Electronics manufacturers have for a long time been inclined to look offshore when it came to outsourcing work. One company bucking that trend is Queensland-based Elexon Electronics. By Brent Balinski.

The manufacturing capabilities that Australia has available within its borders have received a lot of attention this year, becoming the subject of much discussion in the media and elsewhere. Whether or not this interest will be sustained in the long term remains to be seen. Manufacturers are hoping that it will be; that the country can rebuild its industrial muscle, and that public and private procurers will look locally first.

For many years the tendency for electronics manufacturers and others has been to look offshore. Elexon Electronics, a successful electronics engineering and contract manufacturing business based in Brendale, admits there are challenges to resisting this trend. However, the company is on a mission to change it.

About two years ago, Elexon went through a significant growth phase due to demand for its unique mining products. At that time Elexon considered outsourcing due to capacity constraints. Instead, it decided to double its own production capacity, investing heavily in a new Industry 4.0 line, restructuring the company, and beginning to offer its services as a contract manufacturer.

“There are obviously a lot of advantages to producing in-house,” says Frank Faller, CEO at Elexon Electronics. “For example having engineers close to manufacturing has a huge benefit of fast communication and flexibility. We can be more responsive to customer needs.”

Today the Elexon Group has five divisions: Elexon Electronics, Elexon Mining, Ambler Systems (which focusses on mobile signage), wildlife monitoring developer Titley Systems, and TPS (a producer of instruments to analyse water quality.) The latter two are acquisitions. Elexon Group currently has about 80 employees. Elexon Electronics is the manufacturer of choice for the sister companies and employs around 40 staff.

The most successful items manufactured in Brendale are the world-leading equipment used to monitor the ore movement in large underground mines. Most of the products are exported overseas.

“You can find Elexon mining instruments on every continent besides Antarctica,” says Faller with pride.

The Elexon Group’s electronics division also takes in a wide range of engineering work for third parties, including control systems and displays for supermarket ovens and bakeries, RFID readers, livestock tracking tags or air conditioning control systems for buses.

“We continue the business model of turning ideas into products,” explains Faller. “Traditionally, we did not engage in contract manufacturing, but the new production line that we commissioned last year, with this extra capacity and unique capabilities now enables us to reach out to high-value contract manufacturing, including the defence industry.”

The team

Elexon Electronics began in 2006, and is owned by Peter Kuiper, a former chief engineer at Boeing, and creative engineer and innovator Leigh Bateman. Bateman began predecessor company IEDEC in 1992. Faller grew up in East Germany, trained as a manufacturing engineer, and began his career at Siemens telecommunications. After moving to Australia he started working at Suba Electronics in 1995, followed by Bosch for many years, then Ampac and Crystalaid.

“Back then there were many more electronic manufacturing companies around, such as Startronics, and ERG Electronics in Perth, and some other big ones,” he recalls. “Unfortunately, I have seen a huge decline in manufacturing in Australia. We are certainly trying to end this trend.”

Faller remembers his decision to join Elexon being influenced by the company’s established quality management system, which remains a focus for the business.

“Even though it wasn’t customer demand, it was an internal protocol,” he recalls. “Every product was serial number-tracked in order to make sure that no faulty product slipped through to the next process step.”

The company’s advanced quality management system was another key factor for Faller: “The way Elexon had an advanced system in place that captured and analysed the quality data… it was a proof of continuous improvement I was impressed with. This really helped to make the decision.”

Part of the company’s strategy to arrest the decline in the electronics sector is focused around training. It’s harder than it was years ago to find the right SMT (surface-mount technology) technicians or manufacturing engineers, so extra efforts are made when it comes to in-house development. All assembly workers on the floor are IPC-A-610 certified, or at least trained according to IPC. The company maintains a continuous hunt for “stars”, with a lot of cases of final-year engineering students being taken on part-time and then moved into full-time roles once their degrees are completed.

“A great example is our SMT team leader,” says Faller. “He has a background in the hospitality industry, and was a chef before he joined us. He has grabbed an opportunity and learned. Looking at him now, you would think he is a trained SMT operator or a technician with 10 years experience. It’s a dramatic shift, and we are proud of him. These are the people that make really Elexon strong.”

Becoming more agile

Faller describes the company’s output as high-mix, low-to-medium-volume. To be competitive in making its own products and in the new contract manufacturing phase, Elexon had to address changeover times between different production batches.

Previously, it could easily take six hours to set up an SMT line for a new job, which might run for only a few hours. Then you have to do the same process for the next project.

The company began investigating Industry 4.0 solutions in 2018. Faller led a successful grant application through the State Government’s Made In Queensland program, securing $890,325 in support to invest in a Mycronic 4.0 solution.

“With the new system we can start setting up for a new job while the previous one is still running,” says Faller. “It is very efficient.”

The new line features a MY700 jet printer, highly-automated conveyors, two MY300 pick-and-place machines, an X-ray inspection system, a vapour phase reflow oven, and an intelligent storage system. The storage system both saves space and provides intelligent inventory management, housing up to 980 reels. Component traceability and the ability to backtrack the production process are becoming an essential capability for SMD manufacturers.

According to Faller, the new assembly line enables a tripling of output, provides capabilities for new technologies such as micro BGAs, flex-boards, re-soldering, and many other benefits. In addition the pick-and-place machine allows up to four boards to be set up in parallel and reduces idle time between jobs by up to 80%.

The jet printer is “classic Industry 4.0”, according to Faller, and eliminates any need for tooling. There is now no need for stencils for printed circuit boards (PCBs), solder paste squeegees, or less-than-perfect joints.

“And no matter if it’s a small flexible board, or whether it’s a very large 20-layer board, the oven has so many sensors and can achieve the target soldering profile the first time, so we don’t need to do any trial and error program optimisation. The board comes out and it’s perfectly soldered. Especially for prototyping, that’s just huge.”

The list for upcoming investments includes 3D automated optical inspection, Faller adds. “We continue to be on the forefront of technology.”

Moving into defence

The new investments are part of Elexon’s aim to win a steady supply of high-value contract manufacturing work. This has received a boost recently, with the company engaged for its first project with EM Solutions, who Faller says was impressed with Elexon’s quality management system and its new capabilities

Other recent projects include Elexon’s involvement in the OzVader consortium. The Olitek-led group, with input from clinicians, universities and engineers, has created a ventilator that can be assembled cheaply and from local sources. Currently awaiting approval from the Therapeutic Goods Administration (TGA), it would be another tick for local manufacturing sovereignty.

Discussing his views on reshoring and whether the long-term trend to look overseas for electronics manufacturing needs can be overcome, Faller believes an “accountant’s view” of product costs is very common when companies decide whether to source work in Australia or overseas.

“People don’t take into consideration lead times, shipping costs, IP risks and so on,” he says. “There is still this mindset that sees people look to China for suppliers, because they automatically think it is cheaper.When we talk to customers or potential customers and show them our capabilities and service, they’re really surprised. We often hear them say that if they had known what available is around the corner, they wouldn’t get their boards assembled in China.

“Reshoring is certainly a trend that we see. We are passionate promoters of it too. Lately we have had customers approaching us. Some of them are actively moving their production from China to Australia, because they’re really proud of being able to market their product as Australian-made.”