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
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