Issue Issue 1 2008
Biazet applies the knowledge
Biazet, located in Bialystok, Poland, is a major manufacturer of electrical appliances for major technological suppliers across the globe.
Formerly state owned, and initially involved in the creation of automotive components, the company has recently become independent and has strengthened its capabilities and competence regarding the development of a range of appliances.
Adam Morawski, CEO, outlines the current status of the business: “Biazet has two separate businesses: one focuses on manufacturing, and we have been in this market for over 30 years. The other side of the business is property: we manage a fairly large commercial property portfolio, consisting of an office building, shopping centre, parking lots, and a manufacturing facility that we rent to a number of independent operators.
“We started by making sub-assembly units for television sets, and later whole televisions themselves. During the early 1990s, we began to turn to automotive assembly, and became Tier One and Two suppliers. It was around this time that we moved into the assembly and manufacture of small appliances. Currently, Biazet manufactures a range of product lines, and we make items like drip and pressure coffee makers, vacuum cleaners, LED multi-colour lights, and a number of electrical components used within the light construction industry,” Adam continues. “We have two key customers in the appliance assembly business: Phillips and Eaton Electric LTD.”
Biazet is very much within a transitional stage at this time, with many opportunities for expansion and development. Adam explains the options that are viable for the company at this time: “Working with Phillips, we do produce a range of appliances, as they operate a number of relatively independent divisions, a few of which we have the pleasure of working with. We assemble and manufacture products for these divisions, and we are working on projects with a number of other sections too. Eventually, we would like to expand our range of customers beyond Phillips.
“At this time, I think it would be too early to develop our own brand,” Adam states. “We are in the process of consolidating the range we can currently offer competence in as an OEM supplier to major brand names. We don’t really have experience in marketing and distribution, and I think it would be and area we could look at in the future, but not at this time. We have been asked by top-shelf product suppliers to continue making products of this ilk, but it would be difficult for us to be perceived as a high-end brand on the market. Our key competence is focused on manufacturing, and less on marketing.”
Strengthening its position as an OEM is very much the focus of Biazet at this time, as Adam recognises: “Over the past few years, we have existed as a contract manufacturer, meaning we provided the service of assembly. We have gradually developed our operations to become an OEM, meaning we now co-develop the products and processes, and manufacture the actual assembly lines and facilities for these appliances. As an OEM, we are now co-responsible for the flow of the entire supply chain, managing development of manufacturing techniques, as well as organising logistics for the delivery of products to a customer’s warehouse.”
To maintain its position as a quality OEM, the organisation has focused on the efficiency of its operations. Adam comments: “We apply lean principles at our plant, and we have a number of efficiency groups, workshops, and processes, many of which are taken from the automotive industry. Equally, some of the customers that we work with have been kind enough to offer potential solutions, and we have an ongoing Continuous Improvement process that has been in place for quite a while. We are obligated under the contracts that we have to maintain a certain standard of efficiency every year. The price of supplies for metals and plastics use in commodities has been increasing at quite a rate recently, and in order to offset this, process efficiency is of paramount importance.
“The small appliance industry has a high degree of seasonality, with high points coming essentially as Christmas and Mother’s Day. This factor means that we have a fluctuating employee level, but I believe we move between 400 to 1000 people, depending on the season. At all times, around 200 people are not involved within the actual manufacturing process itself, but are busy in other areas. Biazet focuses on the lower cost labour pool in regards to manufacturing, and within Poland, this is drying out at the moment. After recently joining the EU, a large amount of the unskilled labour force is moving to other European countries to find work, so we are facing both a labour shortage, and an increase in the cost of labour.”
To meet the labour demands within an open Eastern European market, Biazet is contemplating expanding its facilities further east, possibly collaborating with a plastic injection moulder to aid the swift manufacture of simple appliance models. Meeting this challenge has encouraged the business to look beyond its Polish horizons, as Adam explains: “The company is currently looking to opening a manufacturing facility behind Poland’s Eastern borders, possibly in the Ukraine or Belarus. We have started on this project, and we are currently looking for sites, organisations, and viable scenarios, and I think within the next five years, we will have developed into a business that has its headquarters, technical development, and product research facility located in Bialystok, alongside a fairly large manufacturing factory in Poland, focused on creating top of the range technology. I believe that the more simple appliances will be manufactured in Eastern Europe, where we intend to expand. This planned Eastern progress must take place alongside an injection moulder, as Biazet depends on plastic components, and logistically it would make sense to develop a production centre close to our new facility.”
Finally, Biazet intends to expand its range of services to dominate an open position with the Polish appliance manufacturing market. Adam states: “We have developed our project management skills recently – we don’t complete product design ourselves, but we are in the process of setting up a product development-engineering firm locally to work alongside us. Biazet is looking to do this as a joint venture with an established Western engineering company, allowing us to supply product solutions for our projects, as well as to develop the company beyond Biazet, and grow it within the Polish market. I perceive an opening for a skilled engineering company within Poland at this time, so it is an opportunity we are very interested in pursuing,” he concludes.
Products: Electrical appliances