The Evolving Central and Eastern European Manufacturing Landscape -
John Mayes, Group Managing Director
There has been significant shakeup during the past seven years in the shape, size and influence of world markets, geopolitical landscapes, and global economies. Although low labour costs have historically been a key force attracting manufacturing projects into China, steady improvements in pay and working conditions are among factors now changing the economics of assembly in the Far East. While China is clearly the workshop of the world, a more informed and measured view of the economic benefits of outsourcing there has definitely been taking hold. Even putting distances and logistics aside, real inflation and currency changes have had a substantial impact upon the cost of manufacturing there. Inflation has been running in excess of 5% which alone puts upward pressure on wages but meanwhile the government has been putting more workers rights legislation into place, particularly with respect to minimum wages.
Factor in other global economic influences such as currency fluctuations, and as a result, Central Europe is now tipped as being the most favourable location to build electronics products, especially for distribution into European markets. Large factories and significant investment throughout the region to produce high-volume products such as televisions testify to this rationale, but even low-volume, more complex products can also benefit; assuming a well controlled NPI-to-production mechanism.
More complex, specialist products such as advanced industrial machinery are also being built successfully at plants in Central Europe. The JJS Electronics 40,000 sq ft manufacturing facility at Chomutov in the Czech Republic is a good example. JJS’s facility takes advantage of the excellent skills available among Czech workers, as well as the relatively low labour costs compared to its UK parent site. Working for customers in sectors including industrial, medical, packaging, transportation, scientific and communications, JJS has built an excellent reputation for PCBA, electrical and mechanical product assembly, together with system-level integration and mechatronics capabilities. This capacity is further reinforced by robust material procurement, inventory management, component engineering and test services; all carried out by the company’s highly qualified and experienced specialist teams.
The Czech facility is fully equipped to handle a wide range of production requirements, providing JJS customers with a proven route to ‘offshore’ manufacturing. The combined manufacturing solution means that once UK-based engineering and manufacturing specialists have gained a full understanding of a new project or product and full supporting manufacturing documentation has been developed, customers can choose to transition final assembly to the Czech Republic to harness the advantages of manufacturing in a lower cost region. Looking ahead, the team at JJS are certainly not prepared to stand still. Having recently conducted an in-depth review of its facilities, production equipment and operating procedures in conjunction with key supplier MYDATA, JJS has taken steps to increase its surface mount PCBA production capacity during 2009 and implement valuable structural improvements.
In fact, the recent initiative led to the purchase of a new MY100DX-14 which has been installed in-line with one of its existing MY15s.
An advanced facility based in Lutterworth, England is similarly housed in 40,000 sq ft of production space and equipped to handle a wide range of services including New Product Introduction, Design-for-Manufacture, Design-for-Test, value engineering, conventional and surface mount PCB assembly, control & panel wiring, full systems integration, electromechanical assemblies and cable harnesses.
By managing the entire NPI-to-production process from the UK, including prototype build and continuous communication with UK-based OEMs, this model promises the best of both worlds by retaining the manufacturing process control that has often been too easily lost in the rush to build offshore.
