Many UK companies that currently import components into the UK believe that they should be looking at a reshoring programme, and the reasons are numerous.
First and foremost, the COVID crisis has highlighted just how good our plastics sector is. Their response has been truly inspirational! It has also highlighted just how vulnerable our supply chains can be.
Secondly, importing plastic (or any) components has become a major headache in terms of red tape, costs and timescales. This has had several knock-on effects:
- Reduced margins due to escalating external and internal costs
- Increased stockholding will be needed to avoid line stoppages
- Unforeseen quality issues or changes in demand will be harder to manage and resolve
There is also a growing concern about our carbon footprint. Reducing transport miles and the air miles needed to visit overseas suppliers is becoming a big priority.
If the right incentives are in place, what exactly is stopping some companies from moving forward?
UK plastic processors can easily demonstrate equal or superior technical competence to their overseas counterparts. The challenge is conveying to potential customers the many tangible benefits that reshoring can bring, despite the transition period’s initial pain.
Below we have identified the most common pain points UK companies use to justify leaving things well alone. We then counter these arguments using knowledge gained from real-life scenarios and also provide some useful pointers.
Reason one – Item cost price
“Labour costs are significantly lower in some parts of the world, so UK companies won’t be competitive!”
In reality, unless there is a great deal of labour-intensive assembly work involved, then by factoring in the actual, real-life costs of importing goods over great distances, it is easy to counter this argument:
- UK processors are leaner than ever, using the most energy-efficient production equipment and automating part handling, wherever practical to do so.
- Transportation costs and the associated environmental impact are significantly reduced. You are also less susceptible to uncontrollable events such as pandemics, political uprisings, or severe weather at sea!
- There is no requirement to ship full loads to minimise transportation costs, which leads to much lower stocking levels and reduced exposure to quality issues.
- There is an option to use RTP rather than cardboard packaging, reducing long-term costs and your carbon footprint even further.
- There are no concerns over import tariffs or a poor or fluctuating exchange rate. You also avoid the red tape associated with post-Brexit legislation, and as we know, time is money!
If there is assembly work required, it may be possible for a highly-skilled UK supplier to ‘design out’ the labour requirement. For example, twin-shot moulding can combine two grades or colours of plastic within a single moulding cycle.
Reason two – Ownership of production tooling
“We don’t own the production tooling or have product drawings.”
Ownership is a common issue. The ‘helpful’ overseas supplier offered to assist with the design of your product, then absorbed the production tooling cost. At the time, this seemed like a perfect solution and a lot less stressful. In reality, you now feel irreversibly tied to your current supplier, as you don’t even have the part drawings to allow the production of new tooling.
Technology can come to the rescue with this one! Using either CNC measuring or 3D scanning equipment, a current sample can be digitised and used to manufacture a new production tool. OK, so there is a cost to having new tooling manufactured, but there are ways to recover this cost:
- A good UK toolmaker (even when managing overseas tooling production) can produce a tool that will deliver superior components at a higher production rate. This lowers labour costs (no re-working needed), reduces scrap production, and lowers piece price while increasing the product’s appeal.
- Product design changes and upgrades can be incorporated, helping to refresh your product range. Going forward, it will be much easier to make modifications without having to worry about planning for long term disruptions to your supply chain.
- The tool’s size can be optimised, allowing for a smaller production machine with a lower hourly rate.
- Your new tooling can be put into full production when you are ready to make the switch. There is no need to worry about having to build up a buffer of stock using your probably disgruntled overseas supplier.
Reason three – Lack of knowledge of the UK supply chain
“We don’t have any contacts in the UK.”
This one might be hard to own up to, but the reality is that many buyers have grown up with the idea of sourcing plastic components from lower-cost economies. They will have very few established communication lines with potential UK suppliers, so it will be challenging to get suitable quotes.
Visiting exhibitions that focus on sub-contractors looking for new customers is one solution to this dilemma. The only negative is that relatively few such exhibitions now take place, and exhibitors come from very varied backgrounds; usually, only a handful specialise in plastics.
Directories are a good starting point, but there can almost be too much choice! You will also need to match your requirements with the particular capabilities of the suppliers listed, which can involve a lot of trial and error.
You are, however, reading this blog on the PlastikCity site. PlastikCity is a procurement site explicitly designed to meet the needs of the UK’s plastics sector and companies looking to get stuff made in plastic. Within the primary Source a Moulder section, companies are listed by speciality, and their profiles provide details of their capabilities. More importantly, these companies have been pre-vetted to make sure they are financially secure, operate to the relevant quality standards and have the interest and skillsets to work with you. Our categories are limited to a number of selected, high-quality companies. Our team can also help you narrow down your choice before using the automated system to submit enquiries to your shortlist.
If you are involved with any plastic products’ procurement, you should visit the PlastikCity Source a Moulder section. Here you will find over 60 of the best UK plastic processing companies, profiled by their capabilities and specialities. As well as injection moulding, there are extrusion, blow moulding, rotational moulding, PU moulding, 3D printing, medical/cleanroom moulding, insert moulding, LSR moulding, twin-shot moulding, gas injection moulding, PVC moulding, machining and fabrication, rubber and compression moulding companies represented.
All these companies have invested heavily in machinery, automation and people over the last two years.
You may be surprised how competitive these companies can be, especially when the cost of logistics, cash flow, stock control, response times and resolution of quality issues are considered. When you also factor in the carbon footprint and the feel-good factor associated with ‘Made in Britain’ on the label, you may be very pleasantly surprised.