“Over the last 30 years we’ve offshored such a large degree of our manufacturing that we don’t have many sites left. But we’re going to see a change because Covid-19 has shown the need for supply chains to be flexible and more local. We really don’t know what could happen next in the world.
“We’ve certainly seen this flexibility during the crisis, with UK manufacturers being challenged to produce ventilators and PPE [personal protective equipment] quickly for the NHS. Manufacturers like INEOS have stepped up, repurposing an old chemicals plant into a hand-sanitiser operation in the North East in just 10 days. The main raw material came from Scotland.
“Moving forward, we need to look at a rebalancing of manufacturing assets globally, regionally and locally. Just having big plants in one offshore location isn’t good.
“We’ll see more investment in economies of scope rather than scale, namely smaller factories in the UK with the flexibility to produce multiple products and provide more supply chain resilience.
“Also, as we move to a circular economy, we will need to have assets in the UK to support refurbishment and remanufacturing.
“But there’s no point having a UK factory if there is no demand for the product here or it isn’t competitive on transport or labour.
“It is more about right-shoring than reshoring. It is ensuring, through cost analysis, that manufacturing assets are in exactly the right place, so maybe that’s one plant in the UK and one in Asia. Or nearshoring – moving plants from, say, Asia to closer to home in Europe.”