Adapting to challenging market conditions with agile manufacturing
02 March 2020
Although life is never easy for electronics manufacturers, there are multiple opportunities for growth as the world continues to become more interconnected. Electronics manufacturers that can adapt to challenging market conditions – by being agile – stand to gain most from emerging opportunities. Steve Marshall, Managing Director at EMS provider, Offshore Electronics explains further...
This article was originally featured in EPDT's 1H 2020 Electronics Outsourcing supplement, included in the March 2020 issue of EPDT magazine [read the digital issue]. Sign up to receive your own copy each month.
The advent of technologies such as the Internet of Things (IoT), estimated to be a $6 trillion global market by 2025, offers rich pickings to electronics manufacturers along the length of the supply chain. Similarly, the automotive industry is ramping up its efforts to develop electric and hybrid cars, as well as autonomous vehicles.
The manufacturing industry has an ever-increasing need for sensors. Modern maintenance regimes, based on condition monitoring, require multiple electronic sensors (such as accelerometers) to collect, transmit and analyse raw machinery data. This trend is only going to continue. All these areas, and many others, require a greater level of electronics than ever before. However, this huge opportunity for electronic device manufacturers comes with a number of complex challenges.
For electronics manufacturers, making more devices is not complicated. However, the ability to do this against a background of shifting, unpredictable and disruptive factors is where the challenge arises. Issues such as business (and political) uncertainty, fluctuating levels of demand, rising labour costs and supply chain instability can all add complexity to the process. Those companies that can best deal with these issues reap the rewards; those that get it wrong may go out of business. With such a lot at stake, it pays to adopt practices that increase the chance of success.
Companies must be able to respond to changing conditions as required. The designers and suppliers most likely to succeed will be those that are adaptable – or agile – enough to take advantage of opportunities and to cope with unexpected complications.
Agility in manufacturing is the quality of having an operation that is flexible and adaptable enough to survive in the face of unpredictable conditions. It does not rely on technology alone. In fact, it is as much about company culture as it is about technology. An ‘agile’ company acts proactively, by pre-empting potential problems and having a plan in place to take swift, decisive, appropriate action when needed. In this process, technology plays several roles: it provides the vital data needed to make decisions; it improves the supply chain; and it keeps staff, both internal and external, connected with one another.
Agility is akin to fitness. So, just as a fitter person is better able to cope with physical demands thrown at them, an agile company can handle a variety of business challenges. The first step to introducing it is to foster an agile ‘culture’ within a company. This happens when employees communicate effectively and are able to solve problems rapidly. Communication is critical and works on many levels. It can mean feeding back field data in order to make improved products and reacting quickly to industry trends. This requires products to be easily modified or overhauled and the company to communicate with other organisations, ensuring that all partners make changes at the same time.
This communication isn’t just at an inter-personal level. In many cases, ‘communication’ extends to the delivery of vital data from one place to another, such as raw data from the production line, or even individual machines. An agile organisation will be able to manipulate and manage this extra data in a way that helps it to anticipate problems and react to them.
Some of the manufacturing solutions from the past are not applicable in the modern world. For instance, the cost of labour is one that cannot be solved in the ‘traditional’ way. In the past, many companies simply moved production to lower cost economies in order to save cost. However, this is not always appropriate now. Labour costs in manufacturing have risen in countries such as China and stagnated in Western economies. At the same time, there are potential concerns with delivery times and product quality with regards to components made in the Far East. Sometimes, the first step in becoming agile is making the decision to step away from traditional solutions and traditional thinking and instead, find new ways to maintain high product quality at acceptable cost.
Flexibility through outsourcing
Finding success in today’s commercial environment usually means responding quickly and efficiently to changes in technology or market conditions. One way of doing this is to outsource the manufacture of electronic components, such as printed circuit board assemblies (PCBAs), to a contract electronics manufacturer (CEM). This allows companies to focus on their core expertise, reduces risk and cost, and accelerate time to market.
However, outsourcing has changed. In many cases, it is no longer simply ‘farming out’ production to the cheapest provider. In the fast-moving world of modern electronics, manufacturers must be able to guarantee product quality and delivery times. The old model, of simply moving production to a lower-cost economy, is no longer applicable.
Instead, manufacturers are increasingly keen to introduce ‘re-shoring’, making their products as close to home as possible. This means taking on a cost competitive CEM that can provide the necessary speed and quality of manufacture with the ability to ‘add value’ to products. These can be achieved when a CEM is properly selected and brings a number of advantages.
Firstly, outsourcing in this way eliminates the need to invest money and time setting up specialised manufacturing systems, such as high-volume surface mount lines. It can also improve the resilience and efficiency of the component supply chain. A good CEM can source parts effectively, in large volumes, from accredited suppliers.
CEMs can also add value to the process, by helping manufacturers to optimise the design of their PCBAs and electro-mechanical assemblies. With their in-depth knowledge of the manufacturing process, CEMs know how to simplify the manufacture of products, which can help to reduce cost, improve quality and enhance performance or functionality.
Manufacturing agility requires work if it is to be spread throughout a company. However, the desire to think in new ways and not to accept outdated ‘solutions’ to problems, is a step in the right direction. Becoming agile really could be the difference between success and failure – at a time when opportunities are rife within electronics manufacture.
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