Archived posting to the Leica Users Group, 1999/08/02

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Subject: Re: [Leica] Out sourceing of components.
From: "A.H.SCHMIDT" <horsts@actek.com.au>
Date: Tue, 03 Aug 1999 11:03:49 +1000

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I own a small manufacturing business for electronic control and test
equipment.

My job is, to design and come up with the ideas for the electronic part,
my partners job is to design the mechanics and look after the esthetics.

Once the design and the relevant drawings are finished, the software is
written and the prototype is produced, we sit down and draw up the final
parts list.

The parts list contains accurate information on all the components.
What  material they are made out of, where we source the components from
and who manufactures them.

There is no way, for us, to actually manufacture any of the individual
component in house.
We don't have the neither the extremely expensive machinery or the
expertise to do this.

Other have. We pay them, and employ their labour force, to do it for us.
Cheaper and better than we ever could.

Others produce the printed circuit boards we use, the make the cases for
us, be it plastic or metal. We buy the electronic components. There is
no possibility for us to make an Integrated circuit, a resistor or a
capacitor. But it is in our hands, to buy the best quality we can get
without making the whole unit unaffordable for our customer. There are
always some compromises in real life.
However, we still have full control over the components we buy. How
come?.

Because it is up to us, to pass an incoming part, or to reject it, if it
does not meet the specifications we set. It is up to us, to make sure,
our QA is on the ball. Problems with suppliers can happen, but we are
the once responsible for either passing or rejecting them
them.

Finally we assemble the components we buy in to a finished unit. But we
don't just assemble it. We have to setup the correct operating
parameters, we have to these the operational capabilities of the unit
and we have to make sure, that the assembly process is up to scratch.
This means checking the quality of the soldering, the tightness of the
fasteners (screws bolts and nuts etc.). We have to make sure it looks
like new, when it leaves the factory. We also have to supply an
operating and service manual. Those manuals are authored by us, but we
don't print them. This is done outside.

Having said all tat, I do consider the finished item to be manufactured
by my company.After all, my company supplied the brains and know how and
test of the complete design.

It only makes sense, for Leica in Solms to do it in a comparable way.
The reason E.Leitz made all in house, is, I assume, a left over from the
early Microscope manufacturing days.
In those days, It was not easy to out source components. The only way to
make things to the accuracy required, was to do it in house. Often the
machinery was so specialized, that it also had to be build in-house.

This was possible for various reasons: Labour was cheaper, there was
less competition and the component tolerances where not as tight as they
are not.

It is not possible today, to manufacture everything in-house, and to
stay in business. this may not apply to giant size companies as much as
to the small or medium businesses

But even the Ford or GM don't make their own axles, differentials,
lights or generators in house anymore. They out source.

I still consider a Leica camera,  made by Leica.

Regards, Horst Schmidt


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<HTML>


<P>I own a small manufacturing business for electronic control and test
equipment.

<P>My job is, to design and come up with the ideas for the electronic part,
my partners job is to design the mechanics and look after the esthetics.

<P>Once the design and the relevant drawings are finished, the software
is written and the prototype is produced, we sit down and draw up the final
parts list.

<P>The parts list contains accurate information on all the components.
What&nbsp; material they are made out of, where we source the components
from and who manufactures them.

<P>There is no way, for us, to actually manufacture any of the individual
component in house.
<BR>We don't have the neither the extremely expensive machinery or the
expertise to do this.

<P>Other have. We pay them, and employ their labour force, to do it for
us. Cheaper and better than we ever could.

<P>Others produce the printed circuit boards we use, the make the cases
for us, be it plastic or metal. We buy the electronic components. There
is no possibility for us to make an Integrated circuit, a resistor or a
capacitor. But it is in our hands, to buy the best quality we can get without
making the whole unit unaffordable for our customer. There are always some
compromises in real life.
<BR>However, we still have full control over the components we buy. How
come?.

<P>Because it is up to us, to pass an incoming part, or to reject it, if
it does not meet the specifications we set. It is up to us, to make sure,
our QA is on the ball. Problems with suppliers can happen, but we are the
once responsible for either passing or rejecting them
<BR>them.

<P>Finally we assemble the components we buy in to a finished unit. But
we don't just assemble it. We have to setup the correct operating parameters,
we have to these the operational capabilities of the unit and we have to
make sure, that the assembly process is up to scratch. This means checking
the quality of the soldering, the tightness of the fasteners (screws bolts
and nuts etc.). We have to make sure it looks like new, when it leaves
the factory. We also have to supply an operating and service manual. Those
manuals are authored by us, but we don't print them. This is done outside.

<P><B>Having said all tat, I do consider the finished item to be manufactured
by my company</B>.After all, my company supplied the brains and know how
and test of the complete design.

<P>It only makes sense, for Leica in Solms to do it in a comparable way.&nbsp;
The reason E.Leitz made all in house, is, I assume, a left over from the
early Microscope manufacturing days.
<BR>In those days, It was not easy to out source components. The only way
to make things to the accuracy required, was to do it in house. Often the
machinery was so specialized, that it also had to be build in-house.

<P>This was possible for various reasons: Labour was cheaper, there was
less competition and the component tolerances where not as tight as they
are not.

<P>It is not possible today, to manufacture everything in-house, and to
stay in business. this may not apply to giant size companies as much as
to the small or medium businesses

<P>But even the Ford or GM don't make their own axles, differentials, lights
or generators in house anymore. They out source.

<P><B>I still consider a Leica camera,&nbsp; made by Leica.</B><B></B>

<P>Regards, Horst Schmidt
<BR><B></B>&nbsp;</HTML>

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