Local CEM finds 'key' to low cost electronics manufacturing

Manufacturing / Production Technology, Hardware & Services

Production/manufacturing equipment suppliers & service providers

28 July 2004 Manufacturing / Production Technology, Hardware & Services

While manufacturing prices in the SA electronics industry keep climbing, Vektronix claims it has unlocked the secret to keeping manufacturing costs in check by following a few basic guidelines.

The Vektronix factory has been purpose-designed with a focus on increasing efficiency in order to cut costs - directly relating to affordable prices for Vektronix clients while at the same time keeping the company highly profitable.

Craig Tyzack, CEO of the East London-based electronics contract manufacturer, says special attention is given to the workflow process while maintaining flexibility around the labour force. Following a management buy-out by six of the directors, Vektronix has the flexibility to call on a vast database of skilled workers whenever the need arises, he says. This results in a win-win situation for the workers as well as the company. Less labour hours are put in by the workers who are paid an agreed amount for a specific job - regardless how long it takes - while the company benefits from employing people for a specific job only at peak times while less cost are involved during quiet periods. It also has the capacity to take on new projects as Vektronix is able to draw from a labour pool previously-employed by electronic manufacturers in the area.

"What gives us our competitive edge is that we are in a fortunate position to give our clients the best deal. We have low labour costs, competitive rentals, favourable energy costs in terms of electricity, and a flexible staff complement to boot," says Tyzack.

Higher volumes directly relate to cheaper prices, he adds. "While most manufacturing companies inflate prices for small volumes, Vektronix has the capacity to take on big or small projects, and complete them in record time because the company can decrease or increase its labour force at a moment's notice. After our first year as shareholders we are delighted with the returns on our investment. Vektronix is living proof that the electronics industry can be profitable without the client having to pay their hard-earned money for it."

Vextronix has a rich and colourful history which goes back to Plessey South Africa that was bought out by Dimension Data and Tellumat. Tellumat was later re-established as a privately-owned company but continued Plessey's focus as a developer of own technologies in key niche areas such as private switching communications systems, microwave radio equipment and avionics products and systems. Vektronix has, since taking over the company just over a year ago, adapted itself to manufacture or assemble equipment and products from a much broader range of electronic and mechanical products. This includes radio, home audio equipment, pre-paid electricity meters and M-Net decoders.

According to Tyzak, any brand owner looking to contract its electronics manufacturing in South Africa would do well to consider Vektronix for the job, since, its experience and reputation for delivering quality goods at below normal prices makes it a formidable player in the global electronic industry. Vektronix is flexible too. With the factory situated close to the East London Port for easy shipping, the time lag associated with the congestion at the larger ports is minimised and as an added bonus, transport costs are cut. Volume discounts have also been negotiated with local partners for transport of finished goods. It is also close to the airport and the N2.

Vektronix' success in the past year has been phenomenal, so much so that its directors have recently purchased the entire industrial park in which the factory is situated. This makes over 33 000 m² available at secured rentals for future growth requirements.

Share this article:

Categories

Manufacturing / Production Technology, Hardware & Services

Local CEM finds 'key' to low cost electronics manufacturing

Further reading:

Publications by Technews