Research by the organisers of the Subcon exhibition, the UK’s
showcase event for subcontract and contract manufacturing, shows that the
sector is set for further growth. Not only is the volume of work set to grow in
the coming year, but OEMs and higher tier suppliers are continuing to take a
more strategic approach to the long-term outsourcing of their production.
Almost 90% of the companies surveyed said they planned to
increase or maintain their level of subcontracting over the next three years
and 36% had brought work that had previously been sourced in low-cost countries
back to the UK.
Reflecting these trends, the Subcon exhibition, which takes
place at the NEC from 12 to 14 June is expected to be around 20% bigger than
last year’s event. Around 300 exhibitors will take part, with the proportion of
UK
exhibitors increasing to around 70% from 55% in 2010 and 65% in 2011.
The Subcon research clearly showed the degree to which OEMs
rely on external suppliers of manufacturing services. Nearly a quarter of
companies surveyed (23.7%) entrusted subcontractors and contract manufacturers
with over 60 per cent of their manufacturing requirements. Nearly half (48.5%)
say this proportion has increased in the past three years.
The reasons for using subcontractors are evolving too, with
the emphasis on more strategic outsourcing.
Half the respondents cited the traditional reason
of needing more capacity as one of the reasons they use subcontractors – but a
similar number say they also use them because they want to focus on core
competences in their own manufacturing operations.
41% used subcontractors to gain access to processes they
didn’t want in-house and a third were using subcontractors rather than
investing in non-core capital equipment. For 45%, it was also a simple case of
keeping costs down, as they reported that it was less expensive to use
subcontractors than make their parts in-house.
Most wanted more than just parts from their subcontractors.
45% wanted assembly work done, while nearly 40% wanted a full manufacturing
service from a one-stop-shop. Customers also wanted their suppliers to manage
treatments for them, source third party components and accept ship-to-line and
Kanban responsibility.
Over a third wanted suppliers to take responsibility for
inspection and a fifth also wanted them to carry out product testing services.
Subcon Event Manager Jon Clark commented on the results: “It
is quite clear from the exhibitors we are attracting to Subcon that the
industry has moved up a gear. We are seeing bigger companies at Subcon, we are
seeing more companies offering full one-stop-shop services, we are seeing more
companies with high-level accreditations and we are seeing a trend to larger
and more impressive stands.
“The scope of the show continues to expand to meet the needs
of our visitors. We expect that around 25% of the companies at Subcon this year
will be exhibiting at the show for the first time. We are seeing more composites companies, more 3D modelling and design
services companies, more electronics companies and more heavy engineering
companies. These complement our traditional base of companies offering
machined, moulded and fabricated components, metal treatments, castings and
forgings.
“Subcon really is the UK’s only place that buyers of
contract and manufacturing services can find this breadth, number and quality
of potential suppliers.”
