By Graham Mercer, MD of Glasgow-based Rearo, which specialises in the manufacture and supply of bathroom and kitchen surfaces for UK trade and retail markets
UNTIL recently, we were told, relationships in business were an unnecessary thing of the past. Globalisation meant seeking out the most cost-effective options anywhere in the world and modern methods of communication and logistics would do the rest.
At the touch of a computer keyboard, you could do business with anyone, anywhere in the world without ever having to meet them, and it would all be justified as long as the price was right. The supply chain was a cost to be managed, a process to be optimised, all I the name of ‘just-in-time’ efficiency.
The approach was not only short-sighted, it was also practically, commercially and wrong-headed and, while it has taken a global pandemic and a couple of wars to bring the world back to its senses, it has thankfully been confined to the dustbin of history.
If the last few years have taught us anything, it is human relationships are the foundation upon which a successful manufacturing business is built. Manage those relationships, cultivate them, and nurture them, and you can weather any storm. Ignore them, and you risk the integrity of your entire operation, regardless of how impressive your sales figures might look.
At Rearo, we have had this lesson reinforced time and time again, most notably as we navigated a world reshaped by geopolitical tensions and a shifting economic landscape. Our experience has led us to a single, fundamental conclusion – a safe, effective supply chain is not simply a logistical pipeline, it is a strategic asset that requires the same level of care, investment, and relationship management that we afford our most valuable customers.
The geopolitical wake-up call
Perhaps the most profound realisation came when the world changed in an instant. For years, our core raw material for many of our products was birch plywood sourced from Russia. It was a cost-effective, reliable resource but, when the invasion of Ukraine occurred and sanctions were imposed, we faced, not just a logistical challenge, but a profound ethical and strategic dilemma.
In seeking the right partner for the future, we looked to the west, forging a deeper, more strategic partnership with Medite Smartply in Ireland. We made a conscious decision to source FSC-certified, exterior grade MDF from sustainably managed forests, a move that aligned with our values and those of our customers.
By shortening our supply route from thousands to a few hundred miles, we achieved several objectives at once – reducing our carbon footprint, enhancing our resource efficiency, and building a more resilient, secure supply chain that is less susceptible to the unpredictable whims of geopolitical disruption.
Relationships, not transactions
Taking a proactive approach to supply chain management was the first step in ensuring responsible and sustainable growth for our company. We learned an important lesson, that supply chains are fundamentally about relationships, rather than simply transactions to be recorded on an invoice.
To ensure stability and a sustainable future, both have to be cultivated, developed, and nurtured. Meeting people face-to-face, forging long-term relationships with them, gaining and reinforcing their trust and respect will always be more important than seeking out the cheapest option.
We now actively audit our suppliers, asking questions across our multiple departments. It is a process of constant evaluation and feedback. Trusted suppliers like Medite know our business, they understand our quality demands, and we work closely with them on their production planning. This type of integrated partnership is a two-way street and so we routinely visit our suppliers, and we encourage them to visit us.
Our supply chain also includes partners like AlfaICA in India, whose owners we actively court and whose staff we ensure understand the Rearo brand and our requirements. We send our apprentices to those suppliers so they can see firsthand the value of the materials they will be using. This builds a mutual respect that transcends a simple price negotiation and fosters a level of cooperation that ensures continuity of supply, even in a volatile market.
The new industrial landscape and the resilience of ‘just-in-case’
The domestic manufacturing environment in the UK is a far cry from the predictable world it was a decade ago. Increasingly we see distributors destocking as a result of cash flow pressures, a trend that has forced us to question the reliability of traditional models. The online retail boom has also weakened traditional supply lines, encouraging manufacturers to go direct and bypass the distribution networks that were once a bedrock of the industry.
The concept of ‘just-in-time’ has been severely tested, and the ‘just-in-case’ model is the new reality, demanding that we hold more strategic stock and maintain close, communicative relationships with our suppliers. Only certain suppliers keep the volume of certain products which we need for our manufacturing processes and, if we hadn’t invested time in building relationships, we wouldn’t have known who could help us.
Technology plays a vital role in our industry, and we have made significant investment in new machines, including a new £100,000 beam saw which not only cuts boards faster, but has integrated software that links estimating directly to production, automating the process and eliminating the risk of manual error. This investment in automation and IT integration, including enhanced computer systems to manage stock across our network of depots, is about strengthening the entire operation and ensuring a more reliable supply to our customers.
Underpinning all of this is an ongoing commitment to our people. A supply chain is managed by people, and it is the people within it who build the relationships and drive the innovation.
A strategic, forward-thinking imperative
We are now actively targeting 100% growth in our commercial sales on the back of a strategy which recognises that our supply chain provides us with competitive advantage. This involves sharing knowledge and integrating our supply chain partners into our planning, as well as investing in the human and technological resources that underpin the whole system.
We understand that a safe and effective supply chain is a commercial necessity – a pathway to providing customers with the confidence that we can deliver, not just on price, but on reliability, quality, and sustainability. By nurturing our supply chain with the same care as our customer base, we are ensuring our own resilience and contributing to the stability of the entire UK manufacturing ecosystem.
In an unpredictable world, the cultivation of a strong, integrated, and relationship-driven supply chain is the only path to sustainable growth and long-term success.
