Stimulating investments in manufacturing: can policy create supply chains from a void?

Abstract

Purpose

The purpose of this paper is to evaluate the effectiveness of a policy, the 2014 UK Supply Chain Plan, which aimed to create a local supply chain in a sector (offshore wind) where the central manufacturing node capabilities and knowledge are not possessed locally. It aims to address the following question: can policy create a new manufacturing supply chain from a void?

Design/methodology/approach

A qualitative field research approach is used to derive an original set of theoretical propositions explaining the motivation behind the Supply Chain Plan policy. The outcomes of this policy are examined 10 years later in order to provide an opportunity to observe the impact of the policy.

Findings

The conclusion is that the policy has been successful in increasing local content, and some of that local content has benefited local manufacturers. However, a lot of the increase in local content has been achieved in non-manufacturing areas or in new areas. The main issue, i.e. the lack of a central manufacturing capability, remains unaddressed. The impact of the local content policy on cost is undocumented.

Originality/value

There is an increasing amount of interest in regional/local supply chains after the COVID-19 pandemic and increasing geopolitical tensions. This paper's originality is to document with an industry case study the fact that manufacturing knowledge and capabilities are the central growth engine of supply chains and that creating a new manufacturing supply chain competing with well-established clusters is not a simple matter that can be achieved through a local content policy. Such policies raise critical questions about the policy makers' implicit valuation of manufacturing technology.