• James Abbott

The Advantages of Using Australian CNC Machining Services in 2021

Relying on overseas CNC machined parts suppliers makes a company extremely vulnerable. According to EY research (2021), 60% of executives say the COVID pandemic has increased their supply chain’s strategic importance. Apart from drastic COVID related shocks, other risks exist when outsourcing manufacturing to a foreign country. This article will shine some light on the disadvantages of outsourcing CNC machining services, as compared to the numerous advantages of manufacturing in Australia.

7 Advantages of Manufacturing Locally

Listed below are 7 of the more tangible benefits to sourcing CNC machining services in Australia:

1. Communication

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. If the country is English speaking there is still the issue of a mismatch in time zones. While 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 manufacturer that not only understands your need for urgency but is also capable of executing the work in a timely fashion. When using a foreign manufacturer there are very real risks of parts arriving late due to a long and complex logistical chain and the unknown delays and blockages due to COVID. The manufacturer may be able to complete your parts in their workshop in record 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 from the rest of the world.

3. IP protection

The protection of your intellectual property 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 unintentionally. A locally based manufacturer will not take the risk of leaking confidential information as this will ruin their reputation. 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, 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 from where you can’t pop in for a quick visit if you are unhappy or concerned about something.

5. Price

One of the major advantages of manufacturing abroad, especially in Asia, has been the cost. Due to economies of scale, they could beat most of the world when it came to per-unit cost. This is not set to continue, the producer-price index of China grew at its fastest pace in nearly 13 years in May 2021, up 12% (Wall St Journal). Plus, if you are manufacturing large quantities of CNC parts, then the shipping cost begins to substantially eat into any savings, especially in these times of COVID. Freighting heavy metal parts is not very cost-efficient, and this is a very good reason to think of finding a local manufacturer.

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.

7. Economic Growth

Australia’s manufacturing economy is already in decline. Supporting local businesses has two main advantages. The first is that using local manufactures creates jobs. Studies predictably show a direct correlation between sales and job growth/job retention. Secondly, using local manufacturers circulates money locally, creating further advantages for the local economy.

Where will you manufacture?

It should be quite clear from the 7 points above that manufacturing locally is the only way to remain in control of the manufacturing process and reduce the risks caused by the pandemic. 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 is worth. Furthermore, by investing in 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 100% Australian owned and operated. Based in Sydney, we CNC machine custom metal and plastic components for businesses throughout Australia. Contact us or complete our Request For Quote form.

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