Manufacturing Products in the UK vs China

Manufacturing Products in the UK vs China

This blog post explains key points you should consider when choosing where to manufacture your product, and will help guide your decision-making process.

Choosing where to manufacture your product can be tricky. When beginning a project journey you may be faced with the decision of where to manufacture your product, which is not a decision to be taken lightly. The manufacturing location can have implications on project timeline, costs, logistics and quality, so it is important that you are aware of all key considerations so that you can make an informed decision.

At Makers Department we work with manufacturers across the UK, Europe and China. Over the years we have built up an extensive knowledge and understanding of the pros and cons of using different manufacturers, so wanted to share our knowledge in this blog post.

1. How do I find the right manufacturer?

We have our existing network of suppliers and partners which can make this process much quicker and easier for anyone who wants to make a product.

If you’re looking into manufacturing yourself, then a good place to start would be with an internet-based search. AliBaba is also a great resource for sourcing suppliers if you’re unsure where to start!

While evaluating different suppliers, you can ask them what companies they’ve worked with (from your country if possible), from whom you can ask for a feedback. This helps build trust and confidence in the manufacturer, and gives a good insight into how a particular manufacturer works and the quality of their work.

Tip - videos can be a really useful tool. Some manufacturers offer virtual site visits or have videos where they talk about their processes.

2. Raw materials, industrial processes and local expertise

Think about the type of product you want to create. What materials is it made from? Where are these raw materials sourced? What processes will you use? These are important questions to ask that will help guide your decision-making.

Different locations specialise in different products, materials and processes, so depending on your product you might choose to manufacture it in a certain country that is known for producing those goods. For example, Portugal is known for producing cork goods due to the abundance of cork oak, and China is known for consumer electronics due to decades of manufacturing experience and access to large manufacturing resources.

In addition, some countries might have access to raw materials and have machinery to process the materials and manufacture the final product; avoiding the need to transport in between these stages.

3. International logistics & supply chain

Think about your supply chain and how complex it is.

- Local supply chain, where everything happens in the same country

- Multi-country supply chain, where the company, client and manufacturer could all be based in different countries

The type of supply chain will impact things such as costs of moving goods around (tax and freight implications), and therefore affect the overall costs. For example, it may be cheaper per unit to source a part in China, but it may work out more expensive once you factor in the additional costs of tax and import fees. Therefore it’s important to do some calculations before you go ahead and choose the location.

Speed to market is also something to consider. If sea freighting is too slow (as it has been during COVID) then air freighting might be necessary, and that comes at a much higher cost.

4. Factory visits

The distance and ability to be physically present are worth considering. If you are based in the UK and your manufacturers are in China, it is much harder to visit the manufacturer or see the process in action, whereas in the UK you can be much more involved in the process. You can check how products are being handled and being taken care of etc.

It is also easier to build up a relationship with the manufacturer if you are able to meet in person, although it is possible to do this from a distance too.

5. Building a relationship with your manufacturer

If you are working with a manufacturer in a different country that speaks a different first language to you, using annotated images is much clearer and avoids miscommunication.

Different cultures value different things and have different ways of communicating, so it is important you are aware of this and can communicate effectively with your manufacturer.

Send regular Design for Manufacturing and Assembly (DFMA) documents and ISO standard technical drawings to highlight important areas in terms of tolerances and surface finish, videos and photos of prototypes etc.

Make site visits to the manufacturer before final production to gain a full understanding of how they work and the processes they’ll be using. You can even bring the manufacturer into the development process as a stakeholder so that the product is designed in a way that works well for the manufacturer.

Consider how you will be communicating with your manufacturer. Will this be through email, calls, video calls, mobile messaging platforms? Think about which is easier and most appropriate on a case-by-case basis.

6. Financing the manufacture of your product

It is important to consider and discuss the business terms with your manufacturer so that you are both on the same page about what is required.

• Do you own and pay for everything including set-up costs and unit costs? Or does the manufacturer share the load (e.g. invest jointly in machinery)? If the manufacturer shares the load and invests a little bit in machinery, they may charge more per unit.

• Try to break the price down in a way that you can reduce your risks but also get people to trust you and work with you to start the manufacturing process, e.g. giving a percentage deposit up-front, and the rest on completion.

• It is important to consider both tooling and unit cost. Some people choose to get tooling made in China, as it is often cheaper there, then transport the tooling to a factory based in another location, e.g. the UK.

There are also other ways of working with manufacturers that isn't just contracting them for a job. You can offer a partnership to a manufacturer and offer royalties or you can create a joint-venture to share the profits of a product. These are alternatives where you give away ownership of you product and its sales in order to reduce costs of production.

7. Quantity

The amount you produce vastly impacts the cost of each individual unit/ product.

Things to consider include the cost of materials, labour, manufacturing processes, electricity, transportation etc. The higher the total volume of of your production (e.g. the more units), the cheaper it works out per unit.

Different countries have different labour costs and living costs, so this is another thing to consider when choosing which country to manufacture your product in.

Closing Notes

Just as the United Kingdom was the great "propellant" of the Industrial Revolution, China was also the hub of producing cheap consumer electronics. Just as the UK changed, China is also evolving into a different economy and moving away from high-quantity and low-cost manufacture. Other Asian countries are now becoming known for cheap manufacturing, replacing China. However, we must ask ourselves is "cheap" always the right answer?

'Made in the UK' is often used as a selling point for products, as people in the UK see this as an assurance of quality. This label can also have a strong standing with international clients/customers, e.g. Scottish Whisky is very popular in the USA. Despite of this, there has been a big decline in manufacturing in the UK, so do we have a social/ethical/economic responsibility to try and get our own labour force 'making' again?

At Makers Department we encourage our clients to be mindful and strategic about this important step. Bringing new products into the world comes with great responsibility and we should do everything we can to mitigate our impact on the environment and maintain high ethical standards. The future of good products is not just the final result, but also the journey it takes to become the final product.

Thank you for reading! We hope you found this post helpful and that it’s given you some food for thought. If you have any questions or comments feel free to add them to the comments section below. We’d love to hear your thoughts!