Have you considered all the risks of buying foreign made parts? How much control do you really have over your IP and quality? Are you willing to bet your personal reputation on a foreign supplier where you are just another number?
Buying Australian made parts means: better communication, tight lead times and simple logistics, the protection of your intellectual property, easy customer support, local freight prices and guaranteed product quality.
One of the first steps to bringing a new product to market is selecting the CNC manufacturer. This is an extremely important part of the process as shortcuts can not only damage your bottom line but also ruin your reputation.
The risks involved are further compounded when outsourcing manufacturing to a foreign country. This article will shine some light on the disadvantages of outsourcing manufacturing, as compared to the numerous advantages of manufacturing locally in Australia.
6 Advantages of Manufacturing Locally
Listed below are 6 of the more tangible benefits to manufacturing locally in Australia.
At the start of any manufacturing project, it’s critical to iron out any potential stumbling blocks with your manufacturer. There are many challenges when manufacturing complex parts. Some examples of this are unclear drawings or material specifications that must be clarified.
If manufacturing in a non-English speaking foreign country, the language barrier makes communication difficult. The technical nature of the communication makes it even harder to get the point across.
Such poor communication can be evidenced in the sales emails, social media requests, and websites of these foreign manufacturers. If this is problematic, imagine trying to translate or clarify a technical matter.
Even if the country of manufacture is English speaking there is still the issue of a mismatch in time zones. Whilst this is a surmountable issue, it only complicates matters and is unnecessary. Manufacturing locally in Australia eliminates these problems completely.
2. Lead Time and Logistics
The very nature of product development is time critical. Time is often constrained, and there is very little room for delays. As such, it is critical to partner with a local manufacturer that not only understands your need for urgency but is also capable of executing the work in a timely fashion.
Plus, once you have established an ongoing relationship with a local supplier, they will often hold spare parts for you in case you have an urgent need. This will make your customers happy and hence boost your reputation in your marketplace.
When using a foreign manufacturer there are very real risks of parts arriving late due to a long and complex logistical chain. The manufacturer may be able to complete your parts in their workshop in time, but that doesn’t mean that the rest of the delivery will follow that trend. This is especially true due to Australia’s relative isolation to the rest of the world.
3. Intellectual Property (IP) Protection
The protection of your intellectual property (IP) is incredibly important to maintain your market edge. The investment into IP development is often substantial and anyone who gains unauthorised access to your IP can bring it to market without having to invest in development.
With foreign markets, it’s difficult to control the distribution of your IP and to prove that the information was leaked intentionally. A locally based manufacturer will not take the risk of leaking confidential information as this will ruin their reputation. At Challenge Engineering, for example, we sign up to mandatory confidentiality agreements for most of our customers. Foreign manufacturers are insulated from this by sheer distance.
4. Customer Support
This is perhaps one of the key factors contributing to frustration in the manufacturing process. Good service is the difference between a seamless and efficient production run and a chaotic and nightmarish one. Simple things like timely feedback on current progress, to quick responses to queries about quality make a vast difference and help grow long term relationships.
It is near impossible to build a strong relationship with your manufacturer if they are 5000 km away where you can’t pop in for a quick visit if you need to discuss design changes, review quality or are concerned about production.
One of the blinding attractions of manufacturing abroad, especially in Asia, can be the quoted price of the parts. Companies in Asia are situated close to major raw material processors and can be heavily government subsidised.
But beware! Do your due diligence. Make sure you are comparing apples with apples. There are hidden costs that get added in later.
Check the quality of the raw materials. There are different grades of stainless steel for example, some of which are no longer available in Australia due to their poor durability. Poor quality will mean increased costs and reputational damage for your company.
If you send or employ someone on the ground in the foreign country to check the quality and manage the run, this will cost you.
If you are buying large quantities of CNC parts for example, then the shipping cost begins to substantially eat in to any savings. Freighting heavy metal parts is not very cost efficient, and this is a very good reason to think of finding a local manufacturer.
If your parts are not right, will you be able to ship them back and get a refund? Not so easy. Will you have to pay for the return freight? How quickly will you get your replacement parts? Costly.
You will be surprised just how competitive Australian Manufacturing is today. Efficiency gains are constantly being made via Lean Manufacturing and advanced technology. In addition, your local CNC machining company can typically reduce its price the bigger the quantity you order. Plus, maybe paying just a little extra is worth it for peace of mind.
6. Product Quality
Quality control is a critical part of a manufacturing cycle. If a proper quality control plan is not implemented, errors and defects can slip through production and the defects can find their way into your products. Depending on the nature of your product, it can at least cost you your reputation and at worst, cost someone’s life.
It is easier to keep a finger on quality if the manufacturer is locally based. It is also challenging to control the materials used on your project when you cannot perform material verification prior to manufacture. It is quite possible you will receive parts that have the incorrect material specification.
When manufacturing locally, it is easy to prove a materials’ composition via a material certificate but getting hold of this from a foreign supplier might prove difficult and you can’t be sure of its authenticity.
See this Australian case study, click here. A cheap foreign made part cost this glass manufacturing company thousands when its production line went down.
So where will you manufacture?
It should be quite clear from the 6 points above that manufacturing locally is the only way to remain in control of the manufacturing process. Once you send your drawings and IP overseas, all bets are off. Any number of things can and do go wrong.
Outsourcing your components to Asia, Europe or the United states involves more risk than what it's worth. Furthermore, by investing into the local economy, you do your part in building a stronger and robust Australia that is increasingly insulated from fluctuations in world markets.
Challenge Engineering is an ISO 9001:2015 certified CNC machining company based in Sydney, Australia. We manufacture parts for large rail companies. To find out more visit www.challengecnc.com.au.