British manufacturing: an update on reshoring

November 28, 2018

Setting the scene

Kirsty Davies, director and general manager of Professional Polishing Services, first ‘went public’, in 2007, after the Birmingham Post reported a confrontation with the Birmingham Chamber of Commerce. A letter had been sent to local firms urging them – where appropriate – to consider offshoring. Five years later, Professor David Bailey (then at Coventry University Business School) reported in the Birmingham Post (which is not maintaining the link) that “repatriating activity – including some sourcing – to the UK is very much on the agenda”. He summarised the impact of offshoring on British manufacturing over the last decade, and considered the tentative signs of “onshoring” in certain sectors due to a combination of factors, including:

  • increased transport costs,
  • rising wages in key areas of China,
  • and a greater awareness of supply chain resilience, in the wake of disruption due to the Japanese earthquake and tsunami.

‘Home-sourcing’ and closer value chains in mature economies: the case of Spanish manufacturing*, by David Bailey, Carlo Corradini and Lisa De Propris, was published in August this year.

Most recently, governments in Europe and the USA have started to question the implications of production location choices by multinational enterprises for domestic economies and to express their intention to rebuild manufacturing capabilities in the domestic economy.

This has led to a debate on changes in the global organisation of production with an emphasis on a current global shift-back trend that has been captured in the more visible debate on ‘reshoring’ or ‘backshoring’ and, more broadly, a switch from foreign to home-sourcing in supply chain management.

Reshoring trends in Germany

Kinkel and Maloca (2009) looked at reshoring trends in Germany and found that one in six companies that had offshored between 2004 and 2006 chose to reshore and in a 2012 paper found that during the period 2007–09, for every three firms offshoring, one reshored (Kinkel, 2012).

One in six UK manufacturing firms are actively engaged in reshoring

In the UK context, Bailey and De Propris (2014) argue that while evidence points to reshoring being a discernible trend, practical constraints such as access to skills and finance, energy costs and land availability appear to limit it, hence the relatively modest scale of reshoring activity that they find.

Their paper focusses on the nature and characteristics of the businesses switching from foreign to domestic suppliers. They found that R&D-intensive businesses with core non-standardized products may be more likely to change the composition of their supply chain by ‘switching’ or ‘replacing’ foreign outsourcing for home-sourcing,

Their findings will lead to a broader understanding of what manufacturing activities might realistically and sustainably be built and anchored in mature economies that are high cost but technologically advanced, such as those in Europe.

Bailey and De Propris suggest the advantages must be understood in terms of the skilled jobs created and the multiplier effect derived from recoupling manufacturing with the value creation content of the functions that are home-sourced.

* Cambridge Journal of Economics, Volume 42, Issue 6, 9 November 2018, Pages 1567–1584, https://doi.org/10.1093/cje/bey020

 

 

 

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Manufacturing: Catapult Centres in the West Midlands receive funding

November 11, 2018

The Chancellor of the Exchequer recently announced that Warwick Manufacturing Group (University of Warwick) has been awarded £100m in Government funding for WMG’s work in the High Value Manufacturing Catapult.

It forms part of a £780 million announcement of which £270.9 million has been awarded to the West Midlands (to WMG and The Manufacturing Technology Centre, below) for their work in the High Value Manufacturing Catapult, and the Energy Systems Catapult in Birmingham.


The WMG centre’s HVM Catapult focuses on Low Emission Mobility, Connected and Autonomous Vehicles (CAV) and the supply chain. This is directly aligned to the Government’s ‘Road to Zero’ vision for the transport sector of zero emissions, zero accidents and zero congestion, underpinned by WMG’s digital manufacturing capability that drives improvement in productivity and competitiveness across sectors.

The Warwick press release reports that in their first five years the catapults have supported around 3,000 small businesses to develop and exploit new technologies. They operate more than £850m world-class facilities and are also training hundreds of apprentices and doctoral students. Last year 900 apprentices gained valuable practical experience with cutting-edge technologies used in modern manufacturing at HVM Catapult.

A more cautious account was given last November in The Register, by Andrew Orlowski. Citing a report by Ernst and Young’s Catapult Review Steering Group to the Department for Business, Energy and Industrial Strategy, he summarised some of its conclusions.


The catapult agencies (aka the government’s elite network of Catapult Centres), which are formally private sector “independent research and technology organisations”, hoover up public money via Innovate UK.

The UK government’s network of “Catapult” innovation and technology agencies fall under its R&D spending umbrella – show dubious value for money. Governance structures are unhelpful the report finds. Innovate UK – the operating name of the government’s Technology Strategy Board, is an arms’-length body that falls under the Department for Business. Innovate can’t sit on Catapult boards or recommend appointments because “There are private and public sector clashes e.g. when Catapults are asked to deliver for Government, report on performance, and comply with government accounting rules”.

Orlowski adds that the report suggests the manufacturing and biotech catapults have had a positive economic impact. But the others? Not so much. three of the seven catapults have been put in the Last Chance Saloon: the “Transport Systems”, “Future Cities” and “Digital”.

EY adds: “With the Catapult network’s overall lack of a clearly articulated set of objectives, or a framework for measuring impact, and the current level of operational performance, it is unlikely that the impact of the network overall has been significant so far. . . “

“The “Transport Systems”, “Future Cities” and “Digital” Catapults urgently need to draw up new plans to justify their existence: funding should be halted if they can’t “prove confidence” with a clear new plan”.

Dr Ian Campbell, Interim Executive Chair of Innovate UK, has a more positive view:

“In their first five years the catapults have supported around 3,000 small businesses to develop and exploit new technologies. They operate more than £850m world-class facilities and are also training hundreds of apprentices and doctoral students, such as at the High Value Manufacturing Catapult where in the last year 900 apprentices have gained invaluable practical experience with cutting-edge technologies used in modern manufacturing.”

 

 

 

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Fracino: five years on

September 30, 2018

Aston coffee machine manufacturer Fracino was first featured on this site in 2012, with two blogs following on in 2013 – one being The ’Made in Britain’ mark: the FT cites Birmingham firm Fracino.

It is good to hear of Fracino’s TV coverage, from a Shirley reader, who comments: “the BBC has caught up!” He sent word that TV news (21st September) had reported from the factory with interviews with the founder’s son and Fracino’s MD, Adrian Maxwell (above), emphasising the “Made in Britain” mark as a selling point. They also interviewed a young (girl) apprentice and another manufacturing boss from other companies who had come in for the item

An online search revealed that a few days earlier the Greater Birmingham Chambers of Commerce reported 17 new appointments, including service engineers, boiler manufacturers and assembly line operatives, increasing Fracino’s ‘multi-award winning team’ to 70, continuing:

“A third production line has been installed to meet increased demand and a multi-million pound investment programme has brought benefits including cutting-edge production and fabrication equipment and modern, energy saving technology”.

The team sells thousands of machines every year to customers including Subway, Patisserie Valerie, Living Ventures Restaurant Group, AMT Coffee and Pathfinder pub chains. The manufacturer also exports to over 70 countries worldwide.

Admirable aspects of its work include:

  • fabricating the majority of the company’s components in-house,
  • placing a high priority on its in-house training certification for engineers, introduced in 2015.

Selected as the nation’s premier coffee equipment and beverage supplier

The first ‘State of the nation’ survey, which targeted over 500 coffee shops, was followed by a ‘Hot to Stock’ study of more than 400 café owners. Fracino emerged as the nation’s premier coffee equipment and beverage supplier.

And last Friday, Catering Insight reported that Fracino was invited by BBC Breakfast to respond to findings by the manufacturer’s organisation, the EEF, on how the UK is the world’s ninth largest industrial nation though most people think it is only ranked 56th.

A BBC crew filmed live from Fracino’s manufacturing facility where 5,000 machines are produced annually – each displaying the Made in Britain marque.

With predictions that the UK will take its place among the world’s five biggest industrial nations by 2021 if current trends continue, Adrian Maxwell says British manufacturing – which makes up 44% of total exports and directly employs 2.6m people – plays a vital role. He added that although the UK market has faced major challenges over the last 12-18 months, mainly due to the uncertainty surrounding Brexit, the manufacturing sector is booming.: “Fracino is proud to be making a key contribution with quality products which are commissioned by global brands.”

 

 

 

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Forward Industrial Products Group

September 4, 2018

 

Forward – which takes its name from Birmingham’s motto – is a Tyseley-based SME. It manufactures, imports and distributes fasteners, turned parts, varied MRO solutions and integrated managed stores to various industries in the Asia-Pacific, Central Asia, Middle East, Africa, Central/East Europe, West. Europe, North, Central and South America.

It specialises in the manufacture and supply of safety critical special fasteners and turned parts to their customers’ drawings and engineering requirements.

Forward supplies some of the largest manufacturing companies in the world. Much of its business is automotive and original equipment manufacturing but it also has an ever-increasing market share in the aerospace, rail, power generation, infrastructure, Ministry of Defence and oil and gas markets.

Its customers range from a one site operation here in the UK to multi-site international operations throughout the world, with partnership manufacturing sites in Europe, Taiwan, India and China, which have been developed over a long period of time.  More news of its customers here: http://forwardindustrial.co.uk/contact-us/

Should the delivery of product be delayed, damaged or even sink, Forward can manufacture at no extra cost here in the UK, using its own manufacturing facilities for cold forging and turned parts that replicate its supply chain abroad, to keep production lines going until the problem has been resolved.

No other distributors can offer such a service – and often when a competitors’ product is delayed they will ask Forward to ‘infill manufacture’ for them.

In August, Forward hosted a well-attended networking brunch for Made in the Midlands members at the iCentrum building at Innovation Birmingham campus. Keith Johnstone, Forward sales manager, gave a presentation to members outlining the company’s ethos and its strategy of Source, Supply and Integrate.

 

 

 

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Protective coatings made by Indestructible – a family-owned company in Sparkhill

August 9, 2018

Indestructible Paint, a manufacturer of high performance paints and coatings, started in 1978 in a small workshop in Acocks Green. Today it operates from a growing storage and manufacturing facility in Sparkhill near central Birmingham and recently acquired adjacent premises that will allow for expansion. 

It is an independent family-owned company, employing some 50 people. Founder Doug Norton, the chairman, works with Brian Norton, managing director, brothers Alan (finance), Michael (IT) and sister Jill (logistics operations).

Brian Norton says: “As developer and manufacturer of high performance paints and coatings, we have always taken the view that reliability of supply and product innovation are fundamental – particularly when allied to a commitment to working closely with customers of all sizes and disciplines”. A video takes the viewer inside the factory.

Its coating paint – approved by many including Rolls Royce and Pratt & Whitney – protects metal used in harsh off-shore, industrial, or chemical environments against humidity, salt water and chemicals. Heat resistant coatings are used in stoves, vehicle exhausts, fireplaces, engines, radiators, barbeques and brake calipers. Its innovative research and development facility designs products to meet the needs of individual customers.

The company’s current focus is on finding environmentally friendly alternatives to hexavalent chrome-based coatings used in the aerospace and automobile industry. In the U.S., the EPA lists hexavalent chromium as a hazardous air pollutant because it is a human carcinogen, a “priority pollutant” under the Clean Water Act, and a “hazardous constituent” under the Resource Conservation and Recovery Act.” 

Indestructible Paint exports to 65 countries worldwide, has active distributorship agreements from the Far East to the USA and customers include leading manufacturers in aerospace, defence, marine and general engineering.

The company won a 2018 Made in the Midlands Export Award (2017 award winners filmed here) because it showed that it understands the complexities and barriers of the global market and has overcome them to export 70% of its turnover.

 

 

 

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Salts Healthcare, now at Birmingham’s Advanced Manufacturing Hub in Aston.

July 17, 2018

Last year Salts Healthcare, which manufactures medical devices, moved into the Apollo building in Birmingham’s Advanced Manufacturing Hub in Aston. Here is a brief history from its Wikipedia entry:

Brothers John and William Salt started out as apprentice locksmiths in Wolverhampton in the early 1700s. Using the skills gained from his apprenticeship, John Salt became a well established surgeons’ instrument maker. In 1793 the business was passed onto Richard Salt who opened a second site in Coleshill Street. Thereafter the business moved to Bull Street and then Cherry Street. By the end of the 19th century, trade in Birmingham was improving and the Salts’ business was awarded the Royal Seal of Approval. Demand for medical products continued to grow into the early 20th century and, during World War One, Salts manufactured artificial limbs for serviceman injured during the war.

Salts is divided into three divisions:

  • Stoma Care, which designs and manufactures stoma care devices and additional products;
  • Medilink, a network of 19 customer care centres that supply and dispense stoma care and continence products by all manufacturers
  • and Techstep, which manufactures custom-made paediatric orthopaedic footwear (above).

Salts Healthcare International has a UK based International team working with highly skilled, experienced people across the world.

 

 

 

 

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Aston’s JS Wright sets up prefabrication unit

June 14, 2018

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As construction workers from EU countries leave following the Brexit vote and the skilled British workforce is ageing, Britain is once more turning to prefabrication.

In a new warehouse facility in Digbeth, J.S. Wright has set up a prefabrications unit, producing low carbon Heat Interface Units (HIU), which act as a bridge between the central boiler and the heating and hot water systems of individual apartments.

The HIU units will reduce installation times in large developments such as Mount Anvil’s 595-home high-rise Keybridge development and Hill’s 580-apartment canalside scheme at Fish Island Village in London.

After the retirement of JS Wright’s previous owners, the company was bought by its senior management team: the finance director, national design and estimating director, national mechanical contracts director and national electrical contracts director. (Aston premises, left)

Reuter’s Astrid Zweynert reported a major policy announcement in 2017; the government said it supported off-site construction, promised financial support for prefabs and to make public land available for “modular schemes”, as they are now known. She added, after a brief account of post-war prefab building: “Faced with a chronic, new housing shortage, Britain is once more embracing prefabrication as it struggles to meet its promise to build a million homes in England by 2020.

Valued homes: Grade 2 listed Phoenix Wake Green Road prefabs in Moseley

There are examples of a UK off-site construction industry emerging. York Press reported in 2017 that L&G Homes has been set up in a factory near Leeds to build up to 4,000 prefab homes a year. The factory, which is the largest of its kind in Europe, and will at full capacity produce 3,000 modular homes a year, has just revealed its first prototype.

Though many eye-catching detached homes have been built using continental modules, a linked Birmingham site focussed on low cost prefabrication. Building Design highlighted three prefabricated solutions to the housing crisis in 2016.


The first design (above), by Urban Splash, was one of the new range of low-cost prefabricated housing solutions being ‘rolled out’ across the country with the potential to help tackle Britain’s affordable housing crisis and offer new employment opportunities.

 

 

 

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