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At the beginning of each New Year, I, like many others, like to take an inventory of my life — both personally and professionally. I think about which attitudes and behaviors have served me well in the previous year, and consider which didn't quite measure up to the standards and goals I have set for myself.
If I were an electronics OEM doing a similar exercise, I think that the practice of developing manufacturing strategies based exclusively on the availability of low-cost labor would definitely fall into the category of “things to change.”
Yes, labor is a huge chunk of the cost of producing a product. But factors such as transportation costs, quality and reliability issues, and extended cash-to-cash cycle times can quickly offset the cheap labor advantage. It's a lesson that many members of the electronics supply chain learned the hard way in recent years and one I hope that small and midsized OEMs will heed as they consider entering the global fray and expanding their operations outside of their home regions.
I am not suggesting that offshoring was or is a mistake. The practice has been a great boon for the electronics sector, and the opportunities it has created for populations in less-developed economies are truly remarkable. To capture the full benefit of an offshoring strategy, however, it is essential that these outsourcing decisions be made based on a careful analysis of the total landed cost of the venture. This includes cost of the bill of materials, labor cost, transportation costs, freight and logistics cost, and cash-to-cash cycle times.
This analysis is not intended to curb globalization; rather, it should prompt OEMs to simply be more selective in their choice of production locations. In fact, at Avnet, we have already seen this total-cost approach result in an increased interest in more regionalized or “in-region/for-region” production. By establishing manufacturing bases closer to the point of consumption, our customers have found they can reduce transportation costs, improve fulfillment rates, and respond more quickly to fluctuations in demand.
As a result, we are also seeing resurgence in the popularity of contract manufacturing in regions like Mexico and Eastern Europe, as well as increasing activity in areas such as Myanmar, Vietnam, and Cambodia. And, in addition to US-based manufacturers “reshoring” production to North America, Asian manufacturers like Lenovo are setting up shop in the Americas to serve Western market demand.
Still, given the tremendous growth forecasted for developing economies, these regions are likely to remain the primary locations for in-region/for-region production. In an article entitled “Winning the $30 Trillion Decathlon,” McKinsey & Co. estimated that by 2025, consumption in developing economies could account for nearly 70 percent of all global demand for manufactured goods.
And though you might expect that a multiregional structure would exponentially complicate the supply chain, we have found that the investments made to adapt the supply chain over the past decade to support design in one region, production in another, and marketing/sales in yet another have made this transition relatively smooth. However, for OEMs unfamiliar with the nuances of a global supply chain, it is advisable to partner with a provider like Avnet, one that has both the experience and global resources required to establish and maintain a reliable and efficient multinational supply chain. For example, Avnet can provide design support and pre-production in one region and transition the supply chain to support full production in another region. This strategy can reduce lead times, increase time to market, and reduce or eliminate excess inventory issues.
So, as members of the global supply chain continue to seek new prospects to lower cost and expand their market reach, let's bid the low-cost country sourcing strategy good riddance and say hello to a new world of sustainable opportunity.
With Tesla and others selling electric cars, now is the time to differentiate among these vehicles. How safe is it standing in such autonomous vehicles?
@talex—While riding in the vehicle at 12 mph, I could barely detect movement. 12 mph is just three times as fast as walking (3 mph) and when stopping and starting, there is a gentle ramp up and down.
You do have a point though and I am sure that tether belts can be installed if the customer wants them. Since Induct is licensing the technology, the customer can add whatever they deem necessary.
Just remember that when standing on a bus or train moving at far faster than 12 mph there are no restraints other than a hand hold
script78man, you are right. At such speed, it is pretty safe.
This company was the only European company invited to participate in the DARPA Grand Challenge race for autonomous vehicles in the Mojave Desert.
Did they participate in the DARPA chanllenge, or is this a future event? How did/wil they fare in the competition?
@t.alex, i'm not sure about the standing part, but it's begining to look as if self-driving cars are MORE safe than those with human drivers (since these machines don't get distracted perhaps). Here's an interesting look at that: http://www.technologyreview.com/news/520746/data-shows-googles-robot-cars-are-smoother-safer-drivers-than-you-or-i/
The article said:
“One of those analyses showed that when a human was behind the wheel, Google's cars accelerated and braked significantly more sharply than they did when piloting themselves. Another showed that the cars' software was much better at maintaining a safe distance from the vehicle ahead than the human drivers were.”
@Script78man, you make a good point–this is an issue of public transportation generally more than a concern about self driving vehicles. It would be a double boon if, for example, there were safety mechanisms and the self-driving vehicles were also safer than having human drivers.
@Eldredge, this event happened in the past. From Wikapedia:
The DARPA Grand Challenge is a prize competition for American autonomous vehicles, funded by the Defense Advanced Research Projects Agency, the most prominent research organization of the United States Department of Defense. Congress has authorized DARPA to award cash prizes to further DARPA's mission to sponsor revolutionary, high-payoff research that bridges the gap between fundamental discoveries and military use. The initial DARPA Grand Challenge was created to spur the development of technologies needed to create the first fully autonomous ground vehicles capable of completing a substantial off-road course within a limited time. The third event, the DARPA Urban Challenge extended the initial Challenge to autonomous operation in a mock urban environment. The most recent Challenge, the 2012 DARPA Robotics Challenge, will focus on autonomous emergency-maintenance robots.
DARPA regularly comes up with new challenges, though. I believe the most recent one is about robotics.
It seems a human tendency to take something that works well and apply it as a panacea across a diverse set of issues. I think that you've hit the nail on the head in recognizing that off-shoring to reduce labor costs is not a one-size-fits all panacea. What questions should organizations be asking themselves to help develop sound strategies when reevaluating their labor sourcing strategies?
On the feature of the route and stop selection by the passengers, I am just wondering how the conflict stituations will be resolved- like when some passenger tries to change the direction of the vehicle – or something like that.
@prabhakar – Not sure how they addreess that problem either. Maybe they use dedicated routes (could have a choice of more than one) with pre-determined stops you can choose from. Couold be other ways to handle it too.
“The vehicle is recharged by induction — using magnetic fields — without the need for cables or human intervention, allowing it to be self-sufficient and run 24 hours a day.”
Steve, can you elaborate little bit about this charging technology. Is the road is equipped with some electric or magnetic strips for charging the moving vehicle.
“On the feature of the route and stop selection by the passengers, I am just wondering how the conflict stituations will be resolved- like when some passenger tries to change the direction of the vehicle – or something like that.”
Prabhakar, shuttle service means through pre defined routs and hence there is no conflict. Otherwise also, it can mention only the stops in that particular root.
Hi Jacob,
Navia's propulsion system uses Lithium-Polymer batteries and a 15″ instant wireless recharging system that gives the shuttle a boost of juice at each stop.
Here is Qualcomm's wireless charging system information link http://inhabitat.com/qualcomm-announces-plans-to-test-new-wireless-ev-charging-technology-in-london/
“Navia's propulsion system uses Lithium-Polymer batteries and a 15″ instant wireless recharging system that gives the shuttle a boost of juice at each stop.”
Scipt78man, such wifi recharge can be happen for short while, when the vehicle is at the station. Is it sufficient to pull the vehicle to next stop?
Hello Jacob,
When the vehicle arrives at the station, passengers need to disembark and possibly other passengers need to board. In this relatively short time, the charging is only “topping off” the battery level. If the vehicle does this at each stop, it keeps the battery from needing a full re-charge for a longer time. The battery will not typically discharge too much from stop to stop within a neighborhood region or small city. It's an electric vehicle in operation.
“In this relatively short time, the charging is only “topping off” the battery level. If the vehicle does this at each stop, it keeps the battery from needing a full re-charge for a longer time. The battery will not typically discharge too much from stop to stop within a neighborhood region or small city. It's an electric vehicle in operation.”
Scipt78man, am not sure how far it's practically feasible. The power required for moving the vehicle from one station to other can be get recharged through this wifi contacts; then its fine.
Hailey, this is a good point. I am wondering if, in a perfect scenario, all the cars in the street are driving themselves instead of being controlled by human, will they all be able to achieve the best efficiency of speed and lowest rate of accident?