By Daniel Hunter
New research from a leading supplier of tamper evident solutions in the UK suggests that the desire for Chinese manufacturing is on the wane amongst British companies.
With the negatives facing production beginning to outweigh the positives, two thirds (67%) of those polled stated that they would consider a return to the UK or Europe 'if market forces were right'. 38% of these admitted to 'being in discussion' to look at the possibilities of bringing production back to Europe.
In a bid to discover more about British based business opinion surrounding manufacturing solutions, one of the UK's leading suppliers of tamper evident packaging has conducted a study to establish industry thoughts about the reliability of overseas production, with a particular emphasis on the difficulties faced in the Chinese market when compared with British manufacturing.
The study, carried out by www.versapak.co.uk, polled 1,124 business managers from companies with headquarters in the UK, who had a vested interest in manufactured goods, after receiving a noted increase in enquiries about European based manufacturing.
Respondents were initially asked 'Has your company ever looked to China for manufacturing solutions?' to which 46% of respondents said that 'yes' they had at some stage.
The extent of this was then looked at, as respondents were asked whether the full manufacturing process for their business was undertaken abroad or whether they looked to China for individual parts manufacture, as they were posed the question; 'Was this Chinese based manufacturing for individual parts or did you look to China for the entire production process?' which revealed an almost equal split, as 52% claimed to opt for individual components, but the remaining 48% stated that the entire production process 'occurred in China'.
The study looked at some of the problems encountered by UK companies working with manufacturers in the far east, asking 'What are the main stumbling blocks when operating within the Chinese manufacturing market?' which revealed the following top five problems as cited by business leaders. They were allowed to select more than one option if they felt that more than one problem applied.
1. Difficult communication - 53%
2. Rising prices - 48%
3. Long lead times - 40%
4. Poor quality of production - 35%
5. Large minimum order quantities - 32%
With the above list in mind, respondents were asked 'Would you consider a return to the UK or Europe for manufacturing if market forces were right?' to which the majority, 67%, said 'yes'. The remaining 33% claimed to be 'happy with their current setup'. Of those that said 'yes' to potentially manufacturing in the UK or Europe, 38% stated that they were 'already in discussion' to do so.
"China has long been associated with large scale manufacturing on behalf of British based companies. The relatively cheap costs of production has been a huge draw when compared with looking at the same scale in a UK or European setting. With the fundamentals of business being aimed towards 'low costs, high returns' it's a logical line of thinking," Leon Edwards, Group Managing Director of Versapak, said.
"But it seems that the winds of change are now blowing more favourably towards UK shores and that the thought process towards UK based manufacturing could be shifting. From a personal point of view, I've had many discussions with business prospects about the challenges of Chinese production, the majority of which are evidenced in the results of our study.
"Often these problems are symptoms of agents acting as companies or companies diversifying and not being specialists in particular areas. Plus, nowadays many factories are so under capacity that they overcharge or use lower quality materials or staff, which further adds to the problems encountered by UK companies. It's no surprise that many are looking closer to home for manufacturing solutions."
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