It’s official, the United Kingdom is a Best Value Region (BVR) and is likely to remain so for some considerable time. In the past, great efforts were made to engage manufacturing regions such as Eastern Europe and Asia Pacific. Some of this outsourcing did prove profitable, particularly for high-volume producers, but even then, when it came to the manufacture of more complex lower-volume products (HMLV) the case was not so well made and there was sense to stay in locations where personal contact and a common language were assured. 

Unit production cost is no longer the only consideration for those seeking a manufacturing partner.  Those considering such a move are now thinking more about the 'total cost of ownership'. That includes an analysis of both production cost and of the value the contractor can add to the product, for example through innovation, design input or other services which benefit the customer. It is arguable that, the more sophisticated the product, the greater the case for keeping production in the UK.  It is noticeable that the manufacturing which has remained in the UK is generally higher technology and lower volume. These are the areas where collaboration between company and the subcontract manufacturer needs to be at its closest - areas where IP protection, close cultural match, common language and physical proximity are key to achieving customer satisfaction.

For some companies the promise of off-shoring has not necessarily lived up to expectations anyway.  Even the production cost savings may not have come to fruition, once customers took account of currency fluctuations, quality issues, high shipping costs, rework, or rapidly increasing labour costs and the soft costs of their own peoples involvement. And, in an era where corporate social responsibility is increasingly important to investors, off-shoring can also carry some ethical risks.  For example the issues of wage exploitation, Health & Safety and green aspirations may well be scrutinized by stakeholders.
In a recent bench marking exercise, the UK was cheaper than Poland and only 20% adrift of China. (Significantly down on the 50% of the early 2008) The latter does not include the soft costs.

There is now an emerging opportunity for UK-based companies and contract manufacturers such as Rimor, to stage something of a comeback, as more companies widen the criteria under which they properly compare the value of home-based and off-shore manufacturing for low to medium-volume work. Opportunities do exist in the UK market, but only for the right kind of added-value service.  It is hard to justify bringing home the traditional high-volume type of work but, provided that UK contractors are able to adapt to the demands of specific markets, there is certainly potential for growth in the sub contract manufacturing industry.