600 Group is dropping investment in China sourcing

Filed in archive News on July 31, 2009

Machine tool manufacturer 600 Group has pulled back from outsourcing production to China because of the poor levels of quality and consequent warranty claims, Global Supply Chain Council reported.

Quality problems have led 600 Group to drop its stategy of sourcing from China Releasing details of its recent significant restructuring and new product supply arrangements CEO David Norman said: "At the time of my appointment in August, it was clear that both the cost infrastructure of the Group and the machine tools' supply chain were in need of urgent attention. Considerable action has subsequently been taken and continues to be required to effect transformational change within the Group's operations, whilst concurrently taking additional defensive actions in light of depressed market conditions."

He added that the company has also moved to a simpler business model which supports its commitment to manufacturing and supplying high quality customer focused products.

Previously a significant feature of the Group's strategy was the outsourcing of a large part of production and supply from China. Regrettably, says the company, the levels of quality originally envisaged were not achieved and, despite a major effort by the engineering and quality teams, the result was an unacceptable level of warranty claims. Mr Normal says that under these circumstances the supply chain was re-engineered and new outsourcing arrangements were put in place, resulting in a return to historic levels of product quality.