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Contract Manufacturing

and often it would prove very difficult and expensive to source the raw materials. UK manufacturers can offer much greater flexibility and there’s a real opportunity for UK based companies to step in here and exploit that need.”

“China is no longer the default answer, as we found, it is far more challenging in many different ways than it used to be,” concurs Sharples. Daniel French, Transonics’ managing

director, adds “There’s been a growing move away from China that has been going on for several years. If UK manufacturers are able to limit the labour content then the costs of doing business in the UK aren’t significantly different from those in China and we’re able to compete.”

So as Sharples explains, “At the end of last year it looked like we’d select a manufacturer from Eastern Europe. We’ve worked with companies from there in the past and there are a lot of attractions in doing so; quality, price and the ease of doing business are all significant pluses. However, I decided to hold off making a decision until early 2011.”

It was while Sharples was attending

Southern Manufacturing in February that he had his eyes opened to the possibility of retaining both procurement and manufacturing in the UK.

“The show was certainly an eye-opener for me. There were so many UK companies present and awful lot wanted to do business with us.” LPRS met with Transonics who were able to provide them with the logistics and greater flexibility they were looking for in sourcing components. They also had an

A pro-active relationship The relationship between the three companies is very pro-active. Not only have they been able to contain costs at a time when in-put prices have been rising significantly but they have also developed a very close working relationship. For a company like LPRS operating in an

extremely competitive environment the benefits of the arrangement have been striking, as Sandie Sharples, LPRS’s Customer Support Manager explains.

exceptionally close working relationship with the contract manufacturer Danlers, who would be able to produce the modules LPRS needed. For LPRS the decision to restructure the business using the skills and experience of both companies paid off almost immediately and the company was able to focus on what they did best - innovation. However, it was the massive earthquake that hit Japan in March and which disrupted supply lines for electronics companies all around the world that helped to highlight the benefits associated with the new agreement, especially LPRS relationship with Transonics. “In hindsight I wish we’d signed the

agreement three to six months earlier. Transonics’ knowledge of the market and their access to a host of different suppliers helped us to contain costs and maintain supplies, they were even able to suggest alternative components for our devices. We’d never had that kind of access to resources or the capabilities of researching the market in the way that they have been able to demonstrate over the last few months,” Sharples explains.

“Working with both of these companies, we’ve been able to access a range of functions and services that would have been beyond our reach a year ago. It’s transformed the business. Turnover has soared and we’ve been able to improve all our processes. Working with these companies as closely as we have has meant that we’ve had to look in detail at everything we do.” As French explains, ”Large or small when dealing with customers the rules are much the same. If there are problems we keep the client informed. If there are supply problems we seek out alternatives and provide key technical support, but everything is dependent on getting the sign-off from the customer.” “For this type of relationship to work it has to be about keeping lines of communication open,” Sharples suggests. “Tranonics are very open as are Danlers. Alternative suppliers and manufacturers were available to us but on meeting both these companies we had real confidence in them, in their people and in their ability to address problems as and when they arose.” Before signing any contract LPRS were invited to meet staff at both companies. For French it was vital that the company met the people who would be working in the background, controlling the systems and processes used to manage the flow of components.

Sharples met Danlers at the Southern Show and instinctively felt that they would be able to work well together. “I met Kevin at Southern and knew we’d be on the same wavelength,” says Sharples.

Johnstone believes the Danlers’ success is based on its “Open and honest approach. We know that it’s not just LPRS we’re working with but their end customers too. For me the key to a smooth and effective working relationship is transparency combined with being able to offer flexibility. We can re-tool our production lines in around 20 minutes which gives us the flexibility customers in the UK are looking for and helps to keep costs down.

“My CEO has always maintained that UK manufacturing can compete internationally. The keys are efficient processes, effective cost management and good quality. We may not be able to compete on unit price but we certainly can on quality and I think post recession that has become far more important. Customers like LPRS also want to be able to feel that they are in control which isn’t always the case when dealing with suppliers who are based thousands of miles away in the Far East.”

“I do think people have forgotten how good we are at manufacturing in the UK,” Sharples concludes, “and we have a tendency to be very reserved about our successes, but perhaps that is beginning to change.” n

Neil Tyler met with John Sharples, managing director of LPRS; Sandie Sharples, customer support manager at LPRS; Daniel French, the managing director of Transonics and Danlers’ operations manager, Kevin Johnstone

Components in Electronics

September 2011 11

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