Running on the spot
Globally, the telecoms market is not short of growth but neither is there a shortage of competitionÔÇönot to mention pressure from customers, as Alan Swaby learns.
ThereÔÇÖs very little chance of a quiet life in business. Even when you think things are going sweetly, thereÔÇÖs something lurking just around the corner, waiting to take a bite out of you.
Take Efore, in Finland, for exampleÔÇöin business since 1975 and although not in the top league in its industry, operating successfully nevertheless as a respected provider of power supplies, especially in Scandinavia. And then almost overnight, the mobile telecommunications industry goes into overdrive and Efore, like everyone in the business, has to start running faster just to stay in the game.
ÔÇ£The entire structure of our business,ÔÇØ says sales and marketing executive vice president Ilkka Starck, ÔÇ£has had to change. Once we proudly and profitably produced our products in Finland but that is simply out of the question these days, if you want to remain competitive.ÔÇØ
The products in question are power supplies, designed to convert mains electricity into whatever specific format is required for the device being powered. Although Efore does make equipment suitable for the USAÔÇÖs 110V and EuropeÔÇÖs 240V domestic supply, the majority of applications are electronic rather than electrical and as such, work on much lower voltages, as well as delivering DC currents rather than AC.
ÔÇ£Our speciality,ÔÇØ explains Starck, ÔÇ£is supplying power supplies for mobile network base stations. Last year, for example, two thirds of our Ôé¼64 million revenue came from the telecoms market, with the remainder coming from industry and health applications. We compete well in telecoms because we are fast and flexible and able to develop highly efficient products in short order. But we canÔÇÖt do it with a Finnish manufacturing base.ÔÇØ
These days, Efore has two manufacturing plantsÔÇöEstonia for markets closer to home and China for the burgeoning Asian and global market. Both are modern plants using state-of-the-art assembly robotics and are about as efficient as can be. The layouts are clean and uncluttered with operatives having nothing more in their vicinity than the parts needed for the job in hand.
Efore has effective agreements with suppliers of the myriad components needed which enable parts to be fed into the production line reliably and not a moment before they are needed. Both offshore plants have been designed around the lessons learnt from 30 years of manufacturing in Finland and are comfortably producing products by the thousand or tens of thousand.
But the mushrooming growth of networks in Asia means it is no longer possible to rely entirely on a system of design in Finland and manufacture in China. These days, much of the development work is also carried out there by Chinese engineers trained in Finland.
ÔÇ£Power supplies are very complex,ÔÇØ says Starck, ÔÇ£and designing them ideally calls for many years of experience. As you can imagine, finding such qualified people is not so easy. We have to invest considerably in training more junior engineers to take a greater share of the overall responsibility as quickly as possible. We have a regular flow of engineers from our China operations visiting us.ÔÇØ
With nothing in the way of standard products and everything needing to be custom built, a typical project to supply a base station power supply might have a timescale of up to six or nine months from request to tender to the product rolling off the production line. EforeÔÇÖs 35 years of manufacturing history and a library full of modular designs help to compress the development process; but it still needs to go through the various stages of prototype and testing even before consideration can be given to manufacturing needs.┬á
And thereÔÇÖs little respite. The rapidly growing demand for mobile communications is placing huge pressures on suppliers such as Efore to find ways of compressing the process even further.
Equally demanding is the cry for ever more efficient products. Efore is working hard on improving the overall effectiveness of its products, some of which are already 94 or 95 per cent efficient. There will always be some loss during the energy conversion process but Starck feels there is still more that can be squeezed out. ÔÇ£ItÔÇÖs not going to come from radical new technology,ÔÇØ he believes, ÔÇ£but from better layout and design of components weÔÇÖre already using.ÔÇØ
Efore has also expanded the scope of its supply to include maintenance and service as well as manufacture. ÔÇ£By providing the complete offering,ÔÇØ Starck says, ÔÇ£revolving around competitively priced products, we are securing the loyalty of customers by eliminating the need for them to look elsewhere.ÔÇØ
Although the technology required for power suppliers per se already exists, EforeÔÇÖs engineers are nevertheless not short of new intellectual challenges. Because much of the network growth is going into remote areas where electrical grids are sparse and unreliable, there is a great need for power supplies able to work with renewable sources of energy such as solar and wind. ItÔÇÖs not in the business of converting sunlight into electricity but there is tremendous potential for Efore when it comes to controlling solar power.
Similarly, the growth in hybrid automotive vehicles presents equally attractive opportunities. ÔÇ£On a recent trip to China,ÔÇØ says Starck, ÔÇ£it became apparent just how many new players there are entering this market. But hybrid vehicles will only take off providing the prices are right and a suitable re-charging infrastructure is in place. But we are ready with the power management equipment these cars will need.ÔÇØ
One way or another, Efore is gearing up for expansion. Simply being linked to the growth in Asia could mean a doubling of its manufacturing output in China and as those facilities are already working 24/7, itÔÇÖs clear that another tranche of investment there is on the agenda.
It would be understandable for Efore to welcome a slower pace of life but thanks to the markets where it operates, itÔÇÖs not going to happenÔÇöso the lesson it is learning now is how best to manage the whirlwind it is in.
