FEATURE CONTRACT MANUFACTURING
Is your CEM structured to deliver best service at a competitive price?
Paul Deehan CEO at AWS Group explores how manufacturing opportunities in Eastern Europe are giving East Asian counterparts a run for their money in the wake of industry 4.0
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all it Industry 4.0, Smart Factory or just straightforward Industrial Automation,
there is no doubt that manufacturing is getting much more clever. There are many factors driving this trend: continual price pressure; the demand for very high reliability which necessitates high levels of automation; design complexity and miniaturisation; legislation – for these reasons and others, CEMs are having to look very carefully at their operations to ensure that they are equipped to deliver the quality of service that customers require. Another challenge – which is also an opportunity - that European CEMs are experiencing concerns where a product is to be made? Some while ago, volume manufacture of consumer goods went East, to China, Korea, Taiwan or similar. This seemed to make good business sense and for very high volumes, with low to medium technology content and low mix business it probably is the obvious choice. But having your manufacturing based half a world away can cause problems as even the biggest companies have found out, and if you are selling hi-rel, latest-technology products into demanding industries such as defence, automotive, medical, then the ability to liaise with your producer in real time and in the same language, and to be able to arrange a short-notice visit without the hassle of obtaining visas and spending a day on an aeroplane is very appealing. So then, local or at least European
manufacture starts to look more attractive again – but only if you can identify a supplier with the right set-up. This was the thinking behind the decision that AWS took over the last 18 months, which saw the company
18 FEBRUARY 2015 | ELECTRONICS
consolidate its UK manufacturing sites and expand its facility in Slovakia. The company’s main 48,000 ft² plant at
Newcastle under Lyme now provides fast- track NPI turnaround to customers and complete through life product support (MRO), as well as box build, surface-mount PCB technology, cable and harness assembly and conventional assembly. The aim was to focus on core competencies and concentrate key capabilities within one dedicated UK site to provide the best possible product and service levels to customers while maintaining competitive pricing structures.
SPECIALIST SKILLS AND EXPERTISE AWS retained all the specialist skills in what is often legacy and experience-driven work and can now show customers full end-to-end capabilities in one place. This change also enables senior management to focus solely on customers, rather than dissipating effort on the management of multiple and dispersed plants. At the same time, the company has responded
to a significant increase in business at its offshore plant in Slovakia by investing in expanding its capabilities there. Over the last two years, the total investment has amounted to more than £2m, and the company now boasts parallel high-tech production capabilities and a workforce of 160 employees in a purpose-built plant. Costs in Slovakia are now comparable with
S.E. Asia, and, as global dynamics change, some customers are taking advantage of such competitive prices to re-shore contracts from Asia to Slovakia, as its proximity to European markets brings supply chain and other benefits.
Figure 1:
AWS manufactures technically complex products and has
customers across a wide range of market sectors
AWS manufactures technically complex products and has customers across a wide range of market sectors. It is one of very few European EMS suppliers to hold ISO 9001 (2000) AS/EN 9100, NADCAP, ISO 14001 and Silver ADS SC21 status for supply chain excellence. Expansion of the company’s facility in Slovakia has been driven by its ability to meet demanding standards while maintaining highly competitive pricing. The upturn in business AWS has experienced has come from two sources: existing customers moving all or part of their work streams to Slovakia to benefit from lower costs, and a number of brand new customers from around the globe placing work in the facility, including a certain amount of re-shoring from S.E Asia into CEE. AWS predicts that the trend for re-shoring or dual sourcing with a presence in CEE will continue over the next few years. In order to maximise efficiency in all business activities, AWS has developed its own group-wide fully automated, standardised enterprise resource planning (ERP) system which covers all functions from quotes to contract reviews and manufacturing. The ERP system reports data electronically, ensuring all stages of the manufacturing process is controlled right from goods inwards to despatch. Most recently the company has installed a
real time version of this at its UK manufacturing plant in Newcastle-under- Lyme. The £50,000 bespoke ERP system enables the company to monitor activities and provide immediate feedback to customers concerning their orders. It is now being trialled live in the UK before it is rolled out company- wide to include the company’s Slovakian facility which – in every other respect – mirrors the Newcastle-under-Lyme factory. CRM is nothing new, but as we enter the era of the Smart factory – or Industry 4.0 – CEM companies must measure their manufacturing performance in real time, at all process stages and on all machines, then integrate the data that is provided within its business environment to ensure that they have the right people, materials and resources in place to be able to meet the needs of their customers. But if CEMs can accept this challenge and structure themselves appropriately, then they need not fear competition originating from supposedly low cost regions.
AWS Group
www.awselectronicsgroup.com 07894134241
Enter 204 / ELECTRONICS
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