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Barclays research shows loyalty, quality and confidence dictate UK manufacturers' supply chain strategy

13 Aug 2012 09:37 GMT

UK manufacturing is vital to the global manufacturing supply chain however many manufacturers still fear the risks of global trade outweigh the opportunities, according to new research released today by Barclays.

Findings from a survey of over 200 manufacturers across the UK revealed an emphasis on quality and loyalty amongst UK manufacturers with businesses looking to each other for support rather than abroad.

Almost two thirds of those surveyed source commodities (41 per cent) or components (20 per cent) for their products from the UK rather than abroad (39 per cent), with over half (53 per cent) producing goods that are sold to the UK end user or used as components in UK production. For those that do source inputs offshore, 32 per cent look to China as a key market, followed by 19 per cent who source from Germany.

When asked what the key deterrent is for trading outside of the UK, 36 per cent state they simply prefer to source from the UK as a rule. This is followed by currency risk (19 per cent), with one in 10 (11 per cent) fearing goods or payment may not be received.

Mark Lee, Head of Manufacturing, Barclays Corporate Banking said; “There is a clear sign of patriotism amongst UK manufacturers as values, loyalty and confidence hold firm with proximity being seen as a key driver. Given the current economic climate, a focus on domestic strategies and procurement is understandable however manufacturers must not be afraid to play a lead role on the global supply chain stage.”

When it comes to choosing suppliers and winning business, the findings show quality is a defining factor. 40 per cent of manufacturers surveyed select a supplier based on ‘quality’, followed by 33 per cent who stated ‘price’. This perspective is reinforced when asked what wins them business with the key firms they supply, a majority 57 per cent stated ‘quality’ although only 16 per cent believe ‘price’.

Given fuel price increases, the costs associated with transporting goods are also impacting manufacturers’ decisions when choosing suppliers and where they supply to. Almost two thirds (65 per cent) stated cost was influencing their supply chain decision making with a further one in 10 (11 per cent) saying their decisions are being heavily impacted.

Despite the harsh economic climate, there is a confidence amongst UK manufacturers when it comes to stability and security of their place in the supply chain. When asked how they would describe the level of contractual security they enjoyed with the companies they supplied, over half (51 per cent) believed their customer relationships to be stable in the short term whilst one third (33 per cent) see stability for the foreseeable future.

Mark Lee added; “Self confidence and traditional values of quality appear to be key drivers behind UK manufacturers’ supply chain strategies. For UK manufacturers that are able to fully grasp the opportunities and risks related to global trade, there is undoubtedly a competitive advantage.”


About Barclays

Barclays is a major global financial services provider engaged in personal banking, credit cards, corporate and investment banking and wealth and investment management with an extensive international presence in Europe, the Americas, Africa and Asia.

With over 300 years of history and expertise in banking, Barclays operates in over 50 countries and employs approximately 140,000 people. Barclays moves, lends, invests and protects money for customers and clients worldwide.

For further information about Barclays, please visit our website www.barclays.com.