supply chain closer to their manufacturing base over the next 12 months.*
77% of UK respondents are also looking to outsource component production to specialist manufacturers, whilst 86% are planning to launch a new battery product or storage system during the next 12 months. This comes off of the back of Nissan’s plan to build the UK’s first car battery Gigafactory.
The pandemic’s sudden closure of production centres in China and other Far-Eastern locations sowed chaos amongst western manufacturers and for many businesses in the UK. However, Brexit uncertainties had already turned thoughts toward moving their manufacturing plants back to UK shores and sourcing locally rather than from overseas suppliers.
In a recent survey by manufacturers’ organisation Make UK, 70% said Britain should aim to be a top-five manufacturing nation. At the same time, deepening awareness and concern over climate change may further influence people in favour of shortening supply chains.
Dawson Shanahan is in the business of designing, prototyping and engineering customer-specified components and assemblies for sectors ranging from automotive and motorsports to aviation, power distribution, electronics and medical. Always UK based, we have a strong belief in the innovation, productivity and skills of Britain’s manufacturers.
The quality of British-made goods is recognised globally and UK manufacturing has a strong base on which to build. One of the world’s top ten industrial nations, Britain should break into the top five by 2022 if current growth trends continue. Britain’s manufacturing sector, directly employing about 2.7 million workers, accounts for around 70% of the country’s business R&D and nearly half of its exports.
What are the advantages for manufacturers of reshoring?
There is less incentive for offshoring to countries like China, as the differences in labour costs are narrowing. Meanwhile, there are local and national Government tax incentives to encourage reshoring. Here at Dawson Shanahan we can summarise the positives of reshoring as follows:
Less supply chain risk. Local supply chains offer simpler logistics and greater agility, so gaps resulting from any sudden change can be quickly filled.
Shorter delivery times. Customer orders are fulfilled more quickly, while rapid transmission of prototypes and parts for testing reduces time to market for new products.
Lower minimum order quantities. With local suppliers, small orders become practical and less cash is tied up in stock.
Higher quality. Our main strength in the UK is often the prime motive for reshoring. Far-Eastern suppliers may be capable of delivering the required quality, but assessing their facilities, processes and products, and correcting any problems, is difficult at such a distance and in these Covid times.
Closer communication. As above, long distances are an obstacle to effective co-operation and problem resolution.
Reduced transport costs. The rising expense of shipping and importing is compounded by distance. Air freight, for small orders and prototypes, is especially costly.
Smaller carbon footprint. Fewer transport miles mean less fuel consumption and greater environmental sustainability.
Reshoring challenges and solutions for manufacturers
Set against these benefits and savings are the disruptions and costs involved in restructuring a business for reshoring. Make UK highlights the following challenges: disrupted production; extra load on managers; finding suitable local suppliers; potentially higher energy prices; and meeting planning regulations.
If reshored businesses are to be competitive on price, they need to increase efficiency and lower production costs by innovating and investing in new production systems and technology. This includes gearing up for the Fourth Industrial Revolution (4IR). Recruitment and training of staff is another essential. Manufacturers may have to pay more to attract the right people, but we would emphasise that Britain has a rich pool of talent on which to draw.
Working with customers to address these issues, eliminate supply chain risks and maximise reshoring advantages is a well-established element of our strategy. The company can be found, along with many other like-minded businesses, on the website www.reshoring.co.uk. This has been developed by Reshoring UK, a collaboration of leading industrial associations, to help manufacturers find trusted and accredited UK-based suppliers.
Manufacture of copper-based components provides a good example of increased activity in UK companies – including Dawson Shanahan – which can be related to reshoring. These items are needed for everything from power semiconductors, generation and distribution equipment, solenoids and electro-valves to electric vehicles and increasingly electrified aircraft.
In some instances, it is also now cheaper for UK and EU countries to buy more expensive components locally rather than from the Far East, due to the tariff free-trade deal which states 55% of a product must be sourced locally rather than from the rest of the world. Any more than that and you are subject to a 14% fee.
Digital transformation, based on constant capture of real-time data through the Internet of Things, will be vital to UK-based industry’s success and is central to Dawson Shanahan’s approach. To this, we can be added increasing automation and advances in robotics, machine learning and artificial intelligence.
At Dawson Shanahan, this has manifested in the use of advanced metal-forming simulation software to analyse and enhance tooling designs. This replaces the much slower traditional approach in which prototypes are created, tested and tailored by trial and error to their application. Importantly, as well as speeding up tool creation and reducing time to market for new products, it improves the quality of those products.
Collaboration is key to our ability as a tier 2 engineering business to help manufacturers achieve UK-based success. Our discussions often start long before the first part is produced. We gain a full understanding of their requirements, review designs and make suggestions to simplify production, reduce costs and improve long-term component reliability. After production starts, we continue working together to refine processes, maximise quality and seek further opportunities for improvement. Being geographically close and readily accessible makes this collaboration much easier and more effective.
*July 13th 2021