In the electronics industry, technology leadership is key to customer satisfaction.
Are we spending too much time focused on survival and not enough time
focused on viability? Sometimes, it seems that way. We know that
survival is often reduced to bloodletting, while viability is all about
a company’s value proposition.
In these days of unprecedented economic turmoil that include daily
announcements of auctions [read: plant failures], it’s very easy to
lose sight of the future. But if there is going to be a future for any
of us in electronics manufacturing, we must begin to focus on how to
provide value going forward.
In my mind, there are basically three ways that any company can provide
value, through technology/capability, service and production capacity.
To some degree, these need to be both balanced and focused.
Production capacity seems to be working well for many Asian companies.
They have found a balance between technology/capability and sheer size,
building massive first-class facilities that Tier 1 companies flock to.
Economies of size often translate into economies of scale, enabling
purchasing leverage, capacity utilization and market clout. For those
who go this route, the facility needs to be built for the technology
demands of your target/existing customer base, and the service
proposition must revolve around handling the high volume applications
with aplomb.
For most in the Western world, being the biggest is not an option as
customers, who value size, have already migrated to lower-cost areas of
the world.
Companies of all sizes however can successfully utilize service
leadership as a value proposition anywhere in the world. The key is to
understand customers – what they consider service and what services
they are willing to pay a premium for and/or choose a supplier based
upon. I have never met a company executive in any industry who does not
believe that his or her service is excellent, if not well-above
average, and that specific service is THE reason for customer
purchases. Equally, I have yet to find any company that really provides
an outstanding service that people are willing to pay a premium for.
No question, the better the service, the greater the customer loyalty.
In some cases it is the personal touch of a visit or phone call that
works wonders, for others, the power of the Internet has the same
result. In short, service really needs to be tailored to the target
market and the customers within that market.
Service does make a difference, but I do not believe a customer makes
decisions based only on service. Technology keeps coming up as being
the most important value proposition that those in our industry must
embrace if they want to be viable. Our customers – in all markets and
geographic regions of the world – are technology companies, and
ultimately, we sell to engineers. They design then build products that
they tout as offering the best technology possible. I cannot think of
any customer who is not selling a technology solution. Equally, the
first question any potential customers ask is “Do you have the
technical capability to produce . . .?”
So, if we are in a technology industry, whom do we appear to keep
falling behind technology wise? Possibly, we are too focused on
survival to understand that the path forward must include a healthy
dose of R&D activity that ensures we are developing and or refining
our capabilities to be aligned with where our customers are going
rather than where they are. Working with competitors to enhance
technological offerings, not for bragging rights but to satisfy a
customer’s need, still seems to many in the industry to be a surefire
way to give away their company’s competitive edge. Maybe it is the only
way to keep each company’s competitive advantage, when the cost in time
and talent is too great for most companies to afford individually.
This is the perfect time for companies to refocus on what might provide
the greatest probability of being viable, long-term participants in our
technology industry. With more idle time than anyone would like, NOW is
the time to be working on development of technology solutions so
customers do not migrate to companies that offer a better value
proposition. Applying time and talent, individually or in concert with
other like-minded competitors, may provide the best ROI in these
recessionary times. Attaining technological leadership for any company,
any group of companies or any geographic region will assure a far more
profitable future and may be the spark that enables staff to rally
during these tough times.
We can provide technology leadership and true service leadership by
simply talking to our customers, understanding where their technology
is headed and developing the solutions needed to help them reach their
goals. If we choose to participate in an industry grounded in
technology, then to be viable in the long run, we must focus our
energies on being part of the technology solution. Size and service
help, but only if technology leadership is the driving force.
PCD&F
Peter Bigelow is president and CEO of IMI (www.imipcb.com);
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