Low Cost Manufacturing

Moving production to Central and Eastern Europe can be a great way to reduce manufacturing costs. We’re experts in these areas of Europe, and help clients achieve cost savings, but we also know that simply pursuing a lower labour cost may not deliver the savings you’re looking for.

Manufacturing your products in Central and Eastern Europe should be considered as part of an overall strategy. As manufacturing consultants, we can help you formulate a plan and put it into action.

Before moving, it’s essential to evaluate the following options:

Make a radical productivity change in your current facilities 

All manufacturing companies should be looking to manufacture at the ‘least cost’. Before considering moving to a lower-cost location, we strongly recommend a thorough review of your current manufacturing setup. Look at how the existing facilities & processes can be optimised to deliver a step change in productivity and therefore manufacturing cost reduction.

Once the existing processes have been optimised, opportunities for automation can be studied. Together, optimisation & automation are often the fastest and least costly route to reduce manufacturing costs.

Sub-contract labour-intensive activities to reduce costs

Another alternative to complete relocation is to look at sub-contacting labour-intensive activities to lower cost locations. This can be a faster and cheaper way of establishing a low-cost manufacturing base, without the expense & complexity of establishing your own company in a new country. To be successful, deliver real cost savings and maintain customer service, the project needs careful evaluation, management and risk mitigation strategies.

Create new locations to improve customer service

Moving location to improve customer service can be crucial. As an example, Brexit negotiations may result in added complexity and cost for customers. Options for UK manufacturers to consider include moving elements of the manufacturing, supply chain, stock or services into the EU zone and therefore making things easier for customers. We call this a ‘blended solution’.

For example, keep ‘high tech’, automated manufacturing and engineering in the current location, but have a warehouse and service centre close to the client, within the EU. This makes working with you easy, and less risky, for your customers.

Move location to support your customer

Many industries have migrated as economies have developed. In Europe, an obvious example is the automotive industry that has moved extensively into Central & Eastern Europe. To maintain high levels of service, suppliers are often required to follow their customers. This may mean moving the complete manufacturing process, elements of it, or having suitable stock and service close to the customer to provide the desired service level.

There can be good reasons to move location, but also risks and unanticipated outcomes. The options of radically improving the current plant, a ‘blended solution, or sub-contracting should also be considered. We can help you evaluate these options and scenarios.

Contact IngPro Limited

If you are under cost pressure or need to radically improve your manufacturing operations to deliver better customer service, contact us. We can guide you through the options and help you create the best model for your business.