The Qingdao manufacturing connection

FLSmidth is improving procurement and manufacturing solutions to provide on-time, reliable products at good prices. The Qingdao manufacturing facility focuses on reducing costs to its customers for standardized equipment.

The marketplace demands reliable products at a good price and delivered on time. Part of FLSmidth’s operational strategy to remain at the leading edge and deliver competitive products and services, is to reduce cost while increasing quality and availability.

“While commodity prices and raw materials fluctuate, we had to look for opportunities to cut costs but still deliver timely products that are built with safety and quality in mind,” said Mark Fielder, FLSmidth Vice President, Minerals Global Operations.

A global procurement strategy allows FLSmidth to source equipment and materials competitively, thus creating more opportunities for reduction of cost and optimization of delivery schedules. Utilizing engineering services through FLSmidth’s India offices and then effectively negotiating price and conditions with global and local suppliers have improved our cost structure, allowing FLSmidth to pass on the savings to mining customers.

In addition, as part of our procurement and manufacturing solutions and to reduce dependency on outside vendors, FLSmidth has invested in manufacturing a number of products in low-cost countries to maximize cost efficiencies while maintaining a high standard of quality and reliability. FLSmidth’s manufacturing in its Chinese and Indian facilities is increasing, and we are more effectively utilizing available production capacity.

One such operation was set up more than three years ago in the Shandong Province of eastern China. The Qingdao facility is a strategic manufacturing/assembly center that supports all of FLSmidth as an integrated production unit that secures compliance in safety, quality, delivery and reduced cost.This 36,000 m2 facility is focused on standard products with high labor content that require only light-to-medium fabrication. That emphasis, combined with local sourcing and dedicated work centers, enhances production of standard products.

Another benefit is that quality specifications can be more easily maintained; in fact, the Qingdao team has been ISO9001 certified since 2008. Intellectual property rights are better protected when manufacturing through in-sourced capabilities, which ensures the customer is receiving the best, tried and tested, most efficient products available. All this is backed by FLSmidth’s process know-how and service.

Core manufacturing capabilities of the Qingdao team include fabrication work with welding certification to AWS (American Welding Standard) and AS/1554 part 5 (Australian Standard, which is especially critical to Australian customers in coal preparation); in-house blast and paint booth; Polyurethane; ceramic tiling; and assembly. The facility includes a quality lab and up-to-date Oracle® enterprise resource planning (ERP) systems to increase integration, trackability and communication with FLSmidth offices throughout the world.

“Since moving this specialized manufacturing in-house, we have found our products can be produced with equal or better quality and at a substantially reduced price, enabling us to be globally cost competitive,” Mr. Fielder said.

CONTACT: Teck Soh