The world of manufacturing is changing.
We have become accustomed to seeing UK manufacturing replaced by imports from fast growing, lower-cost economies such as China, and it is therefore easy to forget that the UK has always retained a significant manufacturing sector, often in high-end industries such as aerospace technology.
But recent years have seen a changing pattern, with a wider growth of UK based manufacturing. There are several reasons for this.
- The falling value of the pound has made imports expensive and UK exports more competitive.
- There is also a growing concern about supply chain vulnerability. Take the effect of the recent earthquake and tsunami in Japan. Many manufacturers worldwide have suffered, and need logistics solutions, as they were dependent on a single source, overseas and far away, for critical components.
- Modern manufacturing technology that uses high levels of automation helps offset negative wage differentials and demands a well-educated workforce. Sometimes this means that a product normally seen as unsophisticated in manufacturing terms can be successfully made in Britain.
An example of this is Hotter Shoes – a shoe manufacturer in the UK based on state of the art technology. Here we also see an example of how the trends in manufacturing and retailing merge, with Hotter Shoes supplying not only stores but integrating their manufacturing with a growing e-fulfilment operation.
Modern manufacturing in a high labour cost market requires some new thinking. The drivers are low stocks and fast response driven by the pull of customer demands, rather than the push of volume production seen in the past. Innovative products and manufacturing techniques require equally innovative logistics solutions to manage suppliers, ensure good product flow on the shop floor, and deliver on time and in full to customers. The Logistics Business has led the way on delivering these solutions, and in doing so it will help UK manufacturers to forge ahead.
Manufacturing should be seen not as an endpoint of a supply chain, but as one integral part of the whole network that needs to be both agile and resilient to remain at all times competitive. This holistic view is the basis for The Logistics Business’ approach.