Import substitution in action: Russian manufacturers are leaving China for Home

Among the “pioneers” — scientific-production Association “Design Bureau of Datacom”, which since 2011 has been developing, and from the middle of 2015 and in Russia collects its premium car DVR. Vladislav Mekhantsev, chief designer and head of the NGO “Datacom KB”, shared his story of return. The theme of the DVRs we have been doing for over six years. Today, our business model is a self — developed expensive top-end devices with a large set of unique engineering know-how.

Team design Bureau without stopping generates and implements new ideas to improve our models. Over the last device marks, the Registrar Datakam G5, the work is being done for the past three years. Most of the unique G5 chips we invented ourselves, just imagining what is missing in modern recorders. The idea of support of two memory cards with video recording capability for each of them, it would seem, lies on the surface — but to us no one had thought to implement it.

Very helpful feedback. Multiple functions prompted us ordinary users. For example, encryption of records by password — to the jealous wife or crafty competitors could not learn where the user goes and what talking on the phone while driving.

We choose and from G5 was designed, they themselves wrote all the software. Even the media player app has been created by our programmers. Counterparts, which would not ruin video quality when cropping, automatically updated BY Registrar worked with the maximum number of devices (not only our, but also other brands) just no. Given that our registrars devices in the premium segment, we added support for Mac. Prior to that, none of the software developers to work with DVRs about the convenience of users of Apple products havent even thought of.

All focused on Windows users. Our latest model Datakam G5 implemented 22 of the unique Russian engineering know-how — our own inventions that the Chinese cannot copy at all desire. It is very expensive it is too difficult and time. Try to find on AliExpress the Registrar with a bitrate of 20 Mbit/s, “spy microphone” with a sensitivity of 40 decibels (perceptible to even a whisper next to the machine!) or “instant” mount neodymium magnets — and see for yourself that analogues of our products in China, there is simply no. The history of the development of some unique elements — for example, a removable blendability, which removes the glare and the glare from the windshield, is published on the website.

We believe that the current stagnant market for portable electronics there are only two ways forward. Mad price dumping (which is, in fact, the sale of the worst cheap crap) and offer the market something truly unique, with special chips. In General, you need to produce and sell something that no other. And, in fact, to justify a higher price tag, which allows you to earn a proper living and to develop the business even with relatively small production volumes.

Initially we went the first way (price dumping), but quickly realized he was a dead-end. Until 2011, the work was done on a standard for Russian business scheme. Resell under your own brand DVRs, which made the Taiwanese factory Transfluent (she, by the way, produces registrars DOD).

When Transfluent moved production and development on the Chinese mainland, product quality has plummeted (although the price tag has dropped significantly). But we already knew that this is the beginning of a journey to nowhere, and find other partners. In parallel began to delve into the development process, to offer Chinese partners some own ideas and solutions to improve product. And for the past four years implementing the second of the above models of business and make a unique, albeit expensive and still relatively small volumes.

In the end, we realized. To stand out from the crowd covering the shelves with cheap Chinese consumer goods of the same type, need a really unique product. It was formed by a team of engineers and other professionals, so that the “Datacom” from a purely commercial (read: shopping) of the company has become a scientific and design Bureau with its “brains”, with their expertise development. But for some time we by inertia have continued to work under contract scheme.

The recorders were developed by our Russian engineers in Moscow and Taiwan, and production gave way — under contract in Chinese factories. The experience was, frankly, negative. And we are not talking about platitudes such as delay of delivery, marriage, or poor build quality, is working things faced by all who deal with electronics Assembly in China. Case in principles of business and respect.

It is believed that for Chinese enterprises to deceive European partners — Holy tradition. They have no motivation to create something really cool and to make it far more interesting to deceive, palm off something cheap under the guise of an expensive or even usurp someone elses original design, stupidly copying and selling on the side of your competitor. For the fourth year in Russia under the brand name of our former OEM partner and current competitor sold by the Registrar, who invented personally, I.

When one of the Chinese comrades once again trite stole our project, we decided to consider the topic of contract manufacturing in Asia and finally closed to make the device on your own. Started with finding a suitable site for Assembly shop. Circled almost the entire planet. Malaysia, Philippines, China, Taiwan, Korea, Japan, USA, Europe — all States where there is a possibility to establish the normal electronics and to obtain consistently high quality products.

Initially, Assembly production posted on Taiwan. Organized his own workshop where he worked hired Taiwanese workers under the strict supervision of our Russian engineers. To collect in Taiwan was profitable. No duties on import of components, all the component manufacturers under sideways.

Some engineers worked in the Moscow office, the part near the production, in Taiwan, to continuously control the Assembly process and the quality of components supplied by partners. After last years sharp rise in the dollar, it became clear that Assembly production in Russia is not only more “Patriotic”, but corny and more profitable. And its not tax burden.

The amount of duties and taxes does not become much less than it was during our Assembly in Taiwan. There was another reserve for savings. Money that would have to pay 50 employees in Taiwan, in Russia today it is possible to hire 100 people. And instead of 5 000 registrars in a month to collect 10 000.

. The math is simple. The cost of renting space in Moscow are the same as in Taiwan, but the salary of a collector in Taiwan twice. Yes, “cheap labor in Asia” — has long been a myth. Further.

Working abroad Russian specialists (engineers, designers) have to pay more. Otherwise it can easily entice competitors. But talented, knowledgeable and dedicated professionals are our most valuable asset. The salary of assemblers, engineers and designers is 30% of the cost of each Registrar.

Move Assembly plant in Russia has reduced this amount by half, that is, roughly speaking, 15% of the cost we are saving. And it is very useful, because components rose significantly, and the components we essentially never save. The quality may fall. Trouble finding collectors in Russia.

10 jobs at our Assembly line with a salary of 35-40 thousand rubles were 200 applicants. Two hundred. And it is in Moscow.

When recruiting staff we did not look at education, it is much more important — the ability to work with head and hands. On one of the stages of selection we were just given a man a screwdriver and DVR. “Assemble and disassemble!”. Many dropped out almost immediately.

Some of the shots did not even know how to hold a screwdriver. But in the end managed to recruit such people in Taiwan do not find, what is called, in the afternoon with fire. Motivated, proactive. From them we regularly receive suggestions and ideas how to make the product and the production process is even better. And, of course, to find a common language with compatriots much easier.

That, in turn, positively affects time. The main difficulty faced in the transfer Assembly on the territory of Russia — import duties on components and delays. Even a simple weekly due to the fact that on departure from Taiwan, or at the entrance to Russia is blocked by a lot of components, very expensive.

Roughly speaking, two weeks, nothing to make it is to lose an amount equal to the cost of a six-month lease Moscow office. But we got the flexibility to satisfy the demand, because of the steel closer to the customer. In the current lineup of our registrars — Datakam G5 — there are eight models that have approximately the same base, but different bundle and some separate items.

For example, optics. Models City wide angle lenses on some of the lanes (this option is best used in the city), models of the Real — “long-range”, reading rooms auto from 20 meters, but with narrower viewing angle (which is better to use for high-speed traffic on the highway). We import universal parts and collect various modifications to meet current demand. So much City and so much Real, so much in the maximum configuration, the amount in the base.

If some wholesaler have a request for a batch of specific models in a specific configuration, we can collect all for one or two days and quickly deliver the desired amount of registrars. The stock is nothing, therefore, we do not “freeze” the money and use the extra storage space. We almost do not work with retail chains. There is no desire for free to lend to large retail, giving them the device and only after three to four months to get a refund.

The ever growing giant of a grace period of major Federal networks have become a real scourge of our industry. Again, it is forever growing appetites of inefficient retail chains is stimulating demand for the slag cheap consumer goods and to produce and sell through a network of really high quality is just not profitable. But we built our own dealer network, and the unique chips of our product has allowed relatively small means to create fame on the market, to include the word of mouth. So our customers go directly to the stores and in the Internet not just for any recorder, specifically for our product Datakam for registrator.

The consumer deliberately makes the choice in favor of our devices and still finds places where our registrars presented for sale. As a result, our dependence on a specific channel of sales has dropped significantly. We can afford to do without large supplies the Federal network. Datakam and so, via the Internet, will buy.

Now all that time to produce, is sold instantly and at zero. So we significantly save on the warehouses and stock. And although the dollar during the half year has doubled (and the cost of imported components, respectively), the price of registrars Datakam has risen by only 40%. Here, a very good example of how we can improve the production efficiency without compromising product quality.

For the second year in a row the demand for registrars Datakam exceeds supply. Therefore, we plan to continue actively to expand production. The company plans to increase the degree of localization of the Assembly, to produce components in Russia. For example, in our country it is already possible to print some cards, there are all conditions.

Casting plastic parts of the housings are also very soon will be here, we are already negotiating with several Russian factories. But you have to be realistic. To produce all the components for consumer electronics in Russia now is impossible physically.

No one here makes the batteries, nobody prints of fees for registrars, no one produces GPS/GLONASS antenna — at least of such quality and in such quantities that the point of order here, and not to do by order in Asia. Many observers and “sofa analysts” criticize. What are your registrars Russians, if they are made from Taiwanese, Chinese, American parts.

But for the same iPhone not a single component, except the processor, do not create Americans — and thats not the American smartphone. I think any reasonable person language does not turn called iPhone Chinese development, though on the boxes and written about the Chinese Assembly. When you cook soup, you put in the tomatoes Azerbaijani, Belarusian potatoes and Chinese garlic. But cook something in Russia, according to Russian recipe and will feed the Russian people.

So it turns out the real Russian borscht. It is my opinion. Russian Registrar is the one who invent and develop Russian engineers, taking into account the requests of Russian consumers. The one based on Russian ideas and Russian know-how.

The taxes on sales which are paid to the Russian Treasury. For the creation of which get paid by the citizens of Russia. So our domestic product, may many components to build, and while “trophy”. The number of local “ingredients” we are definitely going to increase — its only a matter of time.

Source: google.co.uk/blog/6-tools-that-simplify-work-with-offshore-development-teams/

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