Like many manufacturers, Diamond H’s profitability was being significantly affected by a combination of sales price erosion and rising costs. The company found they were unable to justify a significant level of investment in automation which left them with the only viable option being the establishment of production in a low labour cost country.
The company took the decision to establish manufacturing operations in Shenzhen – outsourcing the whole operation – from tooling, parts procurement through to full assembly and test.
As a manufacturer of complex, safety and performance critical parts for the worldwide white goods industry this aspect of the project led the sourcing team to find and audit a wide range of suppliers in the Pearl River Delta – from diecastings and plastic injection moulders to turned parts and machined parts suppliers.
In all, over 400 components were sourced, approved and procured on their behalf.
Over a 2 year period, Diamond H moved the whole of their production from the UK into the Longgang plant.
The transfer also required approval of the plant by Industry Speciific Approval bodies – as Diamond H supplies electrical and gas components for domestic cooking appliances this required BEAB and QMS approval of the Longgang factory.
In 2006 all of Diamond H’s UK production - UK activities are now focused purely on Research & Development, logistics and customer support.
Their production costs are competitive, and the company has moving into profit for the first time in over three years.