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16 August 2012 | Kamalpreet Badasha
Almost two-thirds of British manufacturers - 61 per cent - source commodities and components from the UK, rather than abroad (39 per cent).
The UK manufacturing: Supply chain insight study by Barclays found 53 per cent of the 200 manufacturers produced goods that are sold to a UK end user or used as components in UK production. Manufacturers are keen to keep their business within the UK as is illustrated by the 36 per cent who said sourcing from the UK was a rule.
“We note a marked propensity of UK manufacturers to choose suppliers close to home. The results present evidence that the high cost of logistics, reflecting escalating fuel prices, are most likely to play a part in the decisions,” said Mark Lee, head of manufacturing, transport and logistics at Barclays. Some 76 per cent of respondents said the cost of logistics and transport is affecting the choice of where suppliers are located.
It also found 68 per cent of businesses had not considered outsourcing supply chain operations. Of the 32 per cent that had, the most popular area was logistics, selected by 44 per cent. Distribution was the second highest with 39 per cent.
Quality was the key driver for supplier selection, the primary reason for 40 per cent, followed by price that was selected by 30 per cent. “Self-confidence and traditional values of quality appear to be key drivers behind UK manufacturers’ supply chain strategies,” said Lee.
When it comes to supply chain risk, the failure of suppliers to deliver what was required in terms of quality, cost or timeliness was the biggest concern for 82 per cent.