The future of global sourcing

All of these issues are now causing many companies and organisations to review their offshore sourcing/manufacturing decisions. Whilst there will always be a case for low-cost country sourcing for many products, it will not universally be the case as the following news item suggests. 

A report into the state of the manufacturing sector by the Engineering Employers Eederation (EEE) and BDO, the accountants, finds that one in seven companies surveyed had moved production back to the UK from abroad in the past two years 

Many British manufacturers have outsourced production to countries with lower labour costs, in Eastern Europe or Asia, in the past decade, a trend that has accelerated as an increasing number of British companies have fallen into foreign ownership. 

But higher freight, energy and commodity costs have increased the expense of production overseas, while the recession has put pressure on companies to re-evaluate decisions on location. According to the EEE, the manufacturers organisation, 14 per cent of companies have moved production back to the UK because cost savings have not been as great as expected. 

Other reasons were that the quality of goods was not up to standard and that the speed of getting products to market was not fast enough. 

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