Reshoring & Supply Chain Sustainability
For decades, it’s been cheaper to import goods from around the globe than to produce them locally, but the tide is changing. So, what is driving reshoring and how is this impacting supply chain sustainability?
UK Businesses Favour Local Suppliers & Production
Brexit, Covid, the war in Ukraine and a rapid rise in interest rates. These are a few of the major events to have impacted UK businesses in recent years. In response, we have adapted and short-term solutions have been adopted. As a result, the majority of us have survived, yet resilience has taken quite a few hits.
To achieve greater stability, businesses are making changes to ensure supply chain sustainability. In many cases, action is underway to bring suppliers and operations closer together. Is your company one of them? We’ve been contacted by a growing number of companies that have been importing boxes and are now looking for local packaging suppliers.
There are many reasons for reshoring, including:
Reducing Supply Chain Disruption
In globalisation, the risks of disruption are great. Factors that impact imports include political unrest, natural disasters, pandemics and ships stuck in the Panama or Suez Canal. Unfortunately, such issues are out of our control, yet they impact business productivity, sales and reputation.
In sourcing locally and producing regionally, a business can reduce the potential risks. External factors still exist, but there are fewer of them. As a result, the supply chain is more sustainable.
Traceability Throughout the Supply Chain
Being able to evidence a sustainable and ethical supply chain has become a greater priority for most businesses. Knowing where every component is sourced and ensuring that the process isn’t harmful to people, or the environment, is necessary to avoid reputational damage.
When using local product and packaging suppliers, the chain is shorter. As a result, it’s easier to check credentials or visit to ensure expected standards are met.
Agile Business
In every industry, one essential for remaining competitive is to be responsive to market changes. We need to listen to customers, gather data and keep up to speed with what influences purchases. This insight informs actions and the shorter the supply chain, the easier it is to adapt.
With this in mind, reshoring makes it easier to avoid delays, reduce peaks and troughs of stock and minimise lead times.
Cost of Supplies
The unit price for products and packaging may be cheaper abroad, but the gap has narrowed. When factoring in all other elements, including shipping and documentation, the differences are minimal.
In addition, more of us are focused on the environmental costs. It’s difficult to work towards Net Zero if your business is reliant on global supply chains.
The Shift to Regional Sourcing
In an Accenture report*, 65% of respondents plan to shift to regional sourcing over the next 3 years. This is up from the 38% who already are. In addition, businesses are favouring production hubs in the primary sales regions. This practice is already used by 43% of the respondents and is part of the plan for 85%.
This, coupled with the adoption of digital systems is viewed as the way to future-proof business.
The report suggests that UK companies are collectively investing around £1bn to digitise, automate and relocate supply and production facilities. This is expected to increase to £2.4bn over the coming few years.
Local Packaging Supplier
If your company is looking for a local cardboard packaging supplier, get in touch with Aylesbury Box Company on 01296 436888 or enquiries@abcbox.co.uk
We are an FSC® certified company. As a result, we can provide information on our Environmental, Social & Governance which can help you evidence supply chain sustainability. Our friendly team provide a responsive service for industrial packaging or bespoke boxes, with a range of prints and finishes. If required, we also supply fillers and tape and can provide stock-holding services.
In addition, you are welcome to make an appointment to visit our Buckinghamshire factory, so you can see our operations in action. Is it time to think local?
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