Monday, July 15, 2013

Global Network And Manufacturing Businesses

Around thirty five years ago China's transformation towards being the world's supermarket began. Back then as today it was possible to command almost any price but finding the right factory with the right quality procedures and adequate testing facilities was and is a whole different ball game.

As the world has become ever more globalized so margins have become ever more squeezed and product prices ever more elastic. The rush to take advantage of world prices offered by China, India (and more recently the BRIC countries) is something akin to the California gold rush.

In 2013 100s, if not thousands, of businesses have taken the leap and moved all or most of their manufacturing overseas. Up and down the country purchasing managers and buyers are slapping each other on the back at the cost savings they have gained, or at least think they have gained.
Take a walk down the hall to quality or supply and the story may not be so rosy. One may even witness the air turn blue as the quality guy inspects yet another reject, trusted spectrometer in hand. All was well at sample stage so what went wrong. Well self regulation never did and never will work. Quality teams, on the ground in the manufacturing country, carrying out regular in process inspections, is essential to ensuring quality is consistent.

Setting up an office in the host country is one option but the cost and timescales for doing so will be prohibitive to anything but log term cost savings. In the short to medium term increased costs and reduced margins are the more likely outcome.

However a network of highly vetted factories, regularly inspected by qualified engineers, can be the answer. Sourcing high quality products at world prices is the modern day global challenge.

The challenge is not just a global one but also an internal one that can very easily lid to organizational conflict, if not handled correctly. In many companies purchasing, accounts and logistics work in splendid isolation. All working according to their own KPI's with no over reaching solution for tracking project costs.The result is the supply chain becomes fragmented.
What is needed is someone with an eye on everything and a foot in every camp. Often this challenging role is left to the hapless product manager, who cuts his own throat no matter what decision he makes and so makes non. The product manager becomes a professional politician of such cunning as to put Downing Street to shame. So the solution becomes to outsource everything to a third party.

Maxim Industries Ltd use an established network of factories around the world to source products, components and sub assemblies for manufacturing businesses across Europe and the USA. With ISO accredited quality procedures in place.

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