Industry Trends
OEMs - Reducing cycle times and fixed assets
Traditionally, OEMs forecast demand and push stock out to channel assemblers, who then fulfill configured orders from stocked inventories. To combat the traditional burdens of electronic manufacturing — backlog, long procurement lead-times and excess inventory — leading OEMs are co-locating assemblers on the manufacturer’s site and attempting to build direct delivery models. This shift helps to reduce cycle time between assembly operations, time-to-delivery and component inventory levels. In addition, OEMs are selling plants (to reduce the high cost of fix assets) and contracting out production to regional Electronic Manufacturing Service (EMS) providers around the globe.
Contractors - Improving fulfillment
Leading contractors have expanded their offerings to provide turnkey design, production, sourcing and repair services. They are also becoming the hub of supply chain and product lifecycle management for OEMs and have been investing in technologies that support product data management, design for manufacturability, strategic sourcing, global planning, online supplier interchange, process workflow and cross-entity visibility. The investments enable contractors to provide high responsiveness and efficient fulfillment practices.
Fabless IC - Better Synchronization
Fabless Integrated Circuit (IC) manufacturers have also taken a similar role, acting as the hub of supply chain and product lifecycle management for IC components. To facilitate and synchronize foundry lead-times and a virtual base of outsourced operations, fabless market leaders are investing in similar technologies to EMS companies with an emphasis on multi-entity reporting and outsourced operation visibility and control — using common processes, data, systems and performance metrics.
What does it mean?
The recent economic downturn has demonstrated the need for greater supply chain communication and synchronization. There is a greater emphasis on faster time-to-volume and to-order flexibility, contract services, global order management and operation visibility. Information systems that can handle to-order and lean plant initiatives, standardize global processes, synchronize multi-entity operations, provide cross-entity visibility, comply with customer requirements and monitor performance across organizations should be implemented to facilitate the change to a more demand-driven industry.
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Related Download:
Related information:
The average electronics industry manufacturer has an average “Open Payables in Days” of 40.66, while Best-in-Class performers achieve an average of 35.84
Success Stories:
Amatrol
implemented Infor ERP and business intelligence solutions for front-end versatility while retaining a highly secure information flow.
MAXRAD
manages a global supplier network reaching from Illinois to Asia and dozens of sites in between with the help of MAPICS (now Infor) solutions.
Powerex
realizes improved inventory turns, reduced material cost and a smoother flow of materials across the supply chain.
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