Companies Move Back to Europe for Subcontracting Work

One of the, perhaps, unexpected outcomes of the current financial turmoil is a move from China back to Europe for subcontracting work. Several factors have driven this such as currency fluctuations, decrease in demand resulting in Chinese factories closing and the need to have even tighter control on inventories without the huge shipping lag from China.

However, according to electronics sub-contracting firm, Samec, who are based in Northern Italy, the key factor is the drive for quality that has seem the company’s order book grow over the past few months. “Unless you are large enough to have your own quality team in the factory in China, you are likely to have quality issues,” explained Mario Casella, Samec’s CEO. “The Chinese subcontracting industry is still very young and it does not have the decades of experience and discipline of quality that European companies do.”

Traditionally, Chinese factories’ greatest strength was cheap labour but as there is very little labour required with the latest SMD lines. Samec, which runs four SMD lines, reports that they are usually within 10% of the prices quoted by their Chinese competitors – a margin that is eroded to near parity once the extra shipping costs from China are factored in.

“European customers also welcome the fact that they are dealing with a subcontractor that is in the same time zone and only a short flight away should any issues arise,” added Casella. “Ours is a family business with 30 years of experience to draw on so we can quickly spot problems and solve them before they become an issue.”

Samec is located in Schio between Milan and Venice in the heart of Italy’s industrial area which enables Samec to draw on and co-ordinate third party services such as injection moulding to provide an even more complete service from board to finished products. The company has even started a logistics division that can despatch products to end users. “We aim to be able to provide as complete a service as the customer wants,” concluded Casella, “so that they can focus on their skills sets of design, marketing and sales, secure in the knowledge that their products are being built to high standards.”

More information: Samec