China Plus One Strategy: Importance for Precision-Tech OEMs Worldwide

In recent years, global supply chains have faced multiple unprecedented challenges. Changing geopolitical and trade tensions, rising tariffs and labour and resource prices, COVID-19 pandemic – these disrupting factors have exposed the vulnerabilities of relying heavily on a single manufacturing location for businesses worldwide. This is especially true for precision tech OEMs, like medical devices and life sciences equipment manufacturers, for which ensuring resilience and continuity in supply chains is of crucial importance.

In the past several decades, global manufacturing world has increasingly been outsourcing operations to and relying on component suppliers from China. China Plus One strategy has emerged as a solution which entails diversifying operations to include reliable manufacturing partners outside of China, often in another country in Asia. In this way, manufacturers can improve supply chain resilience while maintaining cost efficiency and market reach. For precision tech manufacturers, Singapore stands out as a global hub for high-precision manufacturing due to its skilled workforce, focus on innovation, well-developed infrastructure and strategic location.

Why Precision Tech OEMs Need the China Plus One Strategy

As mentioned above, the primary reason for manufacturer to adopt the China Plus One strategy is supply chain resilience and ensuring a steady flow of critical components. By diversifying manufacturing across geographies, companies reduce exposure to risks such as tariffs, geopolitical tensions, and sudden production shutdowns. Next to this, other reasons come in favor of this approach:

Access to Regional Expertise

Certain regions offer unique advantages in terms of specialization, workforce skills, and regulatory frameworks. Diversifying allows OEMs to tap into these localized strengths.

Cost and Scalability

China’s manufacturing dominance has faced challenges from rising wages and operational costs. The China Plus One strategy enables companies to maintain cost efficiency by supplementing operations with production in other competitive locations.

Market Proximity

By establishing production hubs closer to end markets, companies reduce logistics costs and lead times. This is particularly valuable for industries like medical and life sciences, where speed to market can be critical.

Why Southeast Asia is the Ideal Partner for Precision Manufacturing

Singapore is globally renowned for its well developed precision components manufacturing ecosystem, with manufacturing contributing a quarter of its GDP. The country’s advanced infrastructure, skilled workforce, and adherence to stringent international standards make it an attractive hub for producing high-value components like medical devices, analytical equipment parts, and life sciences instruments.

Next to this, Singapore nurtures a strong focus on innovation, leading the shift to Industry 4.0 and establishing itself as a premier partner to support efficient advancements in precision technology development.

Singapore’s strategic location and developed Free Trade Agreements also position it as a global trade hub and enable efficient distribution for precision components and finished products.

Indonesia: The Complementary Powerhouse

Indonesia is another attractive location for precision manufacturing subcontracting due to its cost-effective dimension. With a growing industrial base and access to a skilled yet competitively priced workforce, Indonesia excels in large-scale production of precision components. By combining operations in Singapore and Indonesia, companies can leverage the best of both worlds—Singapore for high-value, low-volume production and Indonesia for scalable, cost-efficient manufacturing.

How Team-Metal Supports Precision Tech OEMs

As a precision manufacturing subcontractor headquartered in Singapore with production in Indonesia, Team-Metal offers the ideal solution for OEMs seeking diversified and resilient supply chains.

Expertise in Critical Industries

We specialize in crafting precision tech components for highly regulated and demanding sectors, including:

• Medical Manufacturing: We produce components for medical devices, surgical instruments, and diagnostic equipment, adhering to stringent FDA and ISO standards.
• Life Sciences: Our expertise includes components for life sciences equipment used in laboratories and biotechnology research.
• Analytical Equipment: We manufacture analytical equipment parts with extreme precision, meeting the high tolerances required by OEMs.
• Office Automation Sector: Our solutions include components for industrial printers and advanced automation technologies.

Advanced Capabilities for Scalable Solutions

From CNC machining services including CNC turning and milling to surface treatments and assembly, we provide end-to-end manufacturing solutions. Our facilities in Singapore and Indonesia are equipped with state-of-the-art technology to deliver the highest standards of precision at competitive pricing.

Whether you need low-volume, high-value components or large-scale production, we have the capacity and expertise to deliver.

Tailored Support for OEMs

We know that every OEM has unique needs, and that’s why we support our clients with all-encompassing services from value engineering and rapid prototyping to large-volume production, tailoring our services to align with your specifications and quality requirements.

Rich Inventory Hub

Our inventory hub in Singapore provides strategic safety stock management, ensuring rapid delivery of precision machined parts to meet fluctuating market demands and unforeseen challenges, making us a reliable partner in your supply chain.

If you are looking to strengthen your supply chain and partner with a reliable precision components manufacturer, contact us and let’s discuss how we can help meet your needs.