Large companies at the head of supply chains need to consider switching to indigenous supply as this leads to a competitive advantage because of reduced risks and increased responsiveness.
Not my words, but one of the conclusions of a report by Cranfield School of Management on behalf of the ERA Foundation which argues that the strategy of large UK manufacturing enterprises is at direct odds with the approach taken in developed countries such as Japan and Germany.
It’s a reflection of what the past couple of years (and Fred the Shred) have done to perceptions of manufacturing.
Back in the Thatcher era, it was politically incorrect to have any regard for it: the future was to be in financial services. In such a hostile political atmosphere, it’s hardly surprising that benefits of offshoring were so eagerly grasped by manufacturers.
And it would have been positively heretical to produce a report entitled “Rebuilding the UK Manufacturing Supply Base” that suggests that the UK’s manufacturing sector could see renewed growth if original equipment manufacturers (OEMs) became better stewards of their supply base, and government policy changed to facilitate this development.
Even so, Professor Alan Braithwaite, director of the Supply Chain Research Centre at Cranfield School of Management, and chairman of LCP Consulting, felt moved to point out: “We are not arguing that uncompetitive suppliers should be propped up, rather they should be actively encouraged to improve.”
Are we on the verge of seeing an about-turn in the way manufacturing supply chains are perceived? Probably not, but change is in the air.