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August 10, 2012


James Eadon

The drip drip drip effect is due to the thermodynamic tendency of things to equalise over time, to come into equilibrium.

Sheamus J Maher

Closer to home can mean at home. From a parochial UK perspective the decline of Chinese production opportunities has to be a truism. Producing in England can be economic. Sometimes it is all too easy to think mass production = Far East. True the great advantage HK and China have is a great infrastructure; finding stuff once you know your way around could not be easier and there are many support functions (at a cost) on the route. It is too easy to get sucked into the assumption that the UK cannot produce, or that overseas is easier.
I am an expert on, allegedly, many business aspects, one being sourcing of toys and gifts and I was recently retained to advise on outsourcing a decorative product for laptops and phones etc., with a specific request to review moving production of several 100k to China. The client already had a production unit in the UK but it was concerned about both cost and capacity and, not unusually, assumed China would be more cost effective. I would not be writing this if the result was conventional; it transpired after many e-mails & conference calls to raw material suppliers and factories all over china that the UK was not only comparable on cost but probably better by at least a factor of 3, possibly more after full account of cash flow implications and freight etc.
In this case the business owner had started small and sourced the plant, machinery & people he needed to run an SME, one which grew to “medium” pretty fast. What is interesting is to contemplate the idea that had the current volume arrived at one hit he would have tried to place production overseas as no such contract production existed in the UK. In that case the project would have never taken off as the costs would have defeated the opportunity, and hence no wealth and job creation. But, because he grew organically, he had to resource in the UK and has a strong and efficient organisation as a result. This is one example of why banks need to support start-ups, and also a shining example of how to produce in the UK. It is a business plan that will not always work but in today’s climate it is worth thinking about …………..always challenge an accepted truth.

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