How manufacturers can adapt to the new normal

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Research repeatedly confirms that adaptability is the key differentiator between entities that thrive in the midst of systemic change, transformation, and uncertainty and those that do not.

The tech industry – including electronics manufacturers and supply chain operators – has had a lot to do in recent years:

  • Pandemic work disruptions and waves of resignations
  • More credible competition from an expanding global market
  • Expanding consumer protection laws and regulations regarding connected technologies
  • The breakneck pace of technology innovation, requiring rapid time-to-market and quick pivots to capture the excitement of emerging product types
  • Current and future uncertain supplies of raw materials associated with LCDs, batteries, chips and semiconductors
  • Ongoing chip shortages have resulted in $210 billion in losses for the auto industry. Meanwhile, four-fifths of the chip and semiconductor industry are struggling to hire qualified team members.
  • The “Great Resignation” – an attempt to rewrite the social contract – has come up against spiraling population growth and rapidly growing demand for tech products. The connection between these influences caught many manufacturers off guard.

The public expects to continually innovate and expand product lines, as well as pressures from regulators, supply and demand, global competition, and political or social events. As a result, electronics manufacturers must be more adaptable and smarter than ever in the face of change.

The road to adaptability

Bringing fresh thinking to product and service design, logistics techniques, and business management will help manufacturers and companies in the technology industry supply chain navigate uncertain waters.

Here’s a look at how modern electronic entities are better preparing their processes, products, and infrastructure for a changing world.

  1. Deploy automation technologies

The electronics sector lends itself perfectly to automation. Manufacturing professionals advise against using traditional ROI models in the decision-making process and instead think about the benefits over a longer period of time.

Automation is a short-term and long-term solution for electronics manufacturers regarding fluctuating labor supply and rising costs. It’s also a way to extract as much utility as possible from physical assets, like warehouses. A facility designed for automation can have up to 400% more storage capacity than a facility designed for foot traffic. The prospect of spending no more than necessary on real estate or storage space is alluring in these times.

  1. Rethinking just-in-time logistics

Electronics manufacturers and their supply chain partners have worked for years to lighten and speed up the entire logistics process. Just-in-time execution was the order of the day, and every entity in the supply chain kept inventories of raw materials, components, and finished goods as low as possible to eliminate waste.

The pressures of recent years have led to a move away from just-in-time logistics towards what is more accurately called “just in case” logistics. Storing excess parts and inventory won’t solve ongoing manufacturing challenges, but it can help shield businesses from some of the outside world’s volatilities. So will finding more reliable suppliers with a track record of timely deliveries and stock availability.

  1. Prioritize orders and buy in bulk

Electronics manufacturing service companies that want a chance to maintain stable supplies of critical products should work with customers to review their ordering habits and schedules.

Manufacturers should ask people to mark only the orders they really need as priorities and place larger orders less frequently. These measures create more realistic expectations and consistent results for everyone involved and a more efficient execution experience across the industry.

  1. Turn to less technical models

For several years, consumers have been asking for more complex, sophisticated, digitally connected and feature-rich products. Today, with the raw materials and supply chain situation being what it is, electronics manufacturers and consumers are considering reverting to more basic, less technological models.adapt, technology

Consumer technology works in cycles. The overall concept may be a matter of practicality as well as taste. Having fewer ICs in the family van and avoiding internet connectivity in the coffee maker will save resources and manufacturing capacity without significantly compromising the customer experience.

  1. Review payment windows

Hanging on to outdated or insufficient payment terms can prevent manufacturers from being as adaptable as they want.

Previously, the industry standard was to use 90-day payment windows. However, with today’s challenges and businesses needing high speed cash to keep their doors open, locking in shorter payment windows can take some of the pressure off. This gives electronic entities greater liquidity, flexibility and adaptability.

  1. Reshore as much as possible

The biggest electronics manufacturers, including Samsung and Intel, are spending billions of dollars relocating semiconductor factories and other facilities nationwide. The timing makes it an undeniable reaction to trade wars and global pandemics. However, smaller companies specializing in chips, circuits and semiconductors retreated in the United States for a time, and many never left.

The Relocation Initiative began in 2010 and has facilitated the efforts of hundreds of businesses since then. You don’t have to have a billion dollar war chest or a presidential shoutout to do it.adapt, technology

Domestic sourcing gives electronics manufacturing customers much more agility than they would if sourcing parts overseas. The elimination of expenses in shipping – not the least of which is the loss of time due to transit and the loss of money due to tariffs – is a welcome opportunity.

Meanwhile, the cost of freight is steadily increasing. Addressing these variables through relocation allows manufacturers to operate more efficiently, faster, and with the ability to adapt to emerging conditions.

Find opportunities to become more adaptable

There are many other opportunities for electronics manufacturers to change the way they operate in the name of adaptability. This determines success in the dynamic and challenging technology space. New partnerships, ways of thinking and supporting technologies can make a difference.

Author: Emily Newton

Emily Newton

Emily Newton is Technical Writer and Managing Editor of Revolutionized. She enjoys researching and writing about how technology is changing industry.