THE IRON LADY WAS NOT FOR TURNING BUT TEESIDE STEEL SENDS SUPPLY CHAIN INTO REVERSE

A few weeks ago, we floated the idea that it might be time to return manufacturing to the UK, especially for consumption in the local market. This might be considered prophetic as steel making returns to Teeside this week; however even at BlueBridge One we are not quite that good…

…it turns out that the steel manufactured at Redcar steelworks by plant owner SSI UK is not for consumption in the local market, it is destined for export and consumption by the Thai automotive industry. The return of a heavy industry such as steel making to the UK is truly momentous and somewhat unanticipated. It is doubtful that the plant’s former owners, India’s steel giant Tata, saw the potential for this flip of the market when mothballing the plant 2 years ago. It transpires that Thai parent company and largest steel producer in Southeast Asia, SSI, acquired the plant at a good price.

This turns one of the phenomena that has characterised globalisation on its head – the shift of manufacturing from the developed economies of Europe and North America to the lower labour cost tiger economies of Asia-Pacific. The clear inference from this development is that it is cheaper to make steel in Europe and ship it to Asia-Pacific; if we follow this to its logical conclusion it may even signal that Asia-Pacific labour costs are approaching parity with Europe.

This really shows the need for a NetSuite cloud-based ERP solution that provides real time analysis and business intelligence from across the supply chain. Custom fitted by BlueBridge One, NetSuite enables control and mastery of supply side issues. The return of production to Redcar steelworks is a large enterprise level event; however who knows when the trickle down effect is going to hit wholesale distribution and we see mid-market manufacturing return to Europe as well?

If you want the full picture of what is happening across your supply chain so that you can master supply side issues and make better strategic decisions for your business, click here, register, and let BlueBridge One show you the possibilities with a 14-day FREE trial of NetSuite.