Vtech 2004 Annual Report Download - page 17

During the financial year 2004,
VTech was able to secure
additional businesses from
existing customers, some of
whom even doubled their orders
medical equipment. Orders in these
segments from existing customers
accounted for only a small portion of
contract manufacturing services revenue
in the financial year 2004, but marketing
and promotion saw good progress and we confidently
expect additional business and new customers from these
two areas.
Customer service levels were enhanced as the new R&D
centre in Shenzhen came into full operation. VTech is now
able to offer a comprehensive “one-stop shop” service. This
not only helps customers improve product design from a
cost and quality perspective, but takes initial concepts from
first design through to full production. The service will drive
considerable revenue growth in the financial year 2005.
During the final quarter of the financial year 2004, the
business also began to implement the cell-based
manufacturing process that has raised productivity and
increased flexibility at the other businesses. This will further
enable VTech to improve its responsiveness to customers
and to offer incremental improvements in costs, which are
the key to achieving top and bottom line growth.
“ Our ability to deliver quality products, as well as flexible
and price competitive services resulted in a record
number of customer awards during the financial year. The
diversified nature of the business, meanwhile, ensured the
business to achieve steady development.
”
Andy LEUNG Hon Kwong
Chief Executive Officer
Contract Manufacturing Services Business
Awards
30.9% from those in the US and 13.4%
from the Japanese market. By product
category, professional audio equipment
accounted for 30.5% of total contract
manufacturing services revenue,
followed by power supplies at 26.1% and
wireless products at 13.4%.
The prices of raw materials and
components began to rise from the
second quarter of the financial year 2004,
as the global economy gradually
improved. The business was able to find
local alternative sources and leverage the
Group’s purchasing power, which
mitigated the impact of the price
increases.
In the second
quarter of the
financial year
2004, the
business was
successful in
securing
ISO13488 and
TS16949
certifications, enabling
VTech to enter into the
production of automotive parts and
Contract manufacturing services
business was given the “2003
Valued Supplier Award” by ITC.
Contract manufacturing services
business was given the “Value
Added Supplier of the Year Award
for 2003” by Harman Music Group.
Review of
Operations
15
VTech Holdings Ltd Annual Report 2004