Hamworthy’s Operations Director Terry Mahoney and Buyer Stephen Allen will explain how Hamworthy has developed a successful sourcing network for stainless steel fabrications and investment castings, and how this is supported by dual sourcing from UK suppliers. He will also talk about how Hamworthy is now starting to source electronic control systems from China too – a direct result of attending a seminar at Subcon 2007.

As Terry Mahoney explains, “Around four years ago one of our design engineers had sourced a fairly crucial part for a new product through the internet from a Chinese trading house. It was pretty important for us, so we thought we had better check the supplier out. Through some business contacts I was put in touch with a Chinese consulting engineer and went with him to check out the supplier. We weren’t satisfied with them and relocated the part to another company that he knew. That went well and we soon started to put more work out to China and gradually built our network of suppliers through recommendations and word of mouth. And, contrary to received wisdom, you don’t need to have high volumes. Sometimes we are buying just 200 to 300 pieces a year, but it is still worth our while doing it and still worthwhile for the Chinese supplier.

He says that one of the key lessons learnt has been that you can’t do it on your own without someone on the ground in China.

“One of the things our man does is to make sure that we are paying ‘Chinese’ prices, rather than the prices the Chinese manufacturers think will prevail in Europe. To make it worthwhile you have to be purchasing at no more than 50% of the ex-works price you would pay to a European supplier because there is a lot of cost involved in sourcing parts from China.

“China is more like a continent than a country. If you have one supplier on, say, the North East coast, and another down near Hong Kong, you can spend all your time on internal flights. What we have done is settled on one location, Ningbo, a large manufacturing town and port, and found all the companies we need there.”

To ensure continuity of supply Hamworthy dual sources all its components in China. And it also sources around 30% of each product from its UK suppliers to allow it to be responsive to customers and to even out peaks and troughs in demand.

“We are a fairly-low volume manufacturer, but we offer our customers flexibility and a very wide range of products. Literally, and without any loss of efficiency, the next boiler we make could be anything in our range. We can receive an order for a £30,000 boiler today and build it and ship it on the same day. So as well as needing them for security of supply, we also need our UK suppliers for flexibility. Parts from China are on a long lead time, but our UK suppliers can deliver the day after tomorrow if we need them to.”

To find out more about the Subcon seminar programme, register for your ticket and book your seminar places please visit www.subconshow.co.uk .