The UK was at the forefront of the industrial revolution with indigenous and international brand leaders paving the way. For over 100 years SMS Electronics has been part of that landscape.
As lower cost geographies in Eastern Europe and China emerged, the UK became overlooked in the ‘where to outsource to’ conversation. Twenty years ago, there was almost a mandate for electronics manufacturing to relocate to China, without question, as one blue chip company followed another, with this trend rippling down to the start-up community. But, through various market forces, we’ve stopped in our tracks to ask the question.
Does manufacturing offshore actually make strategic sense? Is it smart? Is it simple?
With rising labour costs across China and Eastern Europe, the cost of labour starts to balance out, which is why the attributes of outsourcing in the UK are once again being discussed. And what we can’t overlook this time around, is the wealth of engineering experience and manufacturing knowhow this region has held for over a century.
When Total Landed Costs Doesn’t Always = £’s
Steven Blyth, Director of Sales and Marketing, is the person within SMS who is connected to this conversation with our SMS Electronics – Smart Made Simple customers. SMS has witnessed an upswing of customers either:
- Returning to the UK with their entire production requirements
- Splitting their requirements by keeping a percentage offshore, whilst committing a percentage to return to the UK
- Starting up with new projects in the UK only
At SMS, we are focussed on ‘knowing our customers’ completely, which is why we don’t simply take their new or returned business for granted. We want to completely understand the market forces driving this geographical shift, to consider how we can meet and exceed their needs from our physical manufacturing base, production environment, and people skills.
Smart Shoring – Making it Where it Make Sense – It’s Smart Made Simple
Why are our customers looking at the, as we at SMS call it, ‘smart shoring’ roadmap? Well, there are several reasons, so let’s start our story at the beginning of the production lifecycle (PLC).
- Integrated Design Services
Many Electronic Manufacturing Service Providers (EMS) put ‘Design Services’ up as one of their value-added solutions on the slides they will present to their new Original Equipment Manufacturing (OEM) prospect/customer. The reality is however that they are not a New Product Introduction Centre (NPI) and lack the actual dedicated space and engineering ability to truly offer an integrated design service. At SMS however, we not only have our amalgamated knowledge network, which consists of design partners at its core, we can design and build prototypes, and have invested in 3D printing to offer additive manufacturing, which enables us to accredit a product to move it seamlessly from sketch to scale in an efficient way.
- Going Local Benefits
With the increased interest and focus on starting the electronics manufacturing process at the design phase, there is an amplified desire to keep close. As an OEM enters the design cycle, they appreciate being able to visit their manufacturing partner to study, observe, and learn how their product is progressing. Being face-to-face enables them to tap into, and benefit from local engineering support and this engagement is priceless. Spotting issues early, making changes in real time, and developing your product to ensure it is Designed for Manufacture (DFM) are crucial to early market entry, time in market, and fundamentally time in yield counts, especially in a competitive landscape where speed and being first really matters.
- Reducing Risk by Keeping their Supply Chain Simple
Over the years, we’ve seen a lot of factors which have disrupted the supply chain.
From natural disasters such as ash clouds, volcanic eruptions, floods, snowfall etc, to the more recent manmade crises with logistical issues, ports being overloaded, container shortages, the Suez Canal adversities etc.
Add these to the political landscape challenges of Brexit, plus the economic and social costs of COVID-19, and we’ve faced the worst component shortage challenges in decades, it’s no wonder that our customers have told us that they want to be more in control.
Our customers have alluded to how out of control they felt on the other side of the world as news of a global pandemic took over our news coverage. With offshore facilities closing, in many instances communication stopped. Customers were left uncertain about where in the production process their products were situated. They were blind to what was in front of them as COVID-19 led to component shortages and lead-time extensions. It’s at this point that clear, concise communication is key. And it’s at this point that many OEM customers started to consider spreading their risk to bring their business back to the UK.
If our OEM customer is in the UK, they appreciate that we are in the UK, for the UK.
We are accessible 24/7 with no cultural, language, or time zone barriers. If our customer has a problem, we don’t stop until we’ve fixed it.
We’ve worked with our OEMs to ensure that we have a transparent and traceable supply chain to plan for disruption and to offer alternative solutions to lessen its impact or to avoid it completely.
About Smart Made Simple
SMS – the U.K.’s leading Manufacturing Service Provider
From concept to creation, to commercialisation, to customer, for all technology companies. Whether you are a start-up, or an established household brand name, if you have a design, engineering, manufacturing or supply chain problem, thanks to the diversity of our experience and scalable service, SMS has the solution.
Since 1920, SMS has manufactured electronics products from the same home in Nottingham, U.K. For over 100 years, we have been the company behind the ideas, offering agile and adaptive supply chain solutions, that bring products to market faster, smarter and simpler.
Leader in the specialist low volume, highly complex manufacturing services market space, SMS has earned critical industry facility certifications, that brings full viability and credibility to the aerospace & defence, communications, industrial and medical markets. SMS brings the right scale, capabilities and competitive solutions to customers needing high-reliability attention, product realisation and supply chain optimisation.
For further information, visit www.smartmadesimple.com.
About our dedicated Development Centre: https://smselectronics.com/wp-content/uploads/2017/07/About-our-Development-Centre_FINAL.pdf
If you have any questions about this article or any services/solutions that Smart Made Simple (SMS) offer, please contact Director of Sales & Marketing, Steven Blyth.