Subcon 2012 UK subcontracting market set for growth
Research by Centaur Media plc, organiser of the Subcon exhibition, shows that the UK subcontract and contract manufacturing sector is set for further growth. Reflecting that trend, Subcon 2012 itself is expected to be some 20% larger than last year’s event.
Almost 90% of manufacturing companies surveyed by Centaur Media said they planned to increase or maintain their level of subcontracting over the next three years, and 36% had brought back to the UK work that had previously been sourced in low-cost countries. Not only is the volume of work anticipated 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.
Subcon, the UK’s showcase event for the industry, takes place 12–14 June at the NEC in Birmingham. According to the organiser, approximately 300 exhibitors are participating, and some 70% of them are UK companies.
The Subcon research conducted by Centaur Media revealed 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 more than 60% of their manufacturing requirements. Almost half (48.5%) said this proportion had increased in the past three years.
The reasons for using subcontractors also are evolving, with the emphasis being on more-strategic outsourcing. Half of respondents cited the traditional reason of needing more capacity, but a similar number said they use subcontractors because they want to focus on core competences in-house.
Forty-one percent used subcontractors to gain access to processes they wanted to keep out of house, and a third chose them to avoid investment in non-core capital equipment. For 45%, it was a case of keeping costs down, as they reported it was less expensive to work with subcontractors than to make parts themselves.
Most wanted more than just parts from their subcontractors, with 45% seeking to outsource assembly also, and nearly 40% desiring complete manufacturing services from a one-stop shop. Customers also wanted suppliers to manage treatments for them, source third-party components and accept ship-to-line and kanban (just-in-time) responsibility. More than a third of customers sought suppliers to take responsibility for inspection, and a fifth wanted subcontractors to perform product testing.
Subcon event manager Jon Clark said the results of the survey were visible in changes at the fair. “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.”
Clark said he expected the show’s scope to expand to meet the needs of attendees and expected a quarter of the companies displaying at Subcon 2012 to be first-time exhibitors. “We are seeing more composites companies, more 3D-modelling and design service 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.”