Leveraging centralized resources for efficiencies across three facilities in as many countries.

Some industries have specialized end-market requirements. For example, corporate headquarters in fast food and fast casual restaurants dictate menu items and the equipment needed to support those items by region. Franchisees have choices in equipment configuration and a timeframe in which they need to buy it from a designated food processing original equipment manufacturer (OEM). They typically order very small quantities, however, making it challenging for a food-processing OEM to fulfill orders utilizing a single manufacturing location and centralized stocking model. There are also regional differences in input power voltages, cycles and plug styles. Preferred language for control overlays also varies. This creates a configure-to-order (CTO) dynamic that adds complexity to the variable demand model. Outsourcing adds flexibility to this equation because it gives food-processing OEMs access to shared production resources which help mitigate the production resource utilization inefficiencies that this type of high-mix, variable-demand production can create. It also helps OEMs more easily support a global customer base with minimal investment in production resources.

Regardless of whether the project is outsourced, when these units are manufactured in a single location, the wastes of overproduction, waiting, transportation and inventory are likely to be significant. At the same time, dividing variable-demand, small-lot production among multiple facilities has the potential to create inventory imbalances and production inefficiencies, particularly if the work is divided among contract manufacturers and managed separately by region. Lean manufacturing philosophy provides guidance on finding a balance that supports customer requirements while still leveraging some economies-of-scale.

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Extended lead times, fake parts, 300% price hikes: What could be next?

It’s commonplace among electronics manufacturing services companies to develop workarounds for problems that crop up quickly, or to think on our feet to find ways to deal with seemingly insurmountable obstacles. Worldwide supply chain disruptions are not unusual to the electronics design and assembly and design industry. The current situation is exceptional, however, and its causes wide-ranging, but of course we still must get the product built and shipped to the customer. That doesn’t change.

The current shortage of parts came as no surprise: We saw the writing on the wall some four or five months ago. Anticipating problems is critical in this business. We secured large quantities of components that, for example, we knew were becoming very hard to find but also required for current and future customer builds. Indeed, some parts now have lead times of up to two years, such as certain types of FPGAs, microcontrollers, and other types of ICs. Unfortunately, this means larger-than-normal inventory on hand and at our partners’ locations, which is contrary to our “just in time” operational model.

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Even our wildest predictions for new technologies like the IIoT could be too modest.

“One day there will be a telephone in every major city in the USA.” This outrageous assertion, attributed to Alexander Graham Bell, illustrates the difficulty we face in trying to grasp the full potential of great opportunities. He also suggested – presumably later – that “the day is coming when telegraph wires will be laid onto houses just like water or gas – and friends converse with each other without leaving home.”

And so it is, I’m sure, with the Internet of Things (IoT). It’s just getting started. Of course, great claims have been made, particularly on the number of devices that will become connected. The IPv6 address space permits more connections than we can practically contemplate. But it’s the types of applications and services, the capabilities we will gain by leveraging data from IoT devices, that will change the way we live and work in ways we cannot conceive right now.

Under the general heading of the IoT, the Industrial IoT (IIoT) has taken on a life of its own as commercial organizations realize the potential benefits. It’s a key element of the fourth industrial revolution, the enabler for physical systems to become cyber physical systems.

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The current crisis was years in the making.

One of the biggest current concerns for the economy, in virtually every country in the world, is the state of the global supply chain. Whether discussing the shortage of chip’s impact on the auto industry or the shortage of paper goods (think toilet paper), all fingers point to a supply chain that is showing signs of fatigue.

To fully appreciate the situation we face, one needs to first look at how the supply chain got to this point.

Historically companies strived for a fully integrated manufacturing capability, so materials, parts, subassemblies, etc., were designed and controlled by the company that produced the end-product they were to be used in. As an example, an automaker would own the steel mill, glass-making facility, radio manufacturer, paint factory, etc., so virtually all parts that went into their automobiles were manufactured – controlled – by one company. Shortages, if and when they occasionally might occur, could be quickly rectified by moving resources around within the parent company to increase supply of needed items.

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