Have you taken a look at your supply chain of metal components lately? I have two questions you can ask yourself.
First, you should take a look at the manual tasks in the production. Following questions:
- Where do you produce your metal parts? In Germany, another European country, or a country in Asia?
- How many man-hours go into making a part? I.e. how many manual steps are required to manufacture the product?
A good example
You have a consumption of metal handwheels of 30,000 per year.
In an 8-hour working day 6 employees in your factory produce 1,000 handwheels.
- Step: A round part is punched.
- Step: Outer contours and central hole are cut.
- Step: Outer and inner contours are drawn.
- Step: Inner holes are punched.
- Step: Inner and outer contours are rolled.
- Step: Drainage holes are punched in the rim.
With an hourly wage of EUR 20, the wage for 1,000 handwheels is EUR 960.
Multiply this with your annual consumption and it becomes 28,800 EUR (0.9 EUR per metal part).
Imagine that you imported the handwheels from Vietnam instead. Same example only in Vietnam.
The hourly wage is typically 4 EUR. It may sound low but it is standard in Vietnam (in fact we pay our employees a slightly higher salary than competing factories to keep our skilled workforce).
Salary 4 EUR x 6 employees x 8 working hours = 192 EUR for 1,000 handwheels.
With an annual consumption of 30,000, it becomes a total of EUR 5,760 (EUR 0.192 per part).
If you move the production to Vietnam, you save 80% (23,040 EUR) on annually salary costs.
There are of course additional shipping costs, after all, the route is from Vietnam long. You can count on shipping costs of 0.5-8% of the unit price per component. Despite these increased freight costs, you save a lot.
Don’t worry about customs. In the EU we have a free-trade agreement with Vietnam.
With support for the practical circumstances, e.g. communication with the factory, order tracking, logistics, etc., you don’t have to worry about the quality. With a proper network, the metal components are of the same high quality as in EU.