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SMC - The State Of Supply Chains In Electronics Manufacturing

The State Of Supply Chains In Electronics Manufacturing

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With rapid growth in the technology sector, many EMS providers are radically underprepared for adapting to needed manufacturing processes, and exposed to huge risk by forsaking visibility into their supply chain.

For manufacturing to adapt, it needs to gain better visibility, and prepare for larger demands from increased adoption of IoT devices, and incorporate radical new manufacturing techniques like virtual reality prototyping, and 3D printing.

Visibility Into Supply-Chain Flows

The general finding is that EMS providers lack visibility in their supply-chain. Lack of visibility leads to many risks and challenges. The biggest of these challenges are a need to maintain excess inventory to mitigate risk. This comes with its own risks though such as spoilage and decreasing competitiveness when pricing in the cost of purchasing all materials up front. Secondly, lack of visibility makes it difficult or impossible to track and report on vendor service levels, potentially costing you time and money in delayed shipments.

The risks of lack of visibility are many.

  • Without knowing where materials are, your lead times are longer to accommodate unforeseen delays
  • It becomes difficult to manage capacity, because you do not know your true inventory levels
  • Hard to know when you need to change your vendors before they run out of critical materials
  • Quality can vary, because you have no easy way of tracking components through the manufacturing process and comparing lots

Visibility is the ability to know, in real-time, what is happening end-to-end in the manufacturing supply-chain. This is a huge advantage for manufactures to increase quality and cut costs and time. Yet, 70% of EMS providers have fewer than half of their operations on real-time updates.

While technology is rapidly developing and exploding the demand for EMS, many EMS providers are underprepared for the increase in demand and ability to track ever more complex supply-chain systems.

Manufacturing of The Future, Now

Many incredible new manufacturing processes are available to manufactures to increase their capacity and capabilities to improve quality and expand product lines. As we all know, it is difficult to adopt new manufacturing processes though. While these changes would radically change the way manufacturing operates, it is expensive and time consuming to make the switch.

Sadly, more than half of EMS providers say they have passed on a product idea because their manufacturing processes were insufficient.

Just what is this future tech that providers don’t have?

  • Advanced Materials
  • Predictive Supply-Chain Analytics
  • Increased Manufacturing Automation
  • Modular Assembly
  • Rapid Prototyping
  • Virtual Reality Design and Prototyping
  • 3D Printing

These technologies improve the efficiency of manufacturing, making providers leaner, and more adept at changing quickly to rapid technology developments. Quick adjustment to new technologies is crucial as the rate of technological advancement accelerates.

Internet of Things (IoT)

Everything is connecting to the Internet now. Everything from coffee machines, cars, and alarm clocks, are being connected. This is a rapidly expanding field, but a huge majority of manufacturers are not currently taking advantage of the market for IoT products.

Some of this is due to a lack of knowledge and expertise to help deliver these solutions. Manufacturers have to bring on new staff to fully develop this field.

And, IoT is not just for products sold. Manufactures who adopt IoT processes gain immense visibility into their production, supply-chain, and overall operations. IoT allows the entire production line to communicate in real-time and more effectively manage the system beginning-to-end.

Adjusting to provide IoT solutions provides many benefits:

  • Deliver additional product capabilities
  • Create new products, services, or business models
  • Understand failure to increase quality
  • Measure feature usage to impact user design
  • Changing packaging base on sales metrics

Time To Make The Change

Visibility into your supply-chain is a must today. As products become more and more complex, it will become impossible to effectively manage production and supply without implementing systems that track the process in real-time.

SMC has embraced many of these practices and developed a state-of-the-art facility right in the heart of Kentucky. To learn more, contact us, we’ll be glad to share.

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