Located in South Wales, Axiom Manufacturing Services is a leading UK contract electronics manufacturing (CEM) company providing manufacturing solutions to companies within the medical, industrial, defence and aerospace market sectors. Steve Wilks, commercial director added: “Axiom has grown substantially to become one of the UK’s main CEM companies. We have grown five times in five years, in the run up to the end of 2006, to just under £20m.”
Steve went onto to explain the recent evolution the company has been going through. “Traditionally we have been involved in industrial and medical markets, which have been very strong for us. However, this year we started to look at the defence and aerospace sectors as we could see that the requirements of the MoD were changing in a way that placed more value on Axiom’s range of capabilities and our focus on high quality and lowest cost of ownership.”
Axiom already worked to extremely high quality standards, a fact that was reinforced when it came to the AS9100 accreditation audit. “Aerospace Wales Forum told us that the AS9100 standard was essential if we wanted to supply aerospace companies, and that this could take six months to a year to attain. We booked an audit for the next week and with some preparatory work we secured the standard in under a month. To me that illustrates what the company is like, it really does have a strong underlying quality capability.”
Achieving this standard paved the way for Axiom to enter the defence and aerospace markets, and this has already reaped dividends as Steve confirmed. “We have already taken on two customers, and by quarter one of next year I estimate these sectors may account for 20 per cent of our business.”
The period from 2001 to 2006 saw major growth for Axiom, and at the end of those five years the company decided it was time for a restructure. “So we took a step back and acknowledged that for the next phase of growth we needed to have a slightly different configuration and different level of skill. We believe you can grow fast but that there will be a point when you suddenly fall over, and we didn’t want that to happen to us in 2007,” said Steve.
“As a result we have boosted our management team and brought in some new people, all of which has been designed to ensure we are ready for this new phase of expansion. We anticipate huge growth going forward, but we had to make sure we were ready for it and this process has gone very well.”
In fact, Steve’s position was one of the new, key appointments made by Axiom in July 2007. He has a 25-year track record in electronics manufacturing services, having worked for several major firms including TES Electronic Solutions, Celestica, ICL and Hitachi. In that time he has also developed vast experience and knowledge working in markets across America, Europe, Japan, and China. “I look after all the commercial activities for Axiom, which involves sales and marketing, current account management, pricing, contracts and most of all developing services in line with customer demand.”
He continued: “I came to the company almost by accident, as an ex-colleague of mine had joined as the supply director and mentioned there was a potential vacancy. I didn’t know much about Axiom, so I decided to come down and have a look and once I saw the potential here and met the management team, it seemed absolutely right to leave what I was doing and join – and it has gone fantastically well!”
Alongside the new staff, the company has also invested in sophisticated new equipment, to further enhance its existing quality, manufacturing and test capabilities. The new equipment, including a stateof- the-art surface mount technology (SMT) line, a digital x-ray inspection system and a flying probe (fixtureless) test system, enables Axiom to fulfil its aim of providing the ‘total solution’ to its customers. “In terms of the logic behind this investment, again it was partly to make sure we had the right capacity, capabilities and skills, but also about developing more services.
“For example with one of our new machines - which does reduce costs because it runs faster - what we focused on was ‘does it offer other benefits that our customers really care about?’ The answer is yes, because it also gives us much better tracking of components, more flexibility and helps us reduce our changeover times. This has been assisted by our use of Single Minute Exchange of Die (SMED) - a lean production method for reducing waste. Following this process has reduced our changeover time from six hours to 20 minutes, which obviously has huge implications for the shopfloor.”
This isn’t the only lean technique that has been embraced at Axiom. “We’ve been adopting these practices for many years,” agreed Steve, “including areas such as Six Sigma, value stream mapping, single piece flow and we have introduced kanbans with some customers. All of these ideas have a significant effect on our efficiency and competitiveness.”
And competition is something that Axiom has to consider, especially as increasing numbers of products are being outsourced overseas to low cost areas. “You certainly have to understand who your customers are and what they are looking for as these low cost areas have a lot to offer for particular kinds of products,” said Steve. “We have to compete with that, in terms of what our offering is and we have to ask ourselves ‘what value do we bring to any particular customer’ but provided we get that right then I think there is still a very big market for us.
“The trend of globalisation hit the EMS industry in around the year 2000, and everything started to move east - now that same trend is hitting other areas of the economy. This means that everyone is asking ‘how do I differentiate myself?’ and we have to do that ourselves and also help our customers to do the same. So we help them to think about total cost of ownership, provide innovation or new services in a way that they and also their end customer will benefit from.”
He continued: “We see the EMS market as quite buoyant, but only if you are offering the right kind of service. For those companies in the traditional EMS market of what you might call ‘build to print’, companies in the Far East can do that very well, so they could struggle. But providing you are changing yourself and adapting to the market I see lots of growth out there.”
Steve also raised an important point about manufacturing overseas. “As more and more products are being built in the Far East we have to consider the repair loop – it has huge environmental implications – and also the sheer time it takes to transport a product from, for example, China is a problem. We have had a situation where a customer has come to us with 40,000 boards and said ‘we need this modification done’ because issues had arisen while the products were on a container crossing the ocean. Because of our background we are very skilled in undertaking fast-turn mass rework at low cost and hence mitigating one of the downsides of having such a lengthy supply chain.”
When Steve mentioned the environment, I took the opportunity to ask him about Axiom’s environmental credentials. “The environment is a big part of our overall quality process, and we look at it from both a green point of view and from a local community perspective. This means we put a lot of work into local schools for example, while on the green side we were the first company in Europe who gained IPC certification for the RoHS legislation, and we have now helped a lot of customers through full RoHS reviews. In addition we have also been actively looking at our own carbon footprint in all of those areas.
“I think that the environmental side will start to have a larger and larger impact,” he continued, “if we started to send products all round the world then it has an impact on our carbon footprint and sooner or later someone is going to focus on that, which will mean local manufacture, or certainly, local configuration, repair and aftermarket services will come much more to the fore.”
Steve also noted that customers not only look for quality and environmental considerations, but they also want consistency from their suppliers. “It is quite easy to have a one-off quality drive but what you really need to do is prove over a number of years that the quality and the engineering support will always be there. What we try to build at Axiom is the ability to be totally consistent and stay focused on the quality at the same time as being able to deliver the engineering front-end and supply chain services as well.”
This consistency in supply is something that Steve feels passionately about. “If I have two words of advice to European manufacturers, I would say that they are consistency and innovation,” he said. “And it is trying to balance the two that is the challenge. It is always important to come out with new services, new products and new ideas, and constantly develop yourself, but at the same time you have to make sure that the core consistency of what you have is there all the time, because that is what your customers come back for.
“All of the services you offer customers have to be consistent, and that is one of our major strengths, as we have gotten to know our customers, which means we can really help them to improve their products by either taking cost, risk out or improving flexibility – but all of this is about consistently working with customers over a period of time. We have less than 20 active customers, but we have very strong relationships with them and we are looking at that going forward. So rather than anticipating adding huge numbers of customers to achieve our growth targets, we are looking more at developing relationships.”
Steve also had a surprising piece of advice – sometimes its better for the company to turn customers away. “You have to ensure there is a culture match with your company, and sometimes you have to walk away from business because you know in the long run it won’t work even though the figures might look nice. Of course this can be very hard if someone is offering lot of money, but I learned early on that its foolish to accept business that you know is going to effectively destroy your operations because you can’t cope with it - then nobody wins.”
As Steve mentioned, innovation is a key focus at Axiom and the company is expecting to announce another new service in the near future. “We are partnering with one of the major design and development technology companies in Europe and also with another design partner to be able to offer design services to our customers to the point where we can offer products,” he said. “That means innovative products, not just where our customers come along and say ‘here is my design and my outline, can you do some backend services’ - this service means we can sit down with our partners and our customers and create new innovative ideas for products. This is something that I think is going to be very successful and we are looking to take that to the market in a big way in quarter one of 2008 - we are starting to put feelers out with customers now.”
