As a manufacturer of chrome plated plastic components, Borough has witnessed a lot of change over its more than seven decades in business, charting a course through the troubled waters of interest rates, inflation spikes, regulation changes, shifting market forces and consumer fashion trends.
Over this time, one of the largest changes has been the shift from UK-based manufacturing, particularly of cars, which are now mostly assembled here from components brought in from all over the world, often delivered in large sectional pieces.
The promise of greater profitability through reduced manufacturing costs, on the back of cheap labour costs and less restrictive regulatory regimes has seen many UK manufacturing jobs lost to the Far East in this way.
But many manufacturers are again having to consider the fragility of their supply lines, given how the recent Houthi attacks in the Red Sea region are impacting global trade routes. This comes while the incident of the container ship blocking the Suez Canal for six days, remains fresh in our memories.
On 23 March 2021, the container ship Ever Given was travelling from Malaysia to the Port of Rotterdam where much of its estimated $700m worth of cargo was to be offloaded and forwarded on to the rest of Europe. But it got stuck, blocked the canal and held up nearly $60 billion of trade.
China appears to be applying pressure to Iran, which backs the Houthi militia, for safe passage for its shipping through the Red Sea into and out of the Suez Canal. This may work, but many freight companies have already re-routed shipping around the Cape of Good Hope, rather than risk attack.
However, the additional distance travelled will not only increase the cost of transport, but add almost a week to shipping times compared to those for vessels that continue to transit through Suez.
Today timing is everything
As one of Europe’s leading chrome platers of plastic components, many of which we injection mould specifically for the purpose of plating, we expect our work to adorn products of all shapes, sizes and complexity, in many different sectors, right across the globe.
We work with tier 1 suppliers within the automotive supply chain, moulding and chrome plating components for the exterior and interior of the some of the world’s leading marques. But like all suppliers in this sector, we have to meet very strict delivery deadlines, which come with onerous penalties should we miss them.
The threat of a road closure, or civil incident that risks delaying our deliveries is something we have to plan for, with additional stock held and ready to go by alternative routes if needed. How suppliers shipping components from abroad cope, given the vagaries of sea transport, is beyond me.
Few manufacturers or their logistics partners could have predicted the Ever Green getting stuck in the Suez Canal and delaying the transit of almost a thousand other vessels. It should have been a wake-up call for manufacturers highlighting the risks of long, fragile supply chains.
A pivotal year for manufacturing
Recognising the importance of the manufacturing sector and the need to attract jobs back to the UK, the UK government has committed £4.5bn in funding for strategic manufacturing, with re-shoring a major pillar of its strategy, in the face of fierce global competition.
Unveiled by the UK’s business and trade secretary during the Autumn Statement, the Advanced Manufacturing Plan, aims to make the UK the best place to start and develop a manufacturing business, with funding for the automotive, aerospace, clean energy and life sciences sectors.
Global supply chains remain vulnerable to the sort of disruptions recently witnessed, ensuring reshoring will continue to gain momentum this year, with businesses understanding the advantages of shorter supply chains and the increased resilience this provides.
Reshoring will also reduce the UK manufacturing sectors reliance on foreign suppliers, with the increasing pressure on the Chinese economy likely to cause disruptions to their position as the world’s preeminent manufacturing super power.
All of these factors add momentum to the drive to reshore manufacturing and jobs back to the UK, which makes so much sense given all the advantages.
Eliminating long-distance shipping cuts the associated costs, reduces the risk of disrupted supply chains and decreases the environmental impact of such shipping. All of which reduces production costs and increases supply chain resilience.
Reshoring also allows closer control of the production processes across the supply chain, which will undoubtedly improve product quality and output consistency. Far easier to ‘pop-in’ to a local supplier than catch two planes into different time zones to check a quality issue.
Competitive sectors require shorter lead times from production to market and re-shoring will significantly reduce these lead times, enabling businesses to adapt more quickly to market changes and meet customer demands more efficiently.
The hope for companies like Borough Chrome is that more UK manufacturers will address their supply chain concerns and invest in re-shoring initiatives, supported by Government incentives, to create jobs and boost local economies.
Whilst all of us here are staunch advocates of the reshoring campaign, we just hope takes longer to come to fruition than a few months, given our full order book and busy moulding and chrome plating schedules for 2024 – but we’ll always find time for you, so please get in touch if you have a need.
