Buy local, make local: AMA Group

AS GLOBAL supply chains become disrupted as a result of the COVID-19 pandemic, Australian automotive accessories and aftermarket parts manufacturer AMA Group is reaping the benefits of not only making products on home soil but sourcing much of its raw materials locally.

 

The company’s manufacturing portfolio includes LCV and 4x4 protection products brand East Coast Bullbars, Custom Alloy (OEM and aftermarket truck bullbars), Alloy Motor Accessories (ute trays) and CSM (ute service bodies), as well as off-road accessories supplier Uneek 4x4.

 

In an interview with GoAuto, AMA Group executive general manager for vehicle protection products and ute accessories Trevor Long explained how the company was sticking to – and expanding – its ethos of bringing as many of its production processes as possible in-house and keeping overseas suppliers to a minimum.

 

“As much as possible, with all of our businesses, we work on a local supply chain as much as we can,” he said.

 

“It’s just about reliability and adaptability; if someone rang me and gave us an order for 200 bullbars and said they need it by the end of next week, we could do it because we’ve got the metal, we’ve got everything we need here.”

 

Mr Long said AMA Group’s focus on local suppliers and in-house processes provided “control over your total business to ramp up, ramp down, whatever you need to do to meet the customer’s needs no matter what you get thrown at you”.

 

“At the beginning of this whole COVID-19 pandemic back in February, we started to look where this could possibly go and all we had to do was identify what were the items we imported and were a risk,” he said.

 

Mr Long explained that imported items such as lights and certain types of alloy plate were imported from China and Europe, so were stockpiled and held in AMA Group’s own warehouses rather than relying on third-party storage.

 

“Whatever we are dependent on from anyone overseas, let’s get the product but don’t hold it in our supplier’s warehouse because what if they shut down?” he said.

 

“When you’ve got it on the floor, you’ve got control of it and you know you can continue to manufacture.”

 

Mr Long also said he was aware that a number of competitors either fully imported or relied heavily on overseas suppliers and were now experiencing supply issues.

 

He said the higher cost of maintaining a local supply chain was worth it due to “the value they add that’s not on an invoice”.

 

An example Mr Long provided was a long-term supplier of injection-moulded plastics to East Coast Bullbars that makes its own tooling and had been able to quickly produce emergency spare parts for ECB when manufacturing machinery broke down.

 

“So many of our suppliers and long-term supply partners have more capability than just being able to supply what parts we need for the supply chain,” he said.

 

“I could save $40,000 by taking (injection moulded) parts offshore but I don’t because that business adds that (value) to me; I might not need to suddenly call them in more than once or twice every two to three years but they will come to the rescue.”

 

Mr Long described the network effect of AMA Group’s different divisions, their suppliers and customers all helping each other.

 

“It’s more than just each individual manufacturing business, it’s being part of this whole group of Australian businesses, which gives us quick solutions for our internal issues but also those of our customers,” he said.

 

On the other hand, Mr Long said there were moves to bring even greater capability and control in-house, with a tube-bending jig recently relocated and plans to invest in laser cutting equipment that were temporarily on hold due to uncertainty surrounding COVID-19.

 

Asked how the company was faring generally as the COVID-19 pandemic unfolded, Mr Long said CSM’s facility in the Brisbane suburb of Underwood was busy “fitting service bodies and full fleet fit-outs”.

 

“They’re carrying a strong order book and we’re expecting to see more orders come through,” he said.

 

But overall, Mr Long described AMA Group as having “capacity to burn as the market is slowing”.

 

“Where we sell through a reselling network that sells to retail customers, that market is down somewhere around 35-40 per cent,” he said. “In the OEM truck space, that is down 40-50 per cent because people aren’t buying.”

 

Fleet business remains strong, though, and Mr Long predicted this to accelerate if significant government-funded infrastructure projects emerged from the COVID-19 pandemic in order to help restart the economy.