From Lloyd's Loading List, 19th March 2012
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After just one shipment, Edinburgh-based company Safetray Products decided to stop manufacturing its trays in China. CEO Alison Grieve talks to Isabel Lesto about how this small business made a big change.
Why did you switch manufacturing from China to Scotland?
At Christmas 2010 we received our first shipment from China. The 4,000 trays that arrived in the UK were unusable: it was heartbreaking. We managed to get the stock remade to specification, but we had to fly to China to sort this out. Quality control in China is really difficult; it is so expensive because there is such a big demand for this type of service.
Besides this, lead times are longer and paying duty upfront is more difficult for cashflow.
We are now manufacturing with the family-run business McLaren Plastics here in Scotland for the same price. We can control shipments more easily from the UK, and customs procedures are much more straightforward.
How easy have you found this shift?
Transferring manufacturing to the UK has not been easy. We had to modify the [tray-making] tool for use here; unfortunately when it was on the water from China, the tool manufacturer we had chosen in Stirling went out of business and we had to find another one. The one we found is excellent but further away in Yorkshire so we have had to go backwards and forwards quite a bit.
What changes have you had to make to the supply chain?
With production shifting back to the UK we've tightened up our supply chain. We've brought in a new member of staff to manager this, and we've just selected TPC Freight Management as our new forwarder. We had four bidders. We chose them because they've been so helpful; if they can communicate well at this stage, then I know that in the future I'm not going to have some shipment sitting at a port for four days without being told about it.
The company is big enough to matter but small enough to care. They make us feel special.
What logistics tips have you learned along the way?
Regardless of who manages the supply chain we are ensuring that we know who the contact person is for each step along the chain.
In a small business, what logistics hurdles have you faced?
There are certain things I haven't understood because I've been told completely different things by different people - and when it comes to shipping, the devil's in the detail. It annoys me that there is an inability to get exact information, because exact information is necessary in export.
What is your strategy going forward?
Plan A is to manufacture in Scotland and export to the US, Europe and the UAE. We have had interest in South America and Canada. We're paying double duty right now in Canada so it's more a marketing exercise than profit-making. With South America we will probably get a distributor in Miami who will then take charge of distribution. Australasia is a market we have not pushed for but from which we have had a lot of interest, and with the strong [dollar] exchange rate this is an interesting market.