May 2012 - NEW!
Car-San Manufacturing Limited has a new addition to its SMT line - a My9 SMT placement machine from MYDATA Automation. The My9 joins our Siemens SiPlace80 and Contact 3S for maximum flexibility of set ups and ability to place a diverse range of SMT parts. Thanks to Liz Morill of MYDATA and Richard Fournier of OEM Partners for their assistance in setting us up with our new equipment!
Car-San Manufacturing Limited is proud to announce the arrival of our APS Novastar Selective Soldering Machine for high precision, high reliability soldering requirements - the first of its kind in Canada. In keeping with our mission statement to provide Quality Electronic Manufacturing Services, we are pleased to provide this new service to our current and potential customers.
We're still here! Although the recession has been very hard on local industry, we at Car-San Manufacturing Limited would like to remind our current clientele and any potential customers that we are, in fact, still in business! In fact, we have relocated again to another larger facility just a few doors down from where we were, to 162 McIntyre Drive.
Give us a call at (519) 885-0403 (our phone and fax numbers are still the same) to check out our new plant and see how we can continue to provide all your Quality EMS requirements!
Car-San Manufacturing Limited announces the launch of their new and greatly improved web site. In order to better service our current customer base as well as to reach out to new customers, we needed a more polished web presence to appeal to our high-tech savvy clientele. Our thanks goes out to Gary and Sheila at Pixweaver Web Design for giving us the professional appearance we were hoping for.
Car-San Manufacturing Limited, completed the registration process with TUV Canada Inc. by meeting all the criteria for the ISO9001:2000 standard. Thanks to the invaluable assistance of Carolyn and Patrick from CMAC Training & Consulting Services Inc. we achieved our registration relatively painlessly and look forward to working with them in future in assisting us with our semi-annual audits to ensure our system continues to run smoothly.
Car-San Manufacturing Limited relocated to a new facility at 222 McIntyre Drive in Kitchener, ON Canada. Our newer, larger premises includes an SMT line with a Siemens SiPlace80, capable of placing high mix, high volume SMT parts from BGA's down to 0402's. As well, we have installed ESD epoxy flooring throughout and have incorporated a paperless assembly documentation system.
The following article is true for Canada as well as the US!
Why contract manufacturing in the US makes all the sense in the world
Oct 23, 2007
Outsourcing manufacturing production of electronic equipment to the Far East has become a reflex action on the part of many U.S. based Original Equipment Manufacturers (OEM's) who are apparently bedazzled by the region's low labor rates.
Hidden and not so hidden increased logistics and other costs, however,
usually nullify labor savings thus resulting in higher Total Supply Chain expenses after the decision to off-shore production.
There is more to outsourcing to the far east than meets the eye
There is a pell-mell rush by OEM's of consumer electronics, computing equipment, medical devices, telecommunications gear, and other electronic products, to outsource production to contract manufacturers in the Far East. Approximately 50% of a worldwide market of nearly $200 billion for electronic manufacturing is based in the region, with the Chinese Dragon accounting for approximately 75% of the Asian market. In the ordinary course of business the OEM is driven by a need to establish the lowest possible cost for the manufacture of a given product while retaining design and other valuable intellectual property. Moving production to the Far East, however, does not necessarily translate into lower total cost once the analysis moves beyond direct labor.
Cheap labor is not the answer
All good things must come to an end. Cheap Asian labor, too, will come to an end. China, in particular, is witnessing a severe case of wage inflation in technical and professional jobs. China's cost advantages versus those of advanced western economies, especially the United States, still exist but the gap is closing fast. Double-digit growth in wages is now the norm and there appears to be no end to the spiral. The upshot for companies considering off-shoring production is not just the obvious cost escalation of wages but the fact that wage inflation has now led to an increased level of job-hopping and therefore worker turnover never before seen in China. China's economy, the world's fastest growing major economy, is growing at 8% per year, the manufacturing sector in excess of 10%. As a result, there is emerging a serious shortage of skilled manufacturing, quality control, and middle management workers. This is precisely the profile of the worker that is needed in factories turning out high-technology products for American companies.
Transportation, logistics and cycle time considerations go beyond the obvious
A 7,000 mile, multimode journey to the United States from the Far East takes time - lots of time. And, if there is any truth to the aphorism that "time is money" then the journey should be an expensive one. In a recent survey, approximately 50% of respondents suggested that manufacturing orders sourced in China took more than 60 days to be received stateside. Not surprisingly, the vast majority of these respondents also reported the highest logistics costs. Never mind that crude oil climbs to $100 a barrel. Today, the cost of having product stuck in a supply chain for weeks, if not months, has as much to do with the fact that the product has to pass through so many hands - manufacturers, forwarders, customs officials, regulators, shippers, ports, etc. - as with the actual cost of transportation.
The long cycle time inherent in off-shore production has other, more insidious, consequences that will drive higher operating costs. These surround the OEM's ability to forecast the right quantities of product to deal with the vicissitudes of a labyrinthine supply line. Is it reasonable to assume that a forecast can accurately lock in demand months in advance? Does the OEM instinctively over order or over stock in response to the long cycle time? Are scheduled ocean freight shipments frequently supplemented with expensive air freight for sorely needed product? What is the cost of distributing the product in the United States to the end-customer once it is inbound from off-shore factories? How does the supply chain respond to unexpected changes in demand? What is the role of the contract manufacturer in the service and warranty of the manufactured product? Even OEM's with high-volume, low-mix product manufacturing needs will find the cost of their supply chain to the Far East to be saturated with substantial non-manufacturing cost inefficiencies.
Social, legal and cultural barriers can pose extraordinary costs to the OEM
If the hard costs of transportation and logistics are not immediately obvious, the softer costs of doing business are totally hidden from view. For example, what is the cost to the OEM of having intellectual property pirated? What is the cost of a business opportunity lost to graft, and corruption? China is not yet a country of laws as a large portion of the GDP is lost under the table. The upshot of this is that the OEM will encounter additional costs beyond those inherent in its conventional supply chain.
China operates a top-down, command economy - despite the country's rhetoric to embrace free market mechanisms - much as it has for decades. One does business in China against a backdrop of opaque rules and regulations. Many of these rules transcend the official judicial framework. It is a serious concern to the West that more and more non-market solutions will be sought by China to deal with everything from national insecurities to energy and commodity shortages. Clearly, these issues are more ominous than having to communicate with a source of supply twelve time zones away, or of having to slog through almost impenetrable language barriers. They are no less real, however, and should be seriously evaluated before committing to off-shore production.
It's the supply chain stupid!
Sourcing product, if only gemstones, along the Silk Road has always made for a complicated, risky, and unpredictable supply chain. Today, the complexities of outsourcing production, especially of electronic equipment, to the Far East trump the advantages of cheap labor. A hasty decision to off-shore production ignores the consequences to the business model that logically should factor in increased coordination overhead to keep the pulse of a dizzyingly complex supply chain, increased domestic distribution costs, added transportation costs including frequent air shipments to expedite deliveries, added inventory buffers to offset the sheer unpredictability of demand forecasting several months into the future, and the risk of loss of intellectual property. Unless the OEM covets the huge and rapidly expanding domestic Far East market and is prepared to pay a huge admission price to get in, there is ample reason to pause before committing production off-shore. For products consumed in this country, OEM's should be asking the question: "Why not outsource production to U.S. based contract manufacturers?"
Raul Pupo is Chief Executive Officer of Technology Infrastructure Solutions, Inc., a Technology Deployment Company, with contract manufacturing facilities in Statesville, North Carolina. More information about TIS at www.deploytis.com.