A Sign of the Times??

Is this a sign of the times? Is the China tale over, with issues of quality and cost now rapidly appearing. Even Australian manufacturers such as Fisher and Paykel opted to use Thailand rather than China in recent times for off shore manufacturing.

Manufacturers bringing die casting back home
3 March 2009

A RECENT survey conducted in the US shows American manufacturers are turning their backs on Chinese die casters and bringing their work back home.

The North American Die Casting Association (NADCA) reports that a recent survey of its members reveals a significant majority, 78%, have evidence that buyers of their products are shifting to domestic sources for diecast components. The survey identifies three reasons for these shifts: buyers’ concerns about the product quality, supplier proximity, and overseas logistics.

Daniel L. Twarog offered examples from NADCA’s survey of diecasters’ indications that their businesses are benefiting from broad-scale changes in the industrial supply chain.

Milwaukee-based Stroh Die Casting sales manager Andy Stroh indicated to NADCA that OEMs want to locate domestic suppliers because they have trouble with the quality of imported diecastings. "One company has talked to us about bringing some parts back — particularly plated or painted parts," he said. "Poor packaging results in parts getting damaged during shipment." Stroh also confirms the observation that domestic manufacturers increasingly prefer nearby suppliers. "We are tooling up an aluminium diecast part for a company in Green Bay, WI, that was previously made in China," Stroh explained. "The customer had quality issues with the part and difficulties relaying part changes effectively. That's why we got the work -- because of our proximity to the customer, understanding of their needs and our willingness to build the new tool quickly."

Proximity to suppliers may be a determining factor for OEMs because delivery raises cost and production time. Together, these increases may eliminate any savings from offshore production.

Chicago White Metal Die Casting president and COO Eric Treiber confirmed both trends. He indicated to NADCA that his company was awarded some contracts both because of quality issues and proximity concerns with offshore diecasters. "We have, within the last year, produced castings that were previously sourced offshore," according to Treiber. "It is our understanding that two magnesium castings we produce, which were previously sourced offshore, were brought back to the U.S. for reasons of quality and proximity of the supply base."

Another diecaster revealed that his company is now producing an order for about 500,000 zinc components that had been manufactured in China.

The reason, "Metal costs fluctuated in China, and suppliers would not take orders at prices that had previously made them competitive. Adding increased transportation costs, you can see how the trend changed. At our plant, we remained tooled and had machine capacity at our U.S. plant to be able to absorb the work without any capital outlay."

While acknowledging that the diecasting industry “is facing its share of challenges during these economic times,” and that diecasters must take necessary steps “to maintain a profit and stay afloat,” NADCA president Twarog concluded from these and other examples that “good news seems to be on the horizon.”