The secret to competing with lower cost economies.
As New Zealand manufacturers we are faced with a bunch of challenges, comparatively high energy costs, the tyranny of distance, but the major issue that always seems to bite us is competing in a global market when our NZ based clients have the choice of lower cost off shore manufacturing due to lower wage economies. What hurts the most is that it is generally the large volume manufacturing which is sourced overseas, but it doesn’t have to be this way.
Over the last two years we have been working closely with a client to revolutionise their medium volume product, they had a very dated product with tooling that had reached the end its life which they wished to modernise. Synapco had been supplying the client with components which were then assembled by the client using a manually operated assembly machine. This inefficient assembly method and double handling was adding significant cost to the clients finished product, and in turn limited his access to overseas markets. Seeing that Synapco could be involved in a ground up redesign of the product we had the perfect opportunity to review our client’s assembly process and suggested a significantly more cost-effective automated assembly method.
Initially, our client looked at using a third party to develop an assembly solution but was deterred by the scale of investment and level of risk associated. Synapco offered to develop an automated assembly machine integral with a moulding machine, there was no cost to our client for this custom manufacturing line which was designed and built in-house. This required Synapco to develop new technology in the field of plastic welding – in this case, a 25-micron bag welded to a 1mm thick moulded half spherical cap.
Synapco’s investment has allowed our client to take on the world with more competitive pricing and a vastly superior product. Our reward will be our client’s growth in annual sales moving Synapco from medium to high volume production to meet their needs.
The assembly line also has far greater output due to efficiency which means our client can accept larger orders without fear of late delivery, or short suppling any clients. The real kicker here is because the assembly line is largely automated, save quality checking and packing, there is little risk of this contract being relocated to a lower wage economy. The outcome has produced a win-win for both companies and the New Zealand economy, which genuinely benefits everyone.
If you would like to find out more to help you improve your product or a difficult/inefficient assembly process, fill out our contact form.