Design needs drive the resurgence of manufacturing in European plants

21st February 2013

At £45m turnover, ACW has 400 people in plants in Southampton, Tonypandy in Wales and Zhuhai, China, and makes leading edge printed boards with up to 24 layers and end products for Tandberg Televison, BAe Systems and Thales. The plant in Southampton, UK, is the former manufacturing plant of Tandberg and still handles much of the manufacturing, as well as building the end product, downloading all the different software variants and handling the repairs and order fulfillment.

But the key is the combination of the manufacturing capabilities in Europe and China. The Chinese factory is owned and run by ACW rather than a Chinee partner, and processes are transferred exactly so that manufacturing can be easily transferred to China for higher volume, lower cost results. The company also works closely with customers to make sure the design can me manufactured cost effectively, rather than just taking a design at the end and having to make it. This takes time and having the manufacturing experts close is a key benefit, rather than having to sort out the problems on a manufacturing line in China.

This is combined with a cost reduction in the components from the increase in volume and the global sourcing capability (see box) to deliver the long term cost reductions that are the reasons to moving to a Chinese manufacturer.

The company is also large enough to support this business model. “That’s one of the key differentiators – financially we are more robust than any of the other independent companies in the UK and probably the largest,” said Chris Woods, owner and executive chairman of ACW.

At the same time, the UK base provides a fast turnaround for initial manufacturing and easy contact with the factory, rather than having to deal with China direct. This is also an advantage in competing with the large contract manufacturers such as Solectron and Flextronics, says Woods. These often try to win smaller deals for particular factories but the relationships are with the factory directly, and that can be in Eastern Europe or other parts of the world. “We are picking up two large customers as a direct result of tier one companies moving manufacturing out to Eastern Europe,” said David Taylor, sales and marketing director.

One of the challenges is supporting startup companies, as these can take a lot of resources, especially with the design assistance, and sometimes leave bad debts.

“In the UK there’s lots of good startups with great ideas but the exposure is damn high,” said Woods. “We are taking a punt and we have to look at these things and establish how good their products are.”

Other manufacturers are taking advantage of the down-sizing of large multinationals.

Specialist RF electronics manufacturer Syntech Technologies in Paignton in the south west of the UK has expanded its capacity by taking over a former Nortel plant in the area.

The company has leased 20000sqft of the former Nortel facility with an option to double the space. The skills in the company come from companies such as Nortel, STC and Bookham.

Syntech has been helping companies develop products integrating any form of wireless interface from 500MHz to 30GHz and putting those products into manufacture using Syntech’s inhouse assembly and test facilities.

The company has deals with companies such as QinetiQ, Airspan and IPWireless, as well as innovative start-ups with hand held GPS and thin client PC applications.

The key is the skills that are available in the area. As a result, Syntech has won a contract worth over $7m, for the co-development and manufacture of a new satellite-based asset tracking and security telematics system for Satamatics of Tewkesbury.

Satamatics is a leading global supplier of asset tracking and telematics systems, and operates its own worldwide communications network. This new contract, which covers the manufacture of Satamatics’ remote terminal equipment and follows on from Syntech’s existing contract for antenna system.

“Syntech Technologies’ mix of engineering and manufacturing skills enables us to offer our high performance systems extremely cost effectively, with a unique feature set,” said Peter Chisholm, CEO of Satamatics. “Syntech Technologies has already demonstrated the success of its engineering and manufacturing skills and, with the recent extension in its manufacturing capability, it now represents an ideal partner in our future growth.

“Syntech's comprehensive technical understanding is unique in ensuring fast turnaround, high quality manufacturing.”

“The partnership with Satamatics on this project, demonstrates the company’s confidence in the capabilities of our advanced RF design and volume manufacturing,” said Mike Badcott, Engineering director at Syntech.

“We achieved exceptional performance from the design of our first generation antenna, which enabled satellite tracking and communication from the equator to the Arctic Circle. With plans in the pipeline to make the equipment even more compact, whilst maintaining its high performance, we are pleased to be part of this successful venture.”

Some specialist board makers are also expanding with their manufacturing in Europe. For example, German board maker Phytec is increasing its presence in the UK.

“Now we are refocussing on the UK market because we think there are interesting projects,” said spokesman Axel Berghoff.

The company has revenues of around E18m, E6m from the US and E1m in France and is looking to expand through organic growth at its factory in Mainz.

“We are selling microcontroller modules in quantities of 200 to 15 000 a year into industrial products,” he said.

The company does custom modules depending on the chips being used, from the Freescale i.MX27 and MX31 ARM-based processors for point of sale applications to Marvell’s PA270 Xscale devices.

“Here we really are in the embedded world with microcontrollers like the i.MX31. What we do is enable people to take optimum advantage of the signals the microcontroller offers and if you convert that to a standard connector you lose that benefit.”

All this is encouraging startups to make boards here in Europe rather than in the Far East or China.

CommAgility in Leicester, UK, has just launched its first high performance digital signal processing board. It was formed by four engineers from Loughborough Sound Images last year and has developed an AMC-standard mezzanine board with a Texas Instruments C6455 DSP and Xilinx Virtex-4 FPGA. “We are very good at embedded signal processing and we are primarily looking for OEM deals,” said Ed Young, managing director.

“Based on TI’s high-performance DSPs, CommAgility’s AdvancedMC Module delivers a simple, integrated solution to complex, processing-intensive applications,” said Andy Richardson, European business development manager, TI. “CommAgility was able to go from concept to first deliveries in under six months, demonstrating their technical expertise as well as TI's flexible hardware and robust tool set.”

The company is looking for distributors and partners across Europe to sell the boards, which are made in the UK, and for licensing deals.

“The key thing we are doing is providing the enabling software such as libraries to get the applications up and running quickly,” he said. “We can use Serial RapidIO as well as companies like Mercury can, so we can offer something pretty close to what they offer.”

In this way small European companies are looking to take on global giants, using European manufacturing.

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