UK firms are coming back from China, but they need more help – Telegraph.co.uk

“The upside is control over quality. We are able to drive down the road and
see our manufacturing partners.”

There have been other benefits to moving back to Britain. Production lead
times have been reduced from 12 weeks to 10 days and payment terms are
significantly better – in China, Knight had to pay upfront, whereas in the
UK he gets credit terms of 30 or 60 days.

“It was the best thing we could have possibly done,” he said. “We are an
eco-friendly company making eco-friendly products and shipping goods halfway
round the world was just not the right thing to do. We are really proud of
being able to say we are made in the UK.”

The business now has a turnover of £1.1m and Ecoegg products are sold in Argos
and Tesco.

Knight is not alone in bringing his manufacturing process home. A growing
number of SMEs are choosing to do the same, in a move known as “reshoring”,
as the costs of manufacturing in China and the Far East rise and the
benefits of being close to the factory become more appealing.

Symington
recently announced it was relocating the manufacture of Pot Noodles from
China to Leeds, while Trunki, which makes ride-on suitcases for
children, has moved production from the Far East to Plymouth. Topshop, River
Island and Aston Martin have also moved some production back to the UK.

According to the Engineering Employers Federation, around 15pc of British
firms are bringing some or all of their manufacturing home.

The good news for SMEs looking to reshore – whether by setting up their own
operation or by outsourcing to existing manufacturers – is there is still
much manufacturing expertise in the UK.

While large-scale “metal bashing” manufacturing may have largely disappeared,
specialist high-value manufacturing is on the rise, with regional clusters
of expertise emerging.

Dr Mark Swift, head of small business programmes at Warwick Manufacturing
Group at Warwick University, said: “There are more than 600 advanced
manufacturing companies in the Warwickshire area alone and the capability is
staggering, from high-precision engineering to products measuring energy
usage in buildings.”

Most of those firms, he said, manufacture for other businesses, a pattern
echoed elsewhere, making it theoretically straightforward for small firms
which outsource manufacturing overseas to make the switch.

The big challenge facing SMEs keen to come back to the UK is how to find and
access the resources they need in a painless way.

Although the Government provides some financial support through its Regional
Growth Fund and the Advanced Manufacturing Supply Chain Initiative, it is
clear that a more co-ordinated knowledge-based approach is needed. SMEs need
to be matched with existing manufacturing firms in the UK which can make
what they need.

Neil Sevitt, head of SMEs at RSM Tenon, an accountancy firm, said: “There are
quite a lot of hoops to jump through and maybe the Government needs to think
about making it easier.”

Rachel Bridge is an author specialising in entrepreneurship and SMEs