Choosing where to site a factory is an issue that is as involved with peoples’ perceptions as it is with politics and cost
China is a country where it is cheap and easy to have products manufactured, but there are a number of things to consider if you want to get involved. “My view on producing in China is that it is very good, but if you allow local engineers to do it, they will do it their own way” said David Houlden, MD of National Autoparts. “The classic is if you give them a drawing and it will come back differently, because ‘it is easier’”.
Houlden is clear on a solution. “To overcome that you do it yourself. You have people out there on a very regular basis and keep those people in the factories. We employ a UK quality company to be out there and check stuff as well as our own engineers are there on a regular basis”.
He adds that the two factories that his company uses are owned in a joint venture with a local partner.
When National took the decision to introduce pads, a new skill set was required. “Metal we understand, but for friction we had to take on someone for two and a half years” he said. “We didn’t know a lot about pads, so we employed a consultant who had OE experience, who is heavily involved in anything we do”.
However, manufacturing on the other side of the world is not without its problems. Even if the product quality is consistent, there is an issue of logistics to consider. Colin Smit, UK MD of Polish manufacturer Lumag, which sells the Breck light vehicle pad range in the UK said: “I wouldn’t want to place an order with five months worth of stock all the way from China”.
“From here (in Doncaster) we have a 98 percent pick rate and we can place a daily delivery on the factory if we want to. It only takes three days to get the stock from the factory” he said, adding that the warehouse had quite a high stockturn and there was no reason to tie stock, and therefore cash, up in inventory.
Producing in Europe is markedly more expensive, something Smit admits to being ‘a difficult sell’ to customers that are simply focused on price. “It’s a premium product, not a white- box product. We are targeting customers of premium brands”.
Meanwhile, some brake components are produced even closer home and are remanufactured in the UK.Brake Engineering has produced in Wales since it was founded in the 1980s. However, the days of needing to accrue a big stockpile of core for one reference before you begin are in the past. “Traditionally, a remanufacturer would stockpile individual references in cages until there is a large enough batch for it to remake” said Steve Willis, IAM General Manager at the firm’s parent company. Today, Willis says that this notion is obsolete. “If the car is on a ramp and needing a part, the garage isn’t going to wait for us to assemble a core pile, they will go somewhere else – so it is critical for us to service the need as soon as possible and Wrexham is all about making sure the highest service level is maintained” he said.