The falling Australian dollar means it's becoming more expensive for Australian manufacturers to source components and parts from overseas.
But just how it is costing compared to local specialists is unknown – unless you ask.
The Australian dollar peaked at 1.10c in mid 2011 against the USD, but has recently seen lows of .77c to the US dollar.
This means importers have seen a 30 per cent increase in costs in round terms, as well as rising labour costs in Asia.
Australian metal stamping and pressing specialist Swift Metal Services, advises local manufacturers to explore all avenues in Australia before placing their next order for products or parts offshore.
Swift Metal Services clients, who use both locally and imported componentry, say “nasty surprises” can await those who simply place repeat orders overseas without taking currency devaluations into consideration.
Swift has repeatedly shown that short to medium runs of pressed steel parts, metal componentry and stamped components can be manufactured in Australia for similar nett costs to imported parts.
Aside from the costs, Australian made metal components, produced on high technology machinery, can be supplied on considerably reduced lead times and with greater accuracy and more consistent quality, than imported components.
Swift says Australian manufacturers need to consider the overall cost cycle when using imported parts.
In addition to the exchange rate fluctuations, costs that may not be obvious include freight (including road freight from wharf to customer), international payment charges, import duties, customs processing charges, additional warehousing expenses and increased inventory required to ensure imported parts on inevitable long lead times don't adversely impact production.
Apart from cost considerations, problems often occur when parts or metal components arrive faulty or out of specification.
Swift said from experience, firms that have trialled importing components from countries with lower labour costs than Australia, invariably receive a batch of faulty parts – often after two or three shipments of good components.
The secret to producing quality Australia components is investing in latest and most efficient machinery, investing in training staff and utilizing LEAN manufacturing techniques.
Contact Swift Metal Services to see whether your imported parts are affecting your bottom line.
Swift Metal Services
Ph: 1800 626 525