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China based manufacture more a blind habit than business culture

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article image Locally manufactured components offer cost and time advantages to the mining sector

Sevaan Group Pty Ltd , a successful company in the Australian manufacturing and engineering sector believes that Australia’s dependence on Chinese fabrication is based on a mistaken notion.

Sevaan Group has proved it is possible to prosper and expand by focusing investment on local industry positives rather than the inherent risks in outsourcing to China.

Chief Executive Officer of the company, Mr Tony Panrucker asks Australian manufacturers and clients of manufacturers to consider one simple question: "What are the benefits really of sourcing manufacture in China?"

He observes the inherent risks are so profound it is somewhat confusing why so many companies in Australia blindly accept outsourcing to Chinese manufacturers almost as a default culture. Mr Panrucker explains it as a ‘blindly habitual belief China is the only way to go because dealing with Australian design/engineering companies is way too expensive’.

Many Australian manufacturers haven’t even really looked around locally to find a suitable solution, but the ones that have found the right supplier domestically can attest to the various risks, which actually make China an unattractive risk in the manufacturing supply chain.

For instance, when one is dealing with orders from China that involve bulk supply, it results in the Australia-based client absorbing weeks and weeks of lead time even on a perfect run. When problems arise, it could actually add months to the order and wreck an entire supply chain and contractual arrangement.

However, orders can be facilitated locally with a little bit of strategic thought and proper business analysis. Even though the unit price might be a little bit higher, there are advantages such as incomparable speed of delivery, superior and consistent standards of manufacturing, and almost non-existent potential for delay in delivery.

While China is making decent gains in quality standards, its manufacturing quality is still far inferior to Australia. Additionally, orders have to make long journeys by road and sea, adding time and complexity to the whole process. Australian manufacturers dependent on China need to quantify these risks in advance so that they can accurately understand the true cost of their outsourced orders.

In the last two years, Sevaan Group has managed to bring back to Australia various orders that had been outsourced to China by several Australian companies in mining, construction, railways, public works, defence and general engineering.

Sevaan Group has expanded nationally and internationally with clever high-tech engineering equipment on its production floor, expert personnel and the recent establishment of its own grit blasting plant and upgraded powder coating facility in Sydney.

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