Rumours of the demise of manufacturing greatly exaggerated

23 Apr 2013

(From left) Dick Lehane, John Mullins, Sean Sheehan and Jim O'Hara of Wisetek

At the height of Ireland’s feet-of-clay economic boom, a thought pervaded official circles in Ireland – manufacturing no longer matters to the economy. Indeed, there was plenty of reason to believe this might be the case since a lot of electronics manufacturing activities that came in the 1990s had shifted to the Far East.

Luckily – for Ireland, that is – the feet-of-clay economists were wrong and key activities of giants like HP, IBM, EMC, Intel, Apple, Analog Devices, and many others have remained in Ireland.

And now, as the US learns to its regret, that it should never have allowed manufacturing industries, such as the electronics display business, to slip away to Asia, a re-emphasis on manufacturing activities state-side could benefit Ireland, for various reasons. It is an English-speaking country, it is in the Euro Zone and as such is the ideal gateway to Europe.

That is the logic of Sean Sheehan, managing director of Cork-based OEM (original equipment manufacturing) services company WiseTek. In five years, the company has grown from zero to 200 employees.

Now, WiseTek has beaten off competition from long-established contract manufacturers to win a pivotal deal with VCE, a cloud infrastructure joint venture between Cisco and EMC.

WiseTek has established a new business development team in the US and already employs 30 people in Thailand. It also counts major computer manufacturers, such as Dell, as customers.

In recent weeks, the company bulked up its board to include Jim O’Hara, former Intel Ireland general manager, Dick Lehane, former EMC vice-president, and John Mullins, former CEO of Bord Gáis.

The growth of WiseTek

Sheehan, a former EMC employee, got the business going five years ago. Things have accelerated for WiseTek since VCE put out a tender for the manufacture of its VB100 and VB200 virtualisation servers.

“What won it for us was that a lot of the guys on the WiseTek team were ex-EMC (employees) and had manufactured for the company in Cork previously. Factors such as the fact that we were English-speaking and were in a useful time zone also came to bear.”

Sheehan said there are a number of dimensions to WiseTek’s business, including logistics, recycling, refurbishment, the recovery of IT assets from old machines, and full manufacturing services for computer makers.

He said the deal with VCE is a stepping stone to other markets. “We’d expect VCE’s business to expand significantly in the coming years based on the enormous market that exists for cloud and big-data systems.”

He said the way it works is that EMC provides the storage technology and Cisco the network switching systems. WiseTek then integrates the hardware and software before shipping the final product.

“What we do is quite niche in manufacturing terms. We do the integration and the final test.”

Sheehan said WiseTek is focused on expansion into the US and Asian markets. “We tend to work very closely with Enterprise Ireland, they’ve been a huge help.”

He said the company is formulating a new strategy for growth focused on what he calls reverse logistics.

“Around the world, particularly in countries in Asia and North America, the governments there are tightening up on things like carbon footprint, landfill and sustainability. Europe has good legislation but Asia needs to tighten up more on legislation around landfill and disposal of electronics.”

Sheehan said WiseTek’s goal is to have zero landfill.

“We can enable that by recovering pre-used computer systems and material and bring it back into the supply chain by refurbishing old equipment and recycling and reclaiming parts, such as precious metals, from computers.

“Part of our plan to address this market opportunity is to establish facilities in China and the US. We’ve done it in Thailand and have learned how to win compliance licences.”

Manufacturing in US

Returning to the subject of the US, Sheehan said a revival of manufacturing there would benefit Ireland as the natural gateway into Europe.

While the US may be home to many of the world’s biggest technology companies and Silicon Valley, the heartlands of manufacturing in the US are now known as ‘the rustbelt’, but there’s a concerted effort by entrepreneurs to revive industry in cities like Detroit, Michigan.

A case in point would be the display industry, now at the heart of all technology innovation. Asian manufacturers, like Samsung, Sharp and Panasonic now dominate that industry, which had once been prominent in the US.

In December, Apple CEO Tim Cook signalled the return of a number of manufacturing lines to the US, but he and other CEOs have warned that the US education system needs to be fine-tuned to provide the kind of workers needed to run sophisticated manufacturing lines.

Sheehan said the quality of workers in Ireland and the quality of management that has emerged from decades of foreign direct investment means the country will benefit from an upswing in US manufacturing needs.

“The States are increasing their manufacturing activities and the knock-on effect would be complementary to Ireland and result in a surge in opportunities in helping US manufacturing giants get their goods to market.”

Sheehan said the addition of O’Hara, Mullins and Lehane to his company’s board will support that global strategy. “They have been around and can provide an outsider’s perspective. Plus you can’t beat experience.”

A version of this article appeared in the Sunday Times on 21 April

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years