Achieving the new production norm in the high tech industry

In technology markets, speed to market is essential—especially since product innovation cycles can often be measured in just a few months. Thin margins and volatile inventory levels mean production needs to be as efficient as possible, and complex processes need to be streamlined.

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Executive Brief Achieving the new production norm in the high tech industry Highlights To seize emerging opportunities, high tech & electronics companies need to focus on: • Optimizing the supply chain • Optimizing resources and inventory • Committing to quality controls and operational excellence The new ground rules for manufacturing In technology markets, speed to market is essential—especially since product innovation cycles can often be measured in just a few months. Thin margins and volatile inventory levels mean production needs to be as efficient as possible, and complex processes need to be streamlined. There’s little room for miscommunication, stock-outs, inconsistent quality, or production delays. Any one of these seemingly small production miss-steps can be disastrous, causing a manufacturer to miss an entire cycle or lose a market to the “first to arrive” upstart. As economic recovery inches along, seizing and optimizing every opportunity—no matter how small—is important for growth-driven executives. There are sales opportunities out there, but they may be isolated and difficult to uncover. Simple “hunches” are no longer sufficient to identify true opportunities. Analyzing shifting cyclical patterns, forecasting customer preferences, and responding quickly to ever-changing swings in technology innovation can be difficult. But there are tools to help high tech and electronics manufacturers turn this swirling chaos of data into a structured plan for profitability. Technology must play a vital role in managing this business intelligence challenge and streamlining mixed mode processes. Integrated IT solutions with embedded big data analytics have created new expectations and redefined the role of software solutions, transforming companies from reactive to proactive. In fact, forward-thinking high tech and electronics manufacturers are using ERP technology to perform more efficiently than ever before. These manufacturers are among the elite of lean operations, creating new best practices and operational norms. Driven by demanding customers and fierce market pressures, survival-mode has pushed them to do more, better, faster, smarter, leaner. They are rapidly setting new manufacturing production norms, changing manufacturing’s core competencies. Companies that are not joining ranks and incorporating new process improvement concepts are at risk of being pushed out by aggressive, fast-moving manufacturers in emerging markets. This is no time to “wait and see” what IT innovation or ERP trend is next on the horizon. Agile response is critical. Greater agility can help manufacturers take advantage of short-lived trends and beat competitors to market with the latest innovation or updated release. With the right software in place, manufacturers can zero in on trends early, and project the outcome over time. Advanced ERP functionality, including product lifecycle management (PLM) to speed new product introductions, and sales and operations planning (S&OP) to better manage complexity, can help forward-thinking manufacturers turn these challenges into opportunities to excel and outpace the competition. How to meet those demands To meet customer demands for speed, value, and new product introductions you need to make three key improvements: 1) Optimize the supply chain Today’s manufacturers must manage their supply chains with greater speed, scope, agility, traceability, and depth than anyone would have even imagined even a decade ago. As global economic volatility drives greater need for geographic flexibility and the ability to manage a global network of resources, your supply chain strategy now must include the ability to support multiple languages, currencies, and compliance requirements, while maintaining visibility over a wide network of suppliers, contractors, and distributors. As compliance, accountability, and traceability issues bring high risk and steep fines, it is more critical than ever that you track suppliers and resources with great detail. The only way to efficiently track and manage such a complex network and keep a watchful eye on schedules and performance is with advanced manufacturing solutions. Not only should you be able to monitor current status conditions, you need to anticipate issues and take preventive actions to avert potential roadblocks. 2 Executive brief Industry-specific supply chain management solutions provide the deep domain expertise you can count on to deliver real-time status alerts and ensure the accuracy of availability, delivery, and pending shipment information. By mastering the complex task of delivering goods to customers profitably, you can expand your network, maintain tight control, and gain visibility into critical details. 2) Optimize resources and inventory A warehouse full of unsold goods or unusable parts is an expensive and risky investment for a manufacturer. It’s essential that you strike a balance between having enough parts and products in stock to satisfy short turn-around orders, but not so much that you create an unnecessary drain on cash flow. You can strike that balance successfully by taking advantage of inventory solutions that help you quickly and accurately analyze what you have, forecast what you’ll need, and do it all efficiently. A sophisticated warehouse management and business intelligence solution can do a lot more than just help forecast product demand. It can also help you understand the optimal product mix and see how the profitability of one product compares with that of another. A surprising number of manufacturers have no idea whether an order they filled was profitable until after they’ve shipped the order—much too late to make a difference. Business intelligence solutions can help you keep customers satisfied while keeping inventory at just the right level to remain profitable. 3) Commit to quality controls and operational excellence The benefits of manufacturers’ quality initiatives extend far beyond an interest in reducing product defects, although that’s a highly desirable result. An ongoing commitment to quality has an immediate positive impact on profitability, efficiency, customer loyalty, and a range of inherent performance benefits. Quality management is particularly important in many high tech segments, especially when it comes to the consistency of function (to spec), alignment of precision parts, and electrical or digital performance quality of many electronic items. Strict quality controls often separate brand names from cheap knock-offs. You need to monitor your entire operation to ensure that all processes remain consistently efficient and reliable. You also need to oversee contractual obligations to customers, manage warranties, comply with industry regulations, and meet goals for plant throughput. Sophisticated manufacturing solutions can simplify your efforts to collect, store, and analyze data, then make that data easy to use with embedded business intelligence tools. In addition, you can also employ highly flexible solutions that even allow machines to connect with each other. This approach encompasses telematics, M2M connectivity, and the Internet of Things—all of which allow machines to use smart sensors to relay critical information back to the manufacturing system. When you employ software solutions to drive consistent quality across your operation, you’ll be better equipped to meet new challenges for speed, compliance, and cost. Take the next steps Escalating market pressures will continue to drive manufacturers like you to apply new technologies to overcome challenges. The manufacturing landscape will continue to evolve and new challenges will emerge. But high tech and electronics manufacturers that build a responsive, agile organization with the right tools and technologies face excellent prospects for success in the years ahead. 3Executive brief 641 Avenue of the Americas New York, NY 10011 800-260-2640 About Infor Infor is fundamentally changing the way information is published and consumed in the enterprise, helping 73,000 customers in more than 200 countries and territories improve operations, drive growth, and quickly adapt to changes in business demands. To learn more about Infor, please visit Copyright© 2014 Infor. All rights reserved. The word and design marks set forth herein are trademarks and/or registered trademarks of Infor and/or related affiliates and subsidiaries. All other trademarks listed herein are the property of their respective owners. This document is provided for informational purposes only and does not constitute a commitment to you in any way. 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