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How are European Manufacturers Building Improved Supply Chain Resilience?

As Europe’s manufacturing industries continue to recover from the operational and commercial challenges of the global pandemic, it has become increasingly clear that supply chain resilience will be a key priority and catalyst for change across sectors and geographies.

Disruption due to travel restrictions, staffing shortages, and the availability of drivers to transport products from overseas manufacturing partners have all prompted European operators to reconsider their reliance on an offshore supply chain.

At a critical time in the post-pandemic recovery for many sectors, operators are re-thinking their strategies. This is prompting the emergence of two clear trends for European manufacturing:

  • Reshoring
  • Increased stockholding

Reshoring

One of the predicted outcomes of the pandemic for industrial Europe is a ‘renaissance’ in manufacturing within Europe, rather than relying on global production partners. In the past manufacturing in the developing world has helped European manufacturers to reduce their overheads by capitalising on lower labour costs, available skills and economies of scale. However, it has also left them with less control of their supply chain and, therefore, reduced agility.

The need to compete in a challenging marketplace during the pandemic has highlighted just how much an arms-length approach to manufacturing can cost in terms of business continuity and serving the customer. Even those with their own operations in Asia have been impacted by transport delays and capacity issues.  It’s for this reason that many manufacturers are now reshoring key parts of their operations back to Europe. They are either reconfiguring or extending existing industrial assets, or creating new factories.

Of course, reshoring does not always mean bringing production back to the headquarters location. There may be operational, commercial, or logistical reasons that make this challenging; such as a lack of available sites close to home, skill shortages or cost implications. So, for some, reshoring may mean establishing a new site somewhere else within the EU. In this way, their supply chain and compliance considerations are streamlined, and transport arrangements are simpler and lower cost. However, they may still be able to benefit from lower labour and property costs, in addition to skills availability.

At AIS EURELO, we are ideally placed to help manufacturers across all sectors with their reshoring projects; whether they are bringing production equipment back to an existing plant or establishing an entirely new production facility. With branches in Germany, Poland and the Czech Republic, we have an excellent reach across Europe. We are experienced in working across borders, within Europe and beyond, to manage the complexities of moving machinery between countries. Our skilled teams and wide range of lifting equipment and vehicles mean we can carry out both decommissioning and installation to the highest standards of safety and compliance in any location.

We are working with manufacturers across Europe to help them prepare to compete effectively in industries that, while still global, now have a clear emphasis on acting local. Our capabilities include reconfiguring existing plants, including making any temporary modifications required for ingress and egress of machines and equipment. We can also handle turnkey factory relocations. This includes completing a full asset register audit as part of the decommissioning and reinstallation process.

Increased stockholding

While reshoring has become a trend for manufacturers in Europe, experts are clear that the return to manufacturing capacity on European soil does not signal an end to global supply chains. Far from it. The scale of Europe’s reliance on supplies from global partners means that operators must also consider ways to improve the resilience of the supply structures they already have. A key strategy for this is increasing stockholding.

For some, increasing stockholding rather than reshoring is an approach that requires less capital expenditure and is faster to implement. For others, it may be an interim measure while a longer-term reshoring project is planned and implemented. Either way, it requires increased warehouse capacity. This often also involves revising systems and equipment to enable effective stock management and order picking requirements.

Once again, AIS EURELO can help. Our expertise in the warehousing sector means that we can reconfigure warehouses and transform them into high bay and very narrow aisle (VNA) facilities. We can also deliver complete fit out programmes for new warehousing assets and install specialist equipment. This includes automation and robotic systems, with a joined-up service incorporating lifting and moving, electrical engineering and commissioning.

Again, many operators may choose not to increase stockholding on their existing site but to locate a new facility elsewhere in Europe to improve reach and reduce risk. As an industrial services provider that specialises in cross-border projects, we can help with all lifting, moving, decommissioning and installation requirements anywhere in Europe and beyond, with all local compliance and safety included, and paperwork provided in all relevant local languages.

Capitalising on Supply Chain Renaissance

The pandemic has made five-year plans devised just a couple of years ago seem as though they are from another era. After months of uncertainty and firefighting to deal with the challenges of the pandemic, European manufacturers can now make long-term plans again. At AIS EURELO, we are working with operators to help them implement those plans and leverage the maximum value from our expertise in moving assets and operations across European borders and beyond.