Is your company evolving as fast as technology is?

First quarter is always a great time to review business practices and consider improvements. In the EMS industry, this is more important than ever. The past few years have brought few manufacturing equipment technology leaps, but information technology resources and tools have opened the doors to more efficient project data migration, project status visibility and overall data access. The trend of supply-base rationalization in terms of lowest total cost continues. And demand variation continues to drive both internal management challenges and greater competition. In short, if you haven’t analyzed process efficiency (including business process efficiency) and your strategy for brand differentiation in a few years, this is a good time to do it.

What are the areas where technology improvements should be evaluated?

• Project launch. Software tools for automating design for manufacturability (DfM) and obsolescence risk management have proliferated. One of the key areas where an electronics manufacturing services provider can add value is in identifying issues before they become issues. This is even more important in an era where smaller, more powerful products drive bleeding-edge designs. Similarly, tools for documentation data migration are widely available. Project transfer speed can be a differentiator.
• Paperless shop floor control. Some EMS companies develop impressive internal systems, while others modify off-the-shelf systems, but the bottom line focus is ensuring real-time tracking of critical production status indicators. Cloud-based computing is making it easier to share data and custom reports with customers. This level of visibility can be a double-edged sword. While shared visibility helps create a seamless environment between a contractor and its customers, in times of extreme supply disruption it can be a tool that helps a customer micro-manage its contractor. Think carefully about what level of visibility fosters strong partnerships.
• Program management support systems. This is another area where EMS companies are creating impressive tools and modifying off-the-shelf packages. The best implementations proactively highlight unaddressed action items and automatically communicate with team members.
• Collaborative computing. One of the biggest issues companies face is information overload. Just as production floors bottleneck in push systems, so do team communications. Having a strategy and the right tools for ensuring that relevant information (meeting notes, action item status lists, critical emails) are accessible by the program team is important. Setting up that information so it can be pulled by team members or at least selectively communicated so that the full team isn’t constantly bombarded with emails not critical to their part of the project helps minimize the overload factor. In some cases this may be part of the program management support system; in others it may be a shared folder system on an internal or cloud-based server.

Most companies have had all or some elements of these systems in place for years. The key to driving competitive advantage is finding ways to utilize the systems in ways that provide measurable customer benefits and, most important, help eliminate inefficiencies present in more manual processes. Telling customers you have Valor, Agile, Aegis or other comprehensive packages isn’t as powerful as demonstrating how use of those systems has shortened project launch time, reduced material liability or identified an obsolescence issue before it became a component shortage. The quality of team and the value of the results driven by creative system implementations are differentiators, and that type of “sales pitch” is difficult to replicate.

The other big challenge is finding ways to continually analyze and improve processes as technology improves and additional tools become available. A good analogy is phone systems. Developed nations were early adopters of landline telephone systems and upgraded these systems as technology evolved. Comparatively, as some third-world countries evolved into developed countries, they skipped the expense of installing massive landline infrastructure and adopted lower infrastructure-cost cellular technology to take telephones to the bulk of their population. Companies that adopted these types of systems more recently typically have both functionality and cost advantage. However, early adopters may have a higher level of customization and integration into their operations. The key is continuing to build on the initial foundation as the technology evolves. Having a roadmap that defines gaps or next steps is a good way to ensure that evolution occurs.

The EMS industry is built on the concept that contract manufacturers can build things faster, better and cheaper than their customers. Part of that equation is manufacturing expertise, but an even larger part is creativity in designing processes and systems that cut time and cost by eliminating non-value-added activities. The playing field in that area is changing dramatically, and it is good for customers and the industry as a whole.

Susan Mucha is president of Powell-Mucha Consulting Inc. (powell-muchaconsulting.com), and author of Find It. Book It. Grow It. A Robust Process for Account Acquisition in Electronics Manufacturing Services; smucha@powell-muchaconsulting.com.