Businesses need to balance disruption risks and utilise what is available globally and locally to increase their supply chain agility.
The world has changed. Conversations regarding global supply chains, reshoring and offshoring are now frequently a part of mainstream media and the wider public debate.
Discussions around where and how products are manufactured are increasingly important in the fight for jobs, trade, national security and even political votes.
We are in an era of uncertainty, with a large number of volatile factors affecting the world, not least the manufacturing and supply chain industries. Populism, climate change, global pandemics and trade disputes are now genuine concerns for manufacturers. Traditionally, economics would have been the defining criteria for supply chain decision. Where can I get this made the cheapest? Who has the greatest quality? How long will it take from order to delivery? These questions are still valid, but there are now many more questions to be answered before adding a new manufacturer to the supply chain.
Businesses need to balance disruption risks and utilise the very best of what is available globally – and locally – in order to increase their supply chain agility.
The Age of Information
100 years ago manufacturing locally was the only viable route. The reason why? It was difficult to send and transmit information. Without the benefit of Computer-Aided Design and the internet, communication would have been conducted by posting paper drawings and letters.
Jump forward to 2020, we now have choices, locally, nationally and internationally. All enabled by the digitisation of information. Having so many options isn’t always a good thing, it can cause decision paralysis. How do you find a manufacturing partner that is right for your business?
Why manufacture locally?
Working closely with local suppliers can bring great benefit to your business and to the local economy. Businesses based in renowned engineering nations such as the UK, US and Germany will find they have a wealth of manufacturing capabilities on their doorstep.
Finding a local manufacturing partner can mean shorter delivery times, improved communication and close working relationships. For projects that require urgency, nothing beats being able to deliver and pick up a project the same day. By removing complex international logistics and couriers from the equation, projects can be comfortably within your control. Finding great local manufacturing partners is particularly useful when projects are complex; having the same language and cultural understanding can remove many of the headaches concerning whether all requirements were fully understood.
Partnering with local supply can also insulate you from potential trade barriers and tariffs that are increasingly wielded by global politicians. A few years ago, businesses would have felt confident in having long term visibility on international trade, however, in today’s climate, can the same be said? For some businesses, mitigating the risks of international trade is crucial. Additionally, partnering with suppliers that operate in the same currency can also provide price stability, as the effects of volatile international currency markets are reduced.
How to find great local manufacturers
Look for clues and indicators that a supplier has a deep understanding of the modern world they are operating in. Whilst it may be unwise to judge a book by its cover, do initially look for a supplier that cares about their brand. A manufacturer’s values should run through every vein in their business. In our experience, companies who consider their values carefully, often have strong management practices and pay close attention to the level of service they offer. Look for a business that has a holistic approach to their own business, the same is likely to be true for their production.
Start small. Small manufacturing firms (~20 people) really do have the edge in offering a great service as they have the accountability and the drive to focus purely on you and your business. Building strong, lasting relationships with smaller suppliers is naturally easier as both businesses ultimately become large stakeholders in each other’s operation.
On the other hand, having a global outlook allows businesses to find the very best manufacturing partners for the job. In today’s modern world, there is no need to settle for closeby options. Go to where the best manufacturers are. Global supply chain infrastructure is now a highly efficient network that allows businesses to produce groundbreaking innovative products; hopefully, the solutions to the many hurdles this world has to overcome.
One reason to look across the globe for an addition to your supply chain is to tap into regional expertise. For example, Slovakia for wood processing, Bangladesh for textiles, China for tool making. With the large industrial parks present in China, the availability of raw materials and the proximity of auxiliary services result in an extremely efficient operation. Capability is king, and a select few Asian countries dominate in many manufacturing industries. Beyond infrastructure, China has cultural subtleties around work and working hours meaning that productivity is much higher in these countries, bringing lead times down much further than one might expect.
Tips for building relationships with international suppliers
Once an international supplier has been found, it is important to build a trusting relationship. Similarly to a local supplier, take the time to understand your overseas supplier, their values, capabilities and people. By investing time building strong relationships with your suppliers upfront, the rewards will be reaped when you need your supplier in times of crises.
It’s important to determine how to communicate with your international supplier; in many cases there may be a language barrier to overcome. Communicate clearly, using visual aids where appropriate to convey complex instructions. Evernote’s Skitch tool for example, is a useful tool to annotate drawings and 3D CAD files in order to communicate visually. Furthermore, consider using overseas communication channels. One great example is using WeChat to quickly communicate with manufacturers in China. Don’t forget, whilst email is still the most commonly used communication medium, some communication tools are less prevalent and even banned in certain countries.
From a logistical perspective, it is crucial to fully understand the shipping and customs considerations when working with international suppliers. Determine how the parts will be shipped, how long it will take and how much import duty will need to be paid. Understanding these key points will ensure there are no nasty surprises once your parts have finished being manufactured.
How can “Manufacturing as a Service” providers help?
Businesses ultimately need to utilise the best of both international and local supply chains. They are not mutually exclusive. Monitor global and local news, currency, capabilities and quality so you can dynamically adjust your supply chains. Consider using a Manufacturing as a Service (MaaS) provider which can help overcome these challenges by configuring your supply chain based on your immediate requirements. MaaS providers spend years refining a selection of reputable and high-quality local and international manufacturers. Working with a MaaS provider allows for the unique benefits offered by local and international manufacturing, without the risk of encountering poor quality suppliers. For example, every CNC Machined project is unique and a MaaS partner can help you manufacture with the most appropriate supplier, wherever they may be based. Couple this with an added level of customer service and it’s clear to see why there is a growing trend towards utilising MaaS providers for producing parts both locally and internationally.
Luke Smoothy’s background was in designing award-winning office furniture, which taught him how to expertly manage complex projects from design to production.
Design and engineering are hard skills to master, but something that is even harder is getting things made. You can see where the name comes from! Luke spent a great deal of his time working with factories, getting prototypes made and getting products into production for clients. He realised two things, he was good at it, and most importantly, there was a huge difference in service and quality between great suppliers and average suppliers. Completely ignoring the many bad ones!