Reshoring: What is it and its impact on the Manufacturing Sector

The concept of reshoring is especially important for the manufacturing sector. By contrast with offshoring which is the process of transferring or relocating business operations to another country, reshoring is the process of returning the business operations, production and manufacturing of goods back to the company's native country from an international location.

Brexit as a driving force for Reshoring

Since Brexit and the increasing complications and expense of dealing with the EU, reshoring has been of paramount importance to ensure long-term costs are reduced, there is continued improvement in the quality of production, and to avoid supply chain bottlenecks.

Many manufacturers had been highly dependant upon the frictionless trade opportunities that came with being members of the EU. Not only did this help to maintain reliable supply chains, but EU manufacturing workers were also used to help bridge the skills gap that has been very much exposed since the referendum result.

Why may businesses need to consider reshoring?

Research from Make UK has indicated that two-thirds of companies view the UK as a competitive manufacturing location. Not only this, but a third would also consider reshoring some of their operations. This brings with it the ability for companies to rely on domestic production, and thus avoid international backlog, red tape and associated costs and risks.

There are key advantages for why your manufacturing business may look to reshoring business operations:

• There is greater certainty around delivery times (they are much shorter as a result). This comes with the benefit of the size of the UK meaning that fast delivery times are easier to come by as opposed to overseas manufacturing;

• It minimises the risk of supply chain disruptions;

• There is much reduced complexity around the supply chain, and therefore more flexibility;

• It increases certainty around the quality of production. By preserving and maintaining the quality by shortening supply chains, this reduces risk in a market such as the UK where customers have a high demand for quality and efficiency; and

• With global supply chains still recovering from the impact of the pandemic, there is less cost advantages of producing or sourcing overseas.

Our Commercial team here at Forbes Solicitors have a wealth of experience to deal with the prospects of your business looking to consider reshoring and implementing the associated contracts. With this experience, we understand the challenges that your manufacturing business will encounter and the climate of the industry at present. We can help advise you on the possible opportunities that can arise through reshoring, and how you can ensure you are best placed to continue to grow and maintain production and your business operations. If you would like to discuss further how we can assist you with what has been highlighted here, please get in touch today.