APC Technology Lands New Exclusive Manufacturing Contract

APC Technology has been awarded an exclusive manufacturing contract by a defence-focused company to assemble a range of products at their facilities in Adelaide, South Australia. Previously manufacturing had been based in Asia but the growing importance of sovereign capability has led to a re-evaluation of on-shore manufacturing opportunities. This win follows the recent signing of a three year extension by Pinssar for the exclusive manufacturing of DPM readers at APC.

2020 has been overshadowed by the global impact of COVID. Many businesses and industries have recognised the vulnerability of supply chains, notably the reliance on overseas companies. Australian businesses and governments are discovering the benefits of staying on-shore creating a demand for domestic manufacturing companies, with a notable demand in the high tech space. Factors that are creating a shift in thinking include:-

No tariff vulnerability

Recent trade disputes such as the EU | UK and China | US has highlighted there is no guarantee that current tariffs will not change significantly in the future. The economic impact of COVID means countries are revisiting their free trade and tariff policies. The more globalised a supply chain is, the more vulnerable a company is to tariff regimes. By manufacturing in Australia companies can reduce the supply-side risk.

Currency fluctuations

In-country manufacturing can bring certainty of costs. Currency fluctuations can work in a company’s favour but it does create uncertainty for long term sales and manufacturing projections.

Intellectual property protection

Australia offers comprehensive laws for the protection of intellectual property (IP) providing peace of mind that companies are able to protect and prosecute the theft of innovative design. Unfortunately the laws for IP theft is not policed to the same level in all countries. The IP commission ⁽¹⁾ has estimated up to $600 billion annually in cost for to the US economy from Chinese IP infringements.

Calculating an accurate total cost

The total cost of production is much more than the cost of materials and labour. Often referred to as the landing cost, this includes designs, samples, moulds, labour, materials, packaging, shipping and duties. Off shore shipping and duties can fluctuate due to global influences and significant volumes can impact associated costs.

Language and cultural barriers

Extensive research has been completed on the pros and cons of manufacturing overseas. One of the key obstacles is the issue of language and cultural barriers. There are steps to minimise these such as the use of a sourcing agency, or engaging a consultant on the ground. However engaging a reliable representative is a significant challenge and means relying on a third party to provide accurate translations both verbal and written. Companies who ‘go it alone’ to source a partner face the challenge of negotiating in unchartered territories.

Quality control

Proximity to a manufacturer can offer the advantage of more control over product quality due to physical accessibility. Additionally regulatory legislation within Australia around quality control is world class providing peace of mind.

Delivery speed and reliability

Delivery speed and scheduling can be impacted due to handling custom regulations with off-shore suppliers. Additionally an alignment in public holidays means a reduction in deliverable dates improving the supply chain.

APC Technology are actively seeking to work with Australian companies on exclusive manufacturing opportunities.