Onshoring and reshoring is real says Circuitwise

The hope that the Covid-19 pandemic will bring some good by forcing companies to re-engineer supply chains from overseas to local sources is real, according to electronics manufacturer and assembler Circuitwise Electronics Manufacturing.

While local manufacturers turned to the half dozen large Australian printed circuit board makers at the height of pandemic disruption, the first serious contracts are now being set following lengthy quality validation by customers.

The Bella Vista, Sydney company has won a new contract with global group Siemens which marks a reversal of the tide of electronics manufacturing being outsourced to Asia.

Circuitwise is to manufacture the printed circuit board assemblies for the Communications Module of Siemens Fusesaver (picture) and the Compact Modular Recloser (CMR).

Fusesaver is a fast vacuum circuit-breaker for medium-voltage (MV) outdoor power distribution systems and the CMR features integrated self-powering from line-voltage.

In 2018 Siemens opened a new facility to make the Fusesaver and Compact Modular Recloser for export, but PCBs were sourced from Asia.

Circuitwise general manager Serena Ross said Siemens had thoroughly reviewed potential sources for the PCBs, with the decision to onshore to Australia coming back to the level of service available from an Australian manufacturer.

She told @AuManufacturing: “People have gone to China and other places in Asia and found out after a few years the cracks have started to show.

“Sourcing from Asia is not the rosy situation many thought.”

Quite apart from Covid disruptions, overseas suppliers could be inflexible or took longer to reply to queries, and in recent times the price differential has narrowed between imports and local manufacture.

“Our machines are operating at 130,000 components per hour and we have only one operator hovering round a number of machines.

“We pump out so many boards the labour content is negligible.”

Ross estimated a 10 per cent price differential between local production and imports, with more secure and responsive local suppliers now having the advantage.

Australia was not competitive where there was a lot of fiddly manual assembly, or when products had not been well designed for easy manufacture.

“Two years ago we were seeing a new customer coming through here once a month. But at the moment we are hearing from a new customer every single day.”

Ross said that for many manufacturers a decision to offshore to Asia had in the past been a validation that they had ‘made it’.

But companies were now prepared to look at local sourcing.

Onshoring of smaller jobs and the Siemens contract has allowed Circuitwise to hire two more production workers adding to its staff of 70, with a third now likely to be recruited.

Picture: Circuitwise/Siemens Fusesaver

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