The High Value Manufacturing Catapult, which supports the growth and success of high value manufacturing in the UK, has shown that a complex mix of positive factors is keeping manufacturing in the UK, and needs to be assessed alongside so-called ‘reshoring’- the physical return of production from abroad
The High Value Manufacturing Catapult, which supports the growth and success of high value manufacturing in the UK, has shown that a complex mix of positive factors is keeping manufacturing in the UK, and needs to be assessed alongside so-called ‘reshoring’ – the physical return of production from abroad.
Experts from the High Value Manufacturing (HVM) Catapult have identified that the recent bull-run in manufacturing in Britain is partly due to the decision by big companies to stay in Britain rather than move overseas, bucking the trend of previous decades.
The effect of retaining production here is arguably more important than the evidence for reshoring, where production returns to the UK from abroad.
Aeroengine maker Rolls-Royce has acknowledged that it chose to develop two production facilities in the UK rather than overseas, after developing ground-breaking technology improvements in collaboration with the High Value Manufacturing Catapult.
The company’s newest factory that opened in Rotherham in February is the most advanced turbine blade casting facility in the world. It uses an innovative casting technology where blades are grown in a special process that ensures they are created from a single metal crystal to maximise their strength, and cooling is facilitated by a series of precisely placed holes in the blade. The production process wasdeveloped in partnership with the Manufacturing Technology Centre in Ansty, near Coventry.
Rolls-Royce’s new fan disc facility in Washington, Tyne & Wear, was built following breakthrough research provided by the Advanced Manufacturing Research Centre with Boeing, which reduced the time it takes to manufacture a disc by 50% while producing a step-change in component performance. The AMRC helped to reduce the machining time of a Trent fan disc from 26-hours to under two hours.
French luxury group Chanel has invested heavily in its factory in Hawick, Scotland despite the higher labour costs than in other global facilities, due to the specific knowledge of knitwear design and weaving techniques that the site had built up over decades of wool-weaving. It is now Chanel’s global knitwear production centre.
Polyphotonix, a company formed in 2012 that develops organic Light Emitting Diode treatment for people with diabetic retinopathy, expected to manufacture its special masks overseas due to the costs of development. But CEO Richard Kirk decided to stay and manufacture in Britain because of the combination of research facilities provided by the Centre for Process Innovation in Wilton, and research grants from the Technology Strategy Board and NHS.
“Companies are reshoring to Britain but also, several important factors are keeping them from off-shoring,” says Professor Janet Godsell,Professor of Operations and Supply Chain Strategy at Warwick Manufacturing Group, part of the HVM Catapult’s seven centres.
“One global consumer packaged goods company chose to consolidate its single global supply chain hub in the UK, despite other options, because of the depth of supply chain planning skills its Southampton operation had developed. Britain needs to better understand its place in the global value networks of global companies to exploit the full breadth of its supply chain capability more strategically,” she adds.
The HVM Catapult Centres have all delivered several step-change projects for their tier one partners that reduce manufacturing operational time and slashed costs.
GKN Aerospace has acknowledged that support including the research and development work of the National Composites Centre and the AMRC has allowed it to make important investment decisions in Britain to develop fast, partially automated methods for the manufacture of winglet structures. The company is leading a project under the Structures Technology Maturity (STeM) programme with the goal of creating consistently high-quality wing structures 30% faster than is possible today.
The evidence of companies deciding to retain and invest in production in Britain and not chase potentially cheaper manufacture abroad has fed into a national survey conducted by Cranfield University to establish the drivers for reshoring in the UK.
The survey’s results will be announced in a white paper at the National Manufacturing Debate being hosted at Cranfield on May 20, where HVM Catapult CEO Dick Elsy will give a presentation on the innovation drivers for reshoring.
“Reshoring is an important phenomenon that is boosting UK manufacturing, and I welcome Cranfield’s survey to analyse the root causes.” says Mr Elsy. “Keeping manufacturing in the UK in the first place, however, is even more significant for the growth and success of our economy. Many global companies are not only deciding to keep production here but deliberately want to increase the British component of their end products – such as Jaguar Land Rover in the Midlands for example. Smaller companies need to know how to competitively produce their goods in this country, and how to exploit this recent tendency to develop local suppliers.”
For some companies, reshoring is not driven by technological reasons or proximity to market but more prosaic factors, such as cost and price.
Brinsea, a manufacturer of egg incubation machines, brought production back to subcontractors in South Wales from China in 2012 due to several hidden costs that took time to manifest. “One reason is risk; if our supplier went out of business, how would I practically repatriate my asset from the administrator, negotiating Chinese law?” says managing director Ian Pearce, who will present at the national debate on May 20.
Mr Pearce adds that for his business activity, plastic injection moulding, the quality from his main Chinese supplier was very high and not a driver of reshoring.
Cranfield’s reshoring white paper is based on an industry survey, analysis of hundreds of newspaper and magazine articles and interviews with companies that have brought production back to Britain. It identifies the top five reasons why companies reshore. “The white paper will publish the main reasons why companies reshore to Britain and also describes the national capabilities we need to develop to sustain production here once it has returned,” says Professor Raj Roy, Director of Manufacturing at Cranfield University and organiser of the national debate.
CBI director-general John Cridland will open the conference with a speech about the importance of reshoring to the UK economy. Harry Moser, president of the Reshoring Initiative in the US, and Felipe Rubio Castillo from CONACYT R&D in Mexico, will discuss how these countries have attracted foreign investment in production.
Watch the High Value Manufacturing Catapult website for more examples of reshoring and retaining manufacturing in Britain, and the reasons behind these decisions.