Reshoring – just in case?

Bhavina Bharkhada - Make UK
Bhavina Bharkhada - Make UK

Bhavina Bharkhada, head of policy & campaigns at Make UK asks whether the supply chain disruption created by the upheavals of Covid and Brexit could lead to an abandoning of offshoring and more production brought back to the UK.


Go back fifteen or twenty years ago and such was the extent of offshoring taking place by UK manufacturers some feared it would be a case of last one out turn out the lights.

The intense pressure to drive down costs in response to pressure from the big OEMs and take advantage of cheap labour in the Far East, and China in particular, led to a substantial hollowing out of the UK supply chain and the establishment of ‘just in time’ production processes. Such was the integration of global supply chains, supported by a highly complex logistics system, that it became common place for companies, even in the aerospace sector with longer lead-times than others to offshore some aspects of their production overseas.

However, fast forward to today and the disruption caused by Brexit and the pandemic and the issue of whether to re-shore is now very much on the agenda for aerospace companies. Supply chain disruption and supply chain resilience has now become an increasing part of the narrative for manufacturers whose networks were exposed during the early part of the pandemic as a lack of freight capacity and differing lockdown policies between countries resulted in substantial challenges for manufacturers needing to access critical components. So instead of ‘just in time’ in the future are we likely to hear more of ‘just in case’ leading to an abandoning of offshoring and more production brought back to the UK?

What has become clear is that an increasing number of manufacturers are monitoring their supply chain. According to Make UK’s latest data this has doubled from 7% of companies in 2009 to 13% in 2020 while the number not actively monitoring their supply chain has halved since 2009. This level of active consideration of supply chains and where production takes place is leading many companies to question offshoring, with a quarter of companies looking to re-shore overseas activities while a further quarter are looking to identify new or additional suppliers in the UK as a high priority.

Furthermore the data shows that companies are looking to diversify their supply chain as being able to draw on multiple suppliers in different locations helps to reduce disruptions by spreading the risk. It can also increase agility as there are more supplier options to draw from. Our latest data bears this out with 15% of companies now using multiple suppliers and a further 15% reporting an increased use of local suppliers.

Increased collaboration up and down the supply chain is the most common strategy manufacturers are using to improve supply chain performance. This is a longstanding characteristic of the aerospace sector where the major OEMs have long held very close relationships with their supply chain which has tended to be European rather than UK based. However, given the economic shock of the last couple of years and the changed political scenario of the UK’s relationship with Europe in particular, it would be highly unusual if companies with highly complex and integrated supply chains, as well as production facilities overseas, were not considering bringing back some, or all, of their production back from overseas.

However, measured against this is the prospect that companies will continue to offshore production because the UK’s departure from the EU has meant that to get round onerous and sometimes legally required Rules of Origin requirements they have been forced to move or, set up, some production overseas, especially in Europe.

Currently, there are a number of very complex factors at play as far as manufacturers are concerned. It would be impossible to say the concept of ‘offshoring’ is dead and not one that companies are still considering. Equally, however, such has been the shock to the system over the last couple of years it has undoubtedly led many companies to look at whether the need for ‘just in case’ has made them think again.


Make UK

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