Sourcing Manufacturing From Europe – The Benefits
Since the onslaught of Covid19 and the global pandemic there has been a major rethink by many companies, both large and small, about their supply chains, the risks associated with them, in particular, there has been a focus on moving production closer to company head office or closer to where customers are located.
China has many great advantages that all are aware of, however, there is one major disadvantage and that is transit or delivery time. With global logistics firms creaking at the seams due to under capacity and local/national delivery companies feeling the pinch when it comes to their own capacity issues, getting goods delivered on time to an end customer is now a much bigger challenge than before.
This is where onshoring/nearshoring comes into play. Moving previously outsourced services from one location, far away, to a more geographically favourable position is a process that many organisations are currently engaged in.
The following points outline the benefits of moving production closer to home:
- Lead Time – An obvious one. Both sea and air shipping time can be drastically reduced by moving production from China to Europe for example (if Europe is where your company is based). 30 – 40 days shipping time becomes 3- 5 days transit time in many cases. No need to hold as much inventory or stock now thus reducing the need to tie up capital and therefore freeing it up to perform in other aspects of your business.
- Quality – Producing in Europe V China has long had a perceived superior quality balance in favour of Europe. China has long since caught up with high-quality goods being made there on a daily basis.
- Innovation – Again Europe is seen has having an advantage of being in the lead over China when it comes to product and industry innovation. The traditional route has been for Europe to innovate and China to make.
- Forced/Slave Labour – The recent news about the absolute abhorrent treatment of the Uighur people sent shockwaves through the entire fashion and textile industry. Conducting audits, verifying supply chains in that region etc has become a box-ticking exercise when news appears of the terrible treatment of Uighur Muslims. Any organisation should seriously question their values and commitment to a better world should it knowingly engage with companies that use force.
- Conclusion – take great care when choosing the appropriate supply chain for your company. Balance price v speed, quality v sharp practice and above all take a look at your conscience and make sure that wherever you buy from has strict procedures in place to ensure fair and respectful treatment of workers.