UK manufacturers bring work back home to mitigate risk

14 August 2012

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14 August 2012 | Kamalpreet Badasha

Two-fifths of UK companies have brought production back in house in response to increased supply chain disruption caused by the recession and global natural disasters.

According to a survey from manufacturing body EEF, 82 per cent of respondents have experienced recession-related supply chain disruption. Be Prepared - Monitoring supply chains; Maximising resilience also found international natural disasters indirectly affected 42 per cent of respondents, with 11 per cent reporting a direct impact.

A quarter of the 150 companies surveyed said they have increased their use of local suppliers. “In recent years manufacturers have been hit by a host of unforeseen events, which has seriously tested their supply chain monitoring and business continuity planning,” said Lee Hopley, chief economist at EEF.

“This can also create opportunities to re-shore production and rebuild key manufacturing with companies bringing some production in-house and using local supply chains. We need to capitalise on this opportunity by removing obstacles for manufacturers looking to expand capacity or diversify into new areas and by creating a business environment that pulls in every pound of vital investment to our economy.”

The survey found companies are taking action to improve supply chain performance. The most popular strategy is changing inventory management, which more than 64 per cent of respondents have undergone. This was followed by a 60 per cent increase in forward planning with suppliers and increased collaboration with suppliers by 57 per cent.

Improving supply chain performance led to 76 per cent of those polled reporting a more positive and collaborative relationship with suppliers. Some 71 per cent said there was improved inventory management and 70 per cent found there was greater supply chain visibility.

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