Contract Manufacturing
L-R Kevin Johnstone, Operations Manager, Danlers; Daniel French, Managing Director, Transonics; John Sharples, Managing Director, LPRS and Sandie Sharples, Customer Support Manager, LPRS
March of the manufacturers
While the economic news goes from bad to worse there remain numerous examples of UK manufacturers who have embraced innovative business practices that enable them to deliver quality products at competitive prices, as Neil Tyler finds out
W
ith the end of summer the economic news has become increasingly bleak. All the talk is
of a double-dip recession affecting not only the UK but Europe and the US, even star performers such as Germany have seen production slump and economic growth grind to a standstill over the past few months.
The UK has seen its manufacturing
sector, once the pivotal cog of the current economic recovery, falter and go into reverse. New orders have fallen back and employment has been cut as companies seek to reduce their costs.
No one doubts that the heightened uncertainty about the global economic outlook and the debt crisis in the Euro area are impacting on both confidence and spending but, despite that, manufacturing in the UK remains hugely important to the overall economy despite the commonly expressed views by rather too many commentators that it is in a kind of terminal decline. It’s a tough market but the talk of decline is overstated. The UK remains the sixth biggest manufacturer in the world and as a sector manufacturing contributes upwards of £160bn to the economy of which electronics accounts for around £25bn.
Manufacturing has changed markedly in 10 September 2011
the last ten years, whether that’s the nature of the supply chain or the working practices employed, but it’s not just about production or making finished goods. Manufacturing involves extensive research and development, marketing, distribution, service and support and companies that are looking to succeed need to think about and embrace more innovative business models - it’s all about a sustainable advantage that enables a company to meet the changing needs of its customers. UK manufacturers need to focus on technology and innovation in those areas that will help them develop and supply those products and services that their customers want, and many UK firms have established themselves as key players in the global supply chain making components, rather than the final product. Increasingly manufacturing firms are running complex business networks made up of research, production, marketing, logistics and service centres and in an increasingly competitive global environment their success will depend on investing in people and skills, innovation and creativity.
In terms of manufacturing talent Britain
still has real breadth and depth. Earlier this year I met with three companies that have embraced these
Components in Electronics
changes and have established a strikingly successful working relationship which has, and is, benefiting all three of them. Based in Oxfordshire LPRS designs and develops short range wireless devices while Transonics provides electronic component supply design solutions and programming services. Located in Chippenham, Wiltshire, Danlers is a contract manufacturer. What brought the three together was the fact that LPRS was looking to change the way it conducted business. According to John Sharples, LPRS’s managing director, ”Over the last two years we’d begun a process that has looked to transform how the business operates. We’ve worked hard focusing on developing our products and ditched a number that were no longer relevant. But we were also concerned at the way in which we conducted our business; we examined the whole cost base at LPRS and realised that we were too small to manage the whole design, manufacturing and distribution process. We’re a small operation and we found that the way in which we were working was just not efficient. We needed to focus on research and product development and find other companies capable of meeting our manufacturing and distribution requirements.
“We had to ensure that who ever we went with would be more efficient and deliver the levels of quality our customers had come to expect.” LPRS began its search in 2010 and started by looking at manufacturers in Poland, Lithuania, the Czech Republic and China as well as in the UK. “We were looking for a manufacturer who could take full responsibility for purchasing and from whom we’d be able to order the finished article. We would be simply supplying the bill of materials and focusing on R&D.” It proved a long and, to begin with, fruitless search. Sharples expected the Chinese to come back with the lowest quote but was amazed when it was little different from those he received from companies based in Europe and the UK. According to Kevin Johnstone, the operations manager at Danlers “The perception of China as a cheap place to manufacture is changing. Costs are increasing as their standards go up. They want volume and for those looking to source a few thousand products you wont get the kind of control that companies in the UK can offer. For the companies we deal with at Danlers they wouldn’t want to order thousands of products. Firstly they wouldn’t have the capacity to store them
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