06 June 2008 | Jake Kanter
Buyers who source from China could begin moving their supply base back to the UK, according to an expert.
Bradley Feuling, chief executive of supply chain consultancy firm Kong and Allan, said some companies are moving their manufactured goods supplies back to the UK. He argued organisations could benefit from shorter supply times and mitigate additional costs such as shipping and production fees, particularly on smaller orders.
It follows research carried out by the Financial Times (FT) that found a number of UK manufacturers are choosing UK suppliers over Chinese counterparts. It said purchasers found the cost of sourcing in the country was higher than expected and there were still issues over poor quality.
"There are indirect costs that must be included into the total cost model, yet many managers neglect these considerations," Feuling told supplymanagement.com. "There will certainly be companies moving back to the UK, but I don't see it on a major scale."
John Dean, industrials analyst at investment bank Jefferies, told the FT: "Ten years ago the difference in cost was absolutely enormous, and that gap has shrunk. The cost of manufacturing in China is rising, and quite quickly."