Just-in-time global manufacturing supply chains have been replaced in British factories with “just-in-case” arrangements and more local suppliers after the pandemic and Brexit caused havoc in production schedules.
A survey of members by Make UK, the engineering employers’ federation, found that the supply chain dislocations of the past two years had ended decades of sourcing components offshore. About three quarters of manufacturers have increased their number of British suppliers, with half saying they would do so in future.
The survey also found that more than a third of manufacturers had increased the total number of suppliers over the past two years. A quarter of companies now have between 50 and 100, with one seventh saying they have more 200 on their books.
Just-in-time manufacturing ensures materials and parts arrive at exactly the right moment to align with assembly and production schedules. Offshoring has been the trend for western manufacturers to source supplies from lower-cost economies, typically China and southeast Asia and eastern Europe.
“Strategies manufacturers have long adopted of offshoring in response to globalisation, operating a just-in-time process with virtually guaranteed transport links and low-cost production, have been turned upside down with disruption and increased volatility fast becoming normal,” the report said.
“Economic shocks have led to companies significantly increasing the number of suppliers so they have more options in the event of disruption, with these suppliers increasingly sourced back in the UK or western Europe.” Make UK said the war in Ukraine and Covid lockdowns in China were likely to give further impetus to the trend.
Of the 132 manufacturers surveyed by Make UK, 93 per cent blamed the pandemic for supply chain disruption, while 87 per cent blamed their problems on changes wrought by Brexit. For between a third and half of manufacturers, that disruption has been “major” or “catastrophic”, they said.
Verity Davidge, director of policy at Make UK, said: “For decades manufacturers have used increased globalisation and supply chains to drive efficiency and create lean manufacturing processes that have helped them to grow and remain competitive. We may now be seeing the era of globalisation passing its peak, with disruption and volatility for global trade fast becoming normal. For many companies this will mean leaving just-in-time behind and embracing just-in-case.”