In the business world a company always has two overarching goals: minimise expenses and maximise profit. Different organisations achieve these goals in different ways depending on their industry, geographic location, and customer base.
One popular strategy to lower expenses that has emerged in recent years is the practice of outsourcing parts and equipment to other countries.
Since labour is often cheaper in the developing countries of areas like Asia and Eastern Europe, many Australian manufacturing companies are beginning to purchase parts and equipment from overseas to cut down on costs.
The problem with this approach is that, as many companies and consumers know, lower priced products often mean lower quality. You may save money upfront by paying a lower price, but there is a good chance that you will have to pay more down the road, either from excessive maintenance costs or from having to replace what you’ve purchased earlier than you expected all the while incurring shipping costs each time.
From a manufacturing standpoint, having high quality products in your facility is critical for keeping your operation running as smoothly as possible.
Take rapid roller doors, for example: substantial cost savings are possible through importation of complete doors from China or Eastern Europe, but many people make the mistake of miscalculating the cost of installation, with hidden costs commonly encountered through; unsupported electrical hardware/software, differing voltage to your country of use, and non-compliant safety systems.
Initial cost savings can be lost before the equipment has even been commissioned, through wasted time, replacement of missing or inferior parts, and conversion of hardware to suit local conditions. Missing parts may take weeks to source and replace, adding to this unseen cost.
Do you recall the 2015 Electrical Cabling drama where recall progress reports indicate that up to 22,000 homes, commercial and residential buildings in Australia may have been affected by cabling which was not up to the recommended standard.
Companies that are based in Australia and which build products for Australian businesses know exactly what their customers are expecting.
An often overlooked value in sourcing from local suppliers is the fact that they’re always ‘within reach’ and are much less likely to survive with inferior quality or service.
By contrast, offshore suppliers have the inherent cloak of distance, time zone, and language barriers providing cover for sub-standard practice and come-back on inferior quality.
At Remax, for example, “addressing our customers’ need for quality is one of our most important concerns” says the Managing Director of Remax, “our managing directors are all closely involved in every facet of the business, including quality inspections, site measurements, and installations.” Throughout the entire purchasing process, from product selection to final installation, Remax is in touch with the customer to make sure they have what they need.
Another big benefit of buying Australian-made manufacturing products is that you get the advantage of easier repair services. Since the products are made in Australia, both the people with the knowledge of how to repair the equipment and the materials needed for the repairs are also in Australia. Think about how much longer it would take for you to get parts for repairs sent over from China versus getting parts sent interstate or even in the same city.
Managing Director of Remax Doors, suggests that; “like the products of many other Australian companies, Remax Doors are bespoke, which means they can be adjusted more easily in the field. In the event of a problem with Australian-made products, you can be sure that you get a compatible component for repairs, since this equipment is made locally.”
Often overlooked, but certainly important where significant investments are being made, is to ask yourself - will this product stand up to local conditions?
For example, in Northern Victoria, Australia, winter and summer temperatures can reach extremes where the summer months are a hot and dry 35-40 degrees Celsius with not a drop of moisture in the air but winter days are crisp and frosty. If products purchased overseas have not been tested in these environments, there is potential for big problems later down the line when, for example, where cheap roller shutters have expanded in the hot summer months and warped out of shape, and no longer able to roll up correctly which renders them useless with a very short life span.
The overseas manufacturer may suggest that the ongoing maintenance is low - but they are referring to that product being used in their local conditions. Not your hot, dry, dusty summer and frosty winter...
An example of this type of knowledge: when installing a roller shutter which faces the sun for the majority of the day - choose a light coloured roller shutter which will absorb less heat during the long, hot, dry summer months and therefore reduce the chances that it may expand out of shape. This is the sort of advice that a supplier based in an humid, mild temperate country for example, may not offer.
Even if we temporarily look away from the tremendous product quality issues that can come about from outsourcing, there is still a significant economic impact on the country as a whole because of outsourcing.
When you buy local, you support Australian communities and strengthen local businesses, which is beneficial for everyone in the community. You also help contribute to job growth: as companies improve their turnover, they have the opportunity to grow the company and hire more employees.
Outsourcing, on the other hand, contributes more to the growth of foreign economies than local ones. In an article published in February in The Courier-Mail, it was revealed that about 25,000 Australian jobs were exported to the Philippines. That number was expected to double to 50,000 by the end of 2014. Not only does that mean 50,000 Australians missing out on job opportunities, but it also means less of an overall contribution to the economy: those 50,000 overseas workers are not putting anywhere near as much into the Australian economy as 50,000 Aussies filling the same roles would. The Courier-Mail talks about entire cities in the Philippines that have grown exponentially simply as a result of countries like Australia outsourcing.
Thanks to the Internet, it’s now easier than ever been to outsource your manufacturing needs to another country to save money. If you have decided to offshore some of your facility’s materials, make sure that you do sufficient research into the quality and construction of what you’re buying, as well as the potential maintenance costs that you may sustain if something goes wrong with the products.
At Remax, we take great pride in our domestic production as well as our ability to make affordable, high-quality products that work well for our customers’ needs. Give us a call today on 1800 010 221 or check out brochures for our Movidor High Speed Doors to see exactly how beneficial buying Australian can be for your facility or warehouse.