UK Manufacturing vs. Overseas Manufacturing: Pros, Cons, and Key Considerations

Deciding between UK and overseas manufacturing? Learn about the pros and cons of each, from cost differences and quality control to shipping times and labor practices. Make an informed choice for your business.

When it comes to choosing a manufacturer for your product, the biggest decision you will have to make is whether you choose a UK manufacturer, or an overseas manufacturer. Both have their own set of advantages and disadvantages, the costs associated with each will be different, as will their turnaround time, quality control and capacity for work. Before you start to think about where you would like your manufacturing company to be bases you should think about what is important to you. Some companies will base their decision on price, others value communication, and some might favour quality control over price. Knowing your budget and your preferences will help you to choose between a UK manufacturing company and an overseas company, as will knowing the difference and the pros and cons of the two.

UK Manufacturing companies

The UK is the 8^th largest manufacturing nation in the world, according to a 2023 report by Make UK. The UK Manufacturing sector accounts for £224 Billion of output, employing 2.6 million people in the UK, raising the UK from 9^th place to 8^th place in global manufacturing rankings. The UK’s biggest manufacturing companies include:

• Rio Tinto: a manufacturer of metals, who account for £50,55 Billion per year
• Unilever: a Food, Household and Personal Care manufacturer with £43,91 Billion in revenue per year
• GlaxoSmithKline: a Pharmaceuticals manufacturing company with £34.11 Billion per year
• Anglo American: a manufacturer of metals with £33,08 Billion per year in revenue
• Imperial Tobacco Group: a tobacco manufacturer with a revenue of £32.56 Billion per year

The pros and cons of choosing a UK manufacturer

As with everything, there are both advantages and disadvantages to choosing a UK manufacturing company. You’ll need to familiarise yourself with both of these in order to decide between a UK or an overseas manufacturer.

Advantages

Some of the advantages of choosing a UK manufacturer include:

• Quality: UK manufacturers are known for their quality and fair labour practices.
• Communication: it is easier for UK manufacturers to communicate with you and suppliers, they are able to resolve problems quicker and receive samples and materials quicker.
• Control: you and the manufacturer have better control over the manufacturing process, quality is more closely monitored and issues are resolved quicker and easier.
• Supply chain: as materials and products don’t need to be imported, there is less risk in the supply chain and therefore less interference in your products being made.
• Transparency: all UK manufacturers must adhere to the industry standards and health and safety regulations, whereas overseas manufacturers don’t have these same standards, which could impact the quality of your product.
• Turnaround: production of your products is quicker in the UK because you don’t have to wait for lengthy shipping times.
• Delivery costs: as there is no need to import the finished product, delivery costs are kept to a minimum and there is no need to worry about issues or costs due to customs.

Disadvantages

The disadvantages of using a UK manufacturer include:

• Costs: the costs for a UK manufacturer may be higher than an overseas manufacturer, due to things like to fair labour practices.
• Economic uncertainty: due to changes in the industry there may be some economic uncertainty in the manufacturing industry.
• Environmental regulations: with the net-zero emissions goal, there may be some new challenges arising in the UK manufacturing industry.
• Skills shortage: unfortunately, when compared to other countries, the UK has a shortage in skilled labourers, which might mean some manufacturing companies aren’t equipped to make innovative designs that break the mould.
• Technology: there are technological changes in the industry which could impact the competitiveness of the UK manufacturing industry, with other countries being more technologically advanced and therefore able to create designs quicker and cheaper.

The pros and cons of choosing an overseas manufacturer

As with the UK manufacturing companies, there are advantages and disadvantages to using overseas manufacturing companies too, let’s take a look at those here:

Advantages

Here are some of the advantages of oversees manufacturers:

• Lower labour costs: labour costs overseas can be much cheaper than in the UK. For example, in China, labour costs are up to one third of the cost, in Mexico labour costs are up to one eighth, and in Vietnam and Thailand the labour costs are up to one tenth of the cost of UK labour costs. The lower labour costs can dramatically impact the price you pay for your product.
• High-volume capacity: overseas manufacturers tend to have a high-volume capacity, producing large quantities in a short period of time. This means you may be able to save money with volume discounts, as well as lower costs on raw materials.
• Large number of manufacturers: countries such as China are large manufacturing companies, which gives you a lot of option as to which manufacturing company you would like to work with.
• Location: sometimes overseas manufacturing companies are closer to where raw materials and components come from, which can dramatically increase time-to-market.
• Skilled workers: other countries have a higher volume of skilled labourers and are actively training people to become a skilled/talented worker. This means they are more likely to be able to create your product as you envision it, regardless of how innovative or different it might be.

Disadvantages

Here are the disadvantages of oversees manufacturers:

• Higher shipping: when your product is made in another country you’ll need to pay a higher shipping cost to have it imported to the UK, this may also lead to other tariffs and fees.
• Longer shipping time: as well as it costing more to ship to the UK, you’ll also have to wait longer to receive it, especially if any problems arise at customs that delay it arriving in the UK and being transported to you.
• Barriers: there may be some language and cultural barriers that cause difficulties in communicating, this may impact on negotiation and problem-solving when issues arise.
• Oversight: as the factory is in another country you won’t be able to oversee or personally check on the manufacturing process yourself, and manufacturing companies in other countries may not have the quality control processes a UK factory does. This could impact on the quality of the product.
• Custom service: if something goes wrong, such as you receive a product that is sub-par in quality, or missing items in a delivery, for example, you may find that customer service and resolving these issues is more problematic with an oversees manufacturing company.
• Safety and risks: factories in other countries don’t have the same rules and regulations as we do in the UK. This could mean that your product doesn’t conform to UK regulations. It might also mean that environmental impact and employee safety is lower than it would be in the UK.