Like many other industries, electronic board manufacturing is evolving with an ever stronger focus on the hic et nunc: here and now!
According to Assodel, writing on what is new for EMS companies, the capacity for resilience is one of the main challenges ahead.
Customer needs are moving ever closer to trends typical of the distribution world: ever more indicative forecasts, requests to bring orders forward inside the agreed lead times, revisions and quotes wanted “today for today”.
What all these phenomena have in common is the market’s demand for greater speed of response, along with a more-than-excellent ability to adapt. Both challenges are everyday life for the purchasing and sales departments in the sector, forced to constantly maintain, rework and rework again their IT systems, moving dates around and generating mammoth volumes of emails and phone calls to keep everyone happy. Everything seems urgent, everything seems important.
Handling this critical issue in emergency mode has heavy consequences both for operational work (as already mentioned: emails, calls, rescheduling in the system and so on) and for production. Forced to keep ever more customers travelling in a permanent overtaking lane. In the end everyone gets jammed in the same lane, with voices getting ever louder. The customer that usually wins is the one that matters most in terms of turnover.
There are, of course, constraints on the pressing needs of demand: component supply chains first and foremost.
Gross margins in the sector are extremely thin
– almost all components can be obtained quickly, but at what cost?
– and so as not to lose out, manufacturers have to choose between eroding margins upstream and risking the loss of turnover downstream.
In this scenario, you cannot think of devoting resources and investing a good part of your time in this endless chess game between margin and turnover.
This kind of solution is just a patch that can only generate losses and risk sinking the ship. Everyone seems unhappy in some way: business owners, who see the risk of robbing Peter to pay Paul, and operational staff, who enter confirmation dates that normally end up being pushed back.
Taking the perspective of “what we can do” and setting aside external responsibilities (fluctuating demand, supplier lead times), here is what needs to change:
- Rethink purchasing & procurement processes, diversifying delivery and stocking policies.
- Adapt production to the new system by reducing batch sizes and working only on what is needed, avoiding mass production runs that clog the production flow.
- Create standards for the scheduling process that also provide for overtaking lanes, limited but possible.
On many occasions people believe they can sidestep a review of flows and methods by bringing in technological solutions, all the more so today, when artificial intelligence seems to be the panacea for all ills.
Technology should come in as a support and be integrated, but only after the work has been done on the processes and on how people approach them.
Per aspera ad astra!
