Manufacturing metal components: offshore or local?

Supplier: Anchorage Group
14 April, 2014

Is it more cost-effective long term to obtain pressed metal parts and components in Australia or from offshore manufacturers?

Roger Shemilt, Technical Sales Manager at Australian metal pressing specialist Swift Metal Services advises local manufacturers to explore all avenues in Australia before taking manufacturing of products or parts offshore.

"Short to medium runs of metal components, pressed steel parts and stamped componentry can be produced in Australia on automated machinery for similar net costs, with greater accuracy, consistent quality and vastly shorter lead times than some imported components," he said.

"Australian and New Zealand manufacturers need to consider the complete cost cycle when using imported parts."

Hidden costs that may not be considered include, exchange rate fluctuations, international payment charges, freight including road freight from wharf to customer, import duties, customs clearance charges, additional warehousing expenses and increased inventory required to ensure imported parts on inevitable long lead times do not adversely impact production.

Then there is the problem if the parts arrive faulty.

According to Shemilt, many companies that have trialled importing components from countries with lower labour costs than Australia have had the inevitable batch of faulty parts – typically after two or three shipments of good components.

Established Australian manufacturers provide a three-way guarantee called DIFOTIS, which is interpreted Delivered In Full On Time In Specification. 

Shemilt concluded: "The secret is using qualified trades personal, LEAN manufacturing techniques combined with on-going training and investment in technologically advanced machinery."

To read more about component costs please click here