Unable to halt the consignment, Elite ended up sitting on 20 months of stock, instead of the normal month or two, hitting the company’s cash flow just as the financial crisis was at its worst.
Elite, whose customers include Caterpillar, Chubb and Tyco, also says the sheer physical distance of having production on the other side of the world causes difficulties. “We seemed to have to go out there every time there was a problem, if we wanted to make a change or prototype,” Mr Balfour said, adding that travel costs soon racked up.
“Also, it’s very difficult to figure out what a customer wants in 20 weeks’ time [the normal delivery period] and a product arriving a week or two late could leave us sitting on months of stock.”
Logistics simply exacerbated Elite’s troubles, he added. “You’ve got to find a ship, get the product on to it, get it through customs – we could have consignments sitting in a port for weeks… It was tiring.”
Having invested in more efficient equipment at its Enniskillen base, the decision was made to reshore and the company now employs 185 staff in Northern Ireland.
Elite found itself swept along with the widespread desire to cut costs, no matter what, before the financial crisis hit, according to Mr Balfour.
“Low cost was the big phrase of the time,” he said. “All our customers were saying ‘China, China, China, we’ve got to get into China’. We were riding the wave and a few years later we found out the real cost the hard way.”
He advises any company considering moving manufacturing or extending its supply chain abroad to take a “long, hard look “at the costs and benefits. “We did a fairly rudimentary analysis,” Mr Balfour said. “And two to three years later we found out the true cost the hard way.”
