Building a New Industry from Scratch — Reshoring Train Toilet Manufacturing
Executive Summary
This case study examines how Xiaoyu Group helped create a new domestic manufacturing capability for train toilet systems in the UK, where previously none existed. Using our Business Transformation Platform as the key enabler, we orchestrated a cluster of local SMEs with complementary capabilities to successfully bid for and deliver train toilet modules to Network Rail. This innovative approach not only solved an immediate supply chain vulnerability but established a new industrial sector, reduced dependence on foreign suppliers, and created a repeatable model for reshoring critical components. The project demonstrates how competence-led transformation can address national capability gaps and create sustainable economic value through strategic orchestration rather than traditional manufacturing ownership.
Problem: A Nation with Trains, But No Toilets
The UK's rail industry faced an unlikely but pressing challenge: although it operated one of the world's most advanced train networks, it had no domestic capability to manufacture train toilet modules.
- 100% of train toilet units were imported—primarily from Germany.
- This over-reliance introduced logistical delays, inflated costs, andstrategic vulnerabilities, especially under the pressures of Brexit, global pandemics, and geopolitical uncertainty.
- Network Rail's attempt to source locally revealed a sobering truth: no UK manufacturer produced complete train toilet systems.
This wasn't just a supply chain issue — it was a national capability gap that exposed the UK to significant risks in maintaining critical infrastructure.
Solution: Competence-Led Industrial Reinvention — Enabled by Xiaoyu Group
Instead of searching for a manufacturer that didn't exist, Xiaoyu Group approached the problem differently—through our Business Transformation Platform.
We reframed the issue by asking:
"What capabilities are required to build a train toilet—and who already has them?"
Phase 1: Competency Mapping — What Makes a Toilet?
Our platform deconstructed the product into its core technical components:
- CNC cutting and forming of plastics and metals
- Precision wiring and safe electrical integration
- Custom plumbing and confined-space design
- Injection molding, sealing, and structural assembly
While no single company could deliver the full product, many SMEs within a 25-mile radius of Birmingham held one or more of the necessary competencies.
Phase 2: Orchestrating the Cluster
Using the Business Transformation Platform, we:
- Identified and validated suppliers based on capability fit
- Designed a collaborative delivery model
- Took the lead on the bid submission to Network Rail
Though Xiaoyu Group owned no manufacturing assets, we acted as the orchestrator, ensuring cohesion across design, production, logistics, and final delivery.
Result: We won the tender—without producing a single part ourselves.
Phase 3: From One Project to a New Sector
Success with the first order catalyzed the formation of a UK-based industrial cluster focused on high-spec modular systems for rail infrastructure. The impact expanded:
- Follow-on contracts for additional modules
- New jobs and industrial revenue streams
- A repeatable model for reshoring critical components
Outcome: Reshoring, Reinvented
Through Xiaoyu Group's platform and leadership, we helped the UK do far more than localize a product—wecreated a new national capability.
| Area | Impact |
|---|---|
| National Resilience | Reduced dependence on foreign suppliers for critical rail infrastructure |
| SME Empowerment | Activated a high-value supply chain across multiple local businesses |
| Platform Model | Validated an asset-light orchestration approach (no need to "own" the means of production) |
| Sustainability | Reduced emissions tied to long-distance shipping |
| Long-Term Growth | Enabled a scalable, modular manufacturing ecosystem for rail and beyond |
How Xiaoyu Group Helped
Xiaoyu Group provided the strategic capabilities that made this transformation possible:
| Capability | Contribution |
|---|---|
| Competency Mapping | Identified latent capabilities in the local ecosystem |
| Cluster Orchestration | Formed and managed a working consortium of SMEs |
| Bid Strategy | Led a successful tender submission with Network Rail |
| Platform Tools | Provided project governance and delivery mechanisms through our Business Transformation Platform |
| Industry Formation | Turned a gap into a scalable business model for future reshoring efforts |
Key Learnings
This case study demonstrates the power of competence-led transformation in addressing critical national capability gaps:
- Capability-First Thinking: By focusing on capabilities rather than existing products or companies, we were able to identify solutions where none appeared to exist.
- Orchestration Over Ownership: The Business Transformation Platform enabled effective coordination of multiple specialized companies without requiring capital-intensive vertical integration.
- Strategic Reshoring: Manufacturing repatriation is most successful when it combines innovation with strategic capability development, rather than simply recreating existing supply chains.
- Collective Capability: Manufacturing clusters can leverage collective expertise to create innovations and achieve scale that no single company could develop alone, making reshoring economically viable.
- Geopolitical Resilience: In an era of increasing global uncertainty, domestic manufacturing capabilities for critical infrastructure components provide strategic national resilience.
"We didn't just localise production — we created production. This case demonstrates the power of competence-led transformation. When no single supplier could solve the problem, Xiaoyu Group built the system that could—redefining what it means to manufacture in the UK."— Dr. Thomas Wright, Cluster Coordinator, UK Rail Manufacturing Alliance
Long-term Impact
Three years after the initial project, the impact continues to expand:
- The cluster has expanded its reshoring initiatives to five additional train subsystems, further reducing dependency on potentially vulnerable global supply chains.
- The Business Transformation Platform has been adopted by three additional UK manufacturing clusters seeking to replicate the successful reshoring model.
- The UK government has recognized the project as a case study in successful strategic reshoring and has incorporated elements of the approach into national manufacturing policy.
- The collaborative model has been extended to include academic partners, creating a sustainable innovation ecosystem that continues to strengthen UK manufacturing capabilities.
- Network Rail has committed to a long-term procurement strategy that prioritizes domestically-produced components, creating a stable market for the new manufacturing cluster.
This case demonstrates how the Business Transformation Platform can address not just product performance challenges but also broader strategic imperatives of reshoring critical manufacturing capabilities in an era of global decoupling and geopolitical uncertainty.