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?
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.