Competing with China in manufacturing

Many engineered industrial products face competition from new, lower cost supplies arising from emerging companies in eastern Europe, India or China: we hear the story often. The new imported products might be lower cost, smaller, more efficient, quieter: while their labour rates might indeed be lower, what this actually means is that these overseas design engineers have looked at the currently produced product using the latest materials and design technology, and produced a more cost effective, current design. If this has not been done by the current supplier, who has the advantage of knowing the product, the customers and having the existing production base, then he leaves the opportunity open to new competitors. So it was really interesting to visit Edwards, the vacuum pump suppliers, at Burgess Hill, and hear how they have maintained and developed their business. A vacuum pump is a mechanical pump in a housing: so you would think it is a prime target for the ‘low cost’ producers. But Edwards has a philosophy of constant innovation, focused purely on vacuum technology and their customer requirements: 5% of their USD1Bn turnover goes back into R+D. Every year 30% of the sales volume comes from new products introduced that year, meaning that any copycat producers will by definition be one step behind. With factory throughput and product mix changing so fast the Edwards production lines and machinery are constantly reviewed: with each review, production time and costs are taken out of each product: again providing rapidly diminishing return potential for new competitors. But perhaps above all, the distinct impression is that a key part of the Edwards success is that their engineers are deeply involved and integrated into the R+D project teams at their customers. Typical of this is their current involvement in the production of Flat Panel TV screens. The production of these units is almost totally located in Korea: so involvement in the project also meant the establishment of a production and assembly plant in Korea for the equipment needed to make Flat Panel displays, and provide immediate on site service when needed. This gets more interesting (from the process instrumentation point of view) when the customers are biofuel producers, or scientific instrument suppliers, producing mass spectrometers and so on. Successive generations of such instruments get smaller and lower in cost, and an essential part of that development is the smaller vacuum pump, which also has to run quieter, with less vibration, with each successive model. Read more of the impressions left by a visit to Edwards in the Special Report, on