Hey Ed,
Maybe you know guys already know about this, but just in case, it is an interesting little article from CTE news. Goes against what I personally have understood, which was that if you used your own good "QC" right at the manufacturing site in China, you got good product. Guess I'm wrong again.
Take care.
Brian Lawson, Bothwell, Ontario.
XXXXXXXXXXXXXXXXXXXXXXXXX
28-Jul-09 3:00 AM AWST
600 Group drops China sourcing
Machine tool manufacturer 600 Group has pulled back from outsourcing production to China because of the poor levels of quality and consequent warranty claims.
Quality problems have led 600 Group to drop its stategy of sourcing from China Releasing details of its recent significant restructuring and new product supply arrangements CEO David Norman said: ?At the time of my appointment in August, it was clear that both the cost infrastructure of the Group and the machine tools? supply chain were in need of urgent attention. Considerable action has subsequently been taken and continues to be required to effect transformational change within the Group?s operations, whilst concurrently taking additional defensive actions in light of depressed market conditions.?
He added that the company has also moved to a simpler business model which supports its commitment to manufacturing and supplying high quality customer focused products.
Previously a significant feature of the Group?s strategy was the outsourcing of a large part of production and supply from China. Regrettably, says the company, the levels of quality originally envisaged were not achieved and, despite a major effort by the engineering and quality teams, the result was an unacceptable level of warranty claims. Mr Normal says that under these circumstances the supply chain was re-engineered and new outsourcing arrangements were put in place, resulting in a return to historic levels of product quality.
The company is also making significant investments in the manufacture of workholding equipment and machine components at is machine shop in Heckmondwike, which is now one of the largest of its kind in the UK. This focus on the development of the Group?s UK manufacturing base is likely to continue.
The Group is moving to a simpler business model eliminating duplication and ensuring more consistency for customers. Product sourcing is now under the control of a single product management team, working on behalf of the entire Group. Sales and marketing effort will now be directed towards 600 Group brands, including Colchester-Harrison, Electrox, Pratt Burnerd and Gamet Bearings. The Group will continue to sell a limited number of other products complementary to these core ranges.
Mr Norman concluded: ?Major restructuring and significant cost reductions have been necessary to ensure that 600 Group is in the right shape to weather the current market and has a strong platform from which to grow the business.
?We will increasingly be going to market as a group rather than a collection of companies. Central product management will control the Group?s marketing strategy to achieve maximum leverage of Group brands. The associated sales volume benefits will drive our outsourcing arrangements in addition to strengthening our manufacturing base in our three UK locations, Heckmondwike, West Yorkshire, Colchester, Essex and Letchworth, Hertfordshire.
?There is still a great deal of work to do but I believe that the Group will soon be in a position to take advantage of any recovery as well as opportunities which may arise from the global downturn.?