There have been a number of different initiatives in Europe to help European companies take advantage of Chinese manufacturing. One that shows a novel approach is from the Walters Group (High Wycombe, England), a 35-year-old electronics and electrical manufacturer with an annual turnover in excess of £32 million (about $61.75 million). It has traditionally worked with U.K.-based companies looking for local manufacturing expertise.
But Walters has started a service for European electronics companies that wish to take advantage of the low-cost manufacturing and component sourcing in China. The company originally looked to China to manufacture its own products – which vary from point-of-sale terminals to GPS units for golfers – but could see that existing subcontract clients would also need to consider the transfer.
It claims that its approach, using its design, component sourcing, assembly and test facilities in both the U.K. and Nantong, will allow high-investment developments – particularly large-volume production of consumer electronic and electrical products – to be designed, manufactured and delivered internationally at minimum risk with maximum efficiency.
The key to this service is that it will be run through Walters’ own facilities and people in China, allowing control and quality assurance standards to mirror those in the U.K. The company says the main difference between this service and other existing agency-type component sourcing and fabricating arrangements in China is that Walters has substantial resources there already (to ISO9000 standards) and can manage operations with its own on-site people.
An approach it calls “Blended Manufacturing Model” acknowledges the difficulties currently faced by European manufacturers – including high overhead and a difficult investment climate – and offers the benefits of running tightly controlled production operations in China.
The blend is a mix of design, prototyping, component procurement, tool making, injection molding, electronic assembly and QA facilities as well as total product lifecycle management.
“At a time when Europe’s manufacturing industries are taking a battering, we have already used the model successfully on our own generic products, and are certain that it can be of considerable benefit to their enterprises in the market,” said John Walters, chairman.
Walters’ first manufacturing facility in Nantong was opened in May 2005. The 30,000-sq. ft. factory manufactures electronic assemblies and was established as a 50-50 joint venture – Yan Walters with Chinese entrepreneur Yixia Yan, a native of Nantong but who is now based in Oxford, England.
John Walters, (right), chairman of Walters Group, with Chinese entrepreneur, Yixia Yan, partner in the Yan Walters joint venture based in Nantong
In early 2006 a second 18,000-sq. ft. plant was constructed. It has 30 CNC machining stations and several automated injection-molding lines. Design facilities include CAD systems. And it has just completed its third building, a 50,000-sq. ft. facility that will be the base for its QA services.
This facility – Quality House – will provide testing for products made on the site but is also designed to provide a service to European-based companies that are already having products made elsewhere in China. Engineers from Yan Walters will take products in to the Nantong laboratories for quality checks. It will also send engineers out to third-party manufacturing sites to check quality and advise on how to improve it.
“People using agents will not get the level of service we are aiming to provide, we will see the whole product through whereas an agent tends to see the first batch through and then move on to another contract. We will provide consistency throughout the process, and so goods arriving in Europe will be pre-inspected.”
“We provide a transparent service to clients, they can deal with us in the U.K. We have spent two years overcoming the hurdles so are ahead of anyone just entering the market,” said Mark Newell, managing director of Walters Group. “There can be logistic and taxation nightmares which we understand and have the answers for.”
“We will look to recruit engineers coming out of the local Chinese universities to train to provide local design services,” added Newell. Before new equipment was installed at the Yan Walters facilities engineers have come to High Wycombe from Nantong for training in an ongoing process.