How one entrepreneur took production back into his own hands

During the Electronics & Applications (E&A) trade fair says D'Handschotter  How he turned a controversial plan into a commercial success. "The idea arose after the 2008 banking crisis," the engineer begins. "Many companies ended up in the red due to external factors beyond their control. That highlighted the riskiness of outsourcing vital business processes, especially to foreign parties. It makes you dependent and vulnerable."

Quality below par
During the same period, ED&A. was struggling with quality issues with several suppliers. "There were too many error messages, and our partners couldn't get them under control. We felt this could be done better and more efficiently. At one point, I thought: 'Why don't we do it ourselves?' That thought stuck with me."

Together with his colleagues, D'Handschotter developed a detailed business plan, including a financial justification. "That was an enjoyable but also nerve-wracking time. We were one of the first companies in Belgium to bring production in-house. We had no models and had to figure everything out for ourselves. Sometimes doubts crept in: 'What have I gotten myself into?'"

Help from an unexpected source
Existing business contacts also reacted skeptically. “However, I did receive an important tip through my network: contact Eric Vets, an expert with 35 years of experience in insourcing. Eric was immediately enthusiastic. He started at our office on Monday, and on Tuesday we traveled to a major machinery show in Munich to purchase dozens of machines. An unforgettable adventure.

Avoiding childhood illnesses
Entrepreneurship means taking risks. You have to be bold – and we did. But we did so with a solid plan. We wanted to do it right from the start, so no second-hand machines with questionable quality. We opted for the best equipment and software. By partnering with someone who knows the market inside and out, we were able to avoid the major teething problems.

Collaboration has been an important pillar of the insource- ED&A's success story. "We didn't have a machine yet, but I joined a networking group of production companies. We're still members. It's very instructive to share experiences and visit each other. That saved us from many mistakes."

Dozens of machines
October 8, 2012, is etched in D'Handschotter's memory. And probably his neighbors' too, because on that day, no fewer than four trucks full of machines drove into the street. "A beautiful sight," beams D'Handschotter. "Suddenly, everything became concrete: now we could really get started. Two to three weeks after delivery, the first prototypes rolled off the production line. We thoroughly tested and improved them, and by early 2013, the first production line was operational."

Strange sport
It insource The project also presented challenges, including financial ones. "The total investment was just under a million euros," says D'Handschotter. "We had estimated that we would recoup this amount within seven to eight years. To our surprise, we broke even after just three years. This allowed us to invest further, including in large production machines and testing machines with increased capacity."

Another challenge was the new way of working. "Everyone had to get used to it. Everything was different: the technology, the machines, the software, the production floor. We hired new people who could work with the equipment and software. Sometimes it felt like I'd started a new company."

Investing in people and quality
D'Handschotters most important advice to entrepreneurs with insource plans: invest in highly educated people. “That may sound contradictory, because many outsource precisely to reduce personnel costs. We reduce our costs by automating simple tasks, so you need to hire fewer production staff. Moreover, you increase the percentage first-time-right. You could say that the high personnel costs in Europe force us to deliver top quality.”

“We cannot afford error messages, so we try to prevent them by inline process control. We automatically test every step to ensure the number reworks to keep it low. We go very far in that regard.”

Unexpected benefits
D'Handschotter has never regretted his choice. "In fact, it's yielded some unexpected benefits. We're now much more flexible and faster. Where creating a prototype used to take three to four weeks, it can now be done in just a few hours."

It insource It also has a positive effect on customer acquisition. “We can demonstrate what we do, and that builds trust. We have seventy connected machines on display in our machine shop. It looks impressive, especially when you see it for the first time. After a tour, prospects almost always become customers.”

Future plans

The company's efforts haven't gone unnoticed. ED&A. has earned the Platinum label for "Best Managed Company" and has received the "Factory of the Future" award multiple times. These successes aren't a reason for the 48-year-old tech pioneer to take early retirement. "I'm constantly trying to raise the bar for myself. As a company, we want to further improve quality and continue to innovate. Our manufacturing adventure is far from over."

Want to know more? Come to the presentation.
Has this story piqued your curiosity? Then come to the trade fair for the electronics sector: Electronics & Applications. Register here for the fair and the presentation of ED&A.