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Outsourcing to China without having to go there

Sydney - May 2008

GPC Electronics, one of the largest contract electronics manufacturers in the Australasian region, has developed a manufacturing intelligence capability that creates a new outsourcing paradigm – the low labor costs of China with the management expertise available in Australasia.

The outcome is the ability to outsource to China without having to go there. Everything is managed by GPC Electronics.

Christopher Janssen, Managing Director of GPC Electronics, said, “Our philosophy to outsourcing is about managing the product supply for our customers. Perhaps the biggest challenge for US customers outsourcing to China is the difficulty of communicating with the factory.”

He said, “Our objective of implementing the system in our China facility is to provide a new paradigm in outsourcing – the low labor costs of China combined with the easy communication and low management costs available in Australia. The outcome is overall lower costs without the usual difficulties that customers face when outsourcing in China.”

Processes and supply chain strategies are developed as templates by GPC Electronics’ technical teams in Australasia, then implemented across the company using a “cookie cutter” approach.

The system is based on SAP xMII and captures the manufacturing know-how, engineering solutions and business intelligence created by the company. Once it has been implemented it provides a direct connection between shop-floor systems and business operations. All data that affects manufacturing is visible in real time – including information about orders, materials, equipment status, test results, costs, and product quality.

Many US companies are hesitant to outsource in China because of the inherent risks there, but are compelled to do so because of the need to be competitive. Mr. Janssen said, “GPC Electronics provides the user friendly interface for customers to outsource to China. Our US customers have found that they never need to make factory visits. Our model is to manage it all for them”

It also provides a proven template for the China facility to ensure that the same high quality output is maintained as production is scaled up. China is not known for being very flexible but this system will provide the same level of flexibility and supply chain management that is available from GPC Electronics’ other facilities in Australasia.

The SAP xMII system enables the collection of manufacturing data from across the factory floor and integrates it with GPC Electronics’ SAP ERP system.

It also allows the automation of factory quality systems. For example, circuit boards that fail test or that have not been tested are not able to proceed further along the production line. xMII also alerts engineering staff if processes move outside set limits.

All test data from the factory floor is captured and can easily be analyzed by creating reports within SAP. Information is presented in graphical form from various departments in the company.

GPC Electronics also provides customers with a tailored web portal so that they can track their products via the Internet.

About GPC Electronics
GPC Electronics is an electronics contract manufacturer based in Penrith (Sydney) Australia. Additional manufacturing sites are in Christchurch (New Zealand) and Shenzhen (China). The company produces complex electronics equipment for leading global corporations. Rather than simply following customer instructions to build products, GPC Electronics helps its customers to achieve their strategic goals through greater responsiveness, overall lower cost and improved flexibility.

(Additional information at:

Bradley Ayres
Customer Support Manager
GPC Electronics
61 2 4737-6625