MAKE UK CONFERENCE NOVEMBER/DECEMBER 2019
HOLLOW SUPPLY CHAINS –
A VERY BRITISH PROBLEM?
The impact of Brexit on UK supply chains will be explored at Make UK’s
National Manufacturing Conference, which takes place in February 2020
www.manufacturingconference.co.uk
Over the last thirty years or so, UK
manufacturing supply chains have
become increasingly ‘hollowed out’ –
that is to say whilst the UK continues
to boast major manufacturing
success stories like our automotive
and aerospace sectors. The supply chains
upon which even these sectors are based are
increasingly dominated by the supply of imported
components and materials. Since the 1990s a
combination of globalisation, the growth of
manufacturing sectors in developing economies,
the relative strength of sterling, gaps in support
for innovation and commercialisation, and less
emphasis on technical education has eroded the
UK’s industrial capabilities, and weakened our
domestic supply chains.
The UK faces competition not just from
the increasingly cost-eff ective manufacturing
sectors in China and Eastern Europe, but from
well-established sectors in developed economies
such as Japan, Germany and France – modern
innovative sectors that have invested more heavily
in their manufacturing sectors, and supported in
doing so by supportive public policy frameworks
and long-term industrial strategies.
UK manufacturing supply chains have been
particularly aff ected by these processes and
challenges. Data published by the Government
suggests that UK manufacturers are now only
supplying half of the national demand for
components. For example It is estimated that
UK vehicle manufacturers import some £11
billion in components each year – 60% of their
requirements, compared to 40% in France and
Germany. And even this 60% important reliance
is likely to be a signifi cant underestimate of the
true fi gure.
The UK’s membership of the EU has both
facilitated this and moderated its impact.
As all trade and regulatory barriers were
gradually removed, supply chains across the
EU have become increasingly integrated and
interdependent. Components and materials can
be sourced as easily from elsewhere in the EU
as they can from within the UK. Moreover, for
the purposes of rules of origin with increasingly
important free trade agreements, it made
little diff erence whether a
component was made in Luton
or Lublin.
But with Brexit on the
horizon, are the UK’s hollowedout
supply chains going to
become more of a problem?
Are their growing structural
weakness going to become
more marked? Will new trade
frictions with the EU lead to UK
reshoring, or a further decline
in supply chain strength? How
will manufacturers meet new
rules of origin requirements in
UK FTAs? Should policy makers
and industry alike place more
focus on this issue and the
mechanisms that can reshore
and strengthen UK supply
chains? What would be the
economic benefi ts to the UK
of doing so? And what wider
trends in manufacturing, not
least 4IR, could help us in this
challenge?
As a foundation industry,
supplying into myriad
manufacturing sectors, the
Automotive
supply chains
are particularly
vulnerable to
any disruption
future health and vitality of
our manufacturing supply
chains is of critical importance
to the steel sector. And these
questions go to the heart of the
debate around the future of
steel production in the UK.
Join UK Steel at the Make
UK National Manufacturing
Conference 2020 on 25 February
in London to hear from a panel
of experts, who will look at
these questions, provide their
expert opinions, and engage the
audience in a topical discussion
about manufacturing supply
chains and the increasing
importance of their locality.
Speakers include Dr Rémi
Zante of the AFRC, Andy Page,
CEO of Sharing in Growth UK
and Deirdre Fox, director for
strategic business development
at Tata Steel.
For more information
and to register your place
at the event, visit www.
manufacturingconference.co.uk
36 www.manufacturingmanagement.co.uk
Main image: Process Underbody 24, taken by Jakub Wasik. Winner in the Amateur category of the EEF Photography Competition 2017.
/www.manufacturingconference.co.uk
/manufacturingconference.co.uk
/www.manufacturingmanagement.co.uk