Outsourcing experience smooths economic bumps

Huntingdon, April 2008: “If outsourcing doesn’t make your life easier, you’ve chosen the wrong supplier.” As statements go it’s fairly unequivocal, but Andrew Ferrier knows only too well knows that as Commercial Manager of Huntingdon-based Components Bureau he’s making his customers happy by removing all the potential problems and stresses. He continues: “ I think it’s important that we not only deliver on cost-savings and volume management but make the process as smooth and seamless as possible. It’s particularly important with the economic unease around at the moment; outsourcing should be the solution to the problem and not another hassle in itself.” He cites foreign exchange as one example: “If you were planning to manufacture in Asia independently you’d be handling four different currencies; sterling, the euro, US dollars and the RMB, and potentially could lose at each conversion. We make it easy for our customers by simply dealing in one currency: the US dollar. We invoice in and out in dollars. Additionally, we don’t have to buy dollars speculatively as we operate at a high enough level of business to hold our own reserves so we’re not held to ransom by international currency fluctuations.” Rising labour costs in China and an increasing domestic demand have highlighted China’s own challenges recently but Ferrier is upbeat. “We’ve always viewed China as a long-term partner. We’ve been trading with Asia for almost 25 years and have seen our partners SMT go from strength to strength. They now have four production plants across China. UK manufacturing is now in a position to really benefit from Chinese expertise and knowledge if it can only see past basement-level pricing. The maximum benefit will be enjoyed by those companies that involve China at the design stage to get maximum efficiency from production. I can’t emphasise the pay-off from partnerships enough. We are SMT’s UK partners and our working relationship is seamless. For our customers the benefits are that they deal with a UK company with no language, time or cultural difficulties. “Another problem we’re able to help small and medium-sized businesses with is resource. If you’re a manufacturer with limited capacity it can help your market-share enormously to know you have the back-up of 143 surface mount lines and 14,000 workers to call on with no capital investment! It offers the capability of a faster time to market and the benefits of economies of scale.“ Ferrier cites a recent case study: “We were able to help a successful OEM who produced several variants on an emergency lighting system. The problem was that even working on a 24/7 shift basis the company was struggling to fulfil orders, and was therefore risking market share and its excellent reputation of delivering within short lead times. It now manufactures its common PCBs through us and SMT who ship them to our own warehouse here in the UK where we hold them until they are needed. The customer calls off the requirement from our warehouse and uses their own workforce to do the configuration process. Being able to hold buffer stock for our customers gives them the flexibility and therefore the competitive edge that is crucial in any market, but absolutely critical right now.”

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