Star lathe is a fantastic piece of kit

The company was recently awarded a two-year contract by a customer in the construction industry to p
Read More

18/05/2012

The Samsung’s Weight and Tool Size Won it for Dugard

In November 2011, the company made their first Dugard purchase, a Samsung PL45MC CNC lathe
Read More

18/05/2012

Medical device manufacturer invests in new Doosan high-performance turning centre

The machine – a Puma 2600Y – was installed at the company’s purpose-built manufacturing facility in
Read More

17/05/2012

Dugard ECOs ideal for Steel, U Drilling, Hogging and Profiling

Whitcher CNC Limited was founded by Peter Whitcher in 2008, just at the start of the recession
Read More

UK Manufacturers Take on the Supply Chain Challenge

Story added 12 January 2012.

MORE NEWS

This year’s Subcon exhibition on 12 to 14 June at the NEC, Birmingham, will showcase a subcontract and contract manufacturing sector that is ready for growth.

As the government invests to support the UK’s advanced manufacturing supply chains, and major companies such as Jaguar Land Rover announce massive expansion plans in their UK operations, the question arises as to whether UK suppliers are ready for the challenge. On the basis of the evolution of the Subcon exhibition over the past five years it is clear that tier two and three subcontract and contract manufacturers have already embraced the changes needed to play a major role in a rebalanced economy.

Subcon’s focus is on the companies that provide manufacturing services to higher tier manufacturers and OEMs. Whereas with the primes and OEMs their intellectual property is in the product and the brands, the intellectual property of the subcontractors lies in the processes they offer and their ability to deliver high-quality components to the precision requirements of the customer.

The term ‘subcontractor’ is in many senses a misnomer. It is not a phrase recognised in many sectors and is often regarded as simply referring to a fairly unsophisticated company that ‘fills in the gaps’ when the customer needs extra capacity. The truth is that the subcontract sector has developed and evolved to the stage where it has become a central part of the manufacturing strategies of most large manufacturers. In most cases a ‘subcontractor’ is indistinguishable from a ‘contract manufacturer’ or a tier 2 or 3 supplier.

Using a third party manufacturer offers a range of benefits, not least the ability to respond flexibly in volatile markets. It allows rapid increases in output without the need for capital investment or recruitment, and can be shut down just as quickly. It gives access to technology and expertise that economies of scale would not allow to be brought in-house and it puts manufacturing in the hands of the experts who know how to get the most out of their processes.

The increasing reliance on subcontractors has been clear in the growth of the Subcon exhibition – between 2007 and 2011 the number of exhibitors increased by 91% and the number of visitors by 94%.

It is not just the volume of subcontracting that has grown, the demands being made on subcontractors have become more sophisticated. Today’s supply chain managers want to be able to source a complete package of work from one supplier – a one-stop-shop – which may either have an integrated in-house operation or manage a series of sub-suppliers. The customer has just one point of contact, one supplier to audit and one invoice to pay. And more and more of these suppliers also offer design and development services too.

Again, Subcon’s growth illustrates these trends. The number of companies claiming to offer a ‘one-stop-shop’ service has nearly trebled – with over a third of them also offering design and prototype services.

The wider application of outsourced manufacturing is also clear in the spread of technologies offered by Subcon exhibitors. Whereas the traditional range of disciplines encompassed by Subcon were mainly focused on metal processing – machining, casting, forging, press-working, sheet-metal work – the number of plastics moulders, design/prototyping companies and contract electronics manufacturers has trebled. Materials suppliers such as Thyssen Krupp and ASD have also started exhibiting, as have suppliers of related manufacturing technology – 3D printing from Hewlett Packard for example and advanced metrology equipment from Hexagon Metrology, Faro, Aberlink and Nikon.

The exhibition also disproves the myth that all UK manufacturing is slowly moving overseas to offshore suppliers. It is true that most OEMs want to include an element of low-cost sourcing in their supply chain strategy, and want to benchmark their suppliers against global markets, but there is a strong trend of work returning to the UK. Cost differences between UK and overseas suppliers are narrowing, while market volatility, material cost risk and currency risk mean that few companies want to live with a four month lead time as their parts travel from Asia. And the recent impact of natural disasters in Japan and Thailand have brought into sharp focus the ‘unknown unknowns’ inherent in an extended supply chain.

The Subcon statistics bear this out – two-thirds of the exhibitors at Subcon 2011 were from the UK compared with around 55% in 2007.

As Subcon Exhibition Manager Jon Clark explains: “The past five years have seen a transformation in the UK subcontracting sector and that is evident in the growth we have seen at Subcon. We are seeing high-quality exhibitors, a better balance between metal, plastics and electronics, the involvement of manufacturing equipment and materials and a convincing technology offering, notably in metrology and measurement but also in design, prototyping and 3D modelling.

“Subcon is cross-sector and international; it features world-class contractors and the latest technology; the visitor profile is notable for the high level of procurement and supply chain professionals from blue-chip OEMs and major industrial engineering groups. These are the key decision makers for strategic outsourcing projects. They are complemented by the design teams that have major input into outsourcing strategies for new contracts and the production professionals who are responsible for tactical subcontracting and special process outsourcing.

“I think that the UK subcontracting sector has only just begun to show what it is capable of. I expect to see further dramatic growth in the next five years – and Subcon will continue to be the industry forum for all that is best in the contract, subcontract and tier2/3 manufacturing sector.”

GO BACK