Editor’s note: This is the second part of a series examining the electronics industry’s response to the global Covid-19 pandemic.
Electronics companies are adjusting their business strategies in the wake of the global Covid-19 pandemic. Hand in hand with a push for efficiency is a greater willingness to invest in and work toward automation and digitization.
“This year, Covid-19 exposed many supply chain weaknesses, illustrating just how far some companies were from being able to understand their product development ecosystem, especially remotely,” said John Mitchel, president and CEO, IPC. “The coronavirus acted as a catalyst for much of the electronics industry to accelerate their adoption of several of the transformations that were ‘nice to haves’ or good to talk about in the 2010’s.”
Technology may be the most important tool in the arsenal for electronics organizations. “We’ve used every digital tool at our disposal to make sure we could continue to provide remote support for the products in the field, and we’ve even been able to support many new equipment installations,” said Juan Arango, managing director, Koh Young America.
Now, investment in infrastructure and applications to safeguard and streamline the supply chain makes sense to everyone. “Manufacturers are seeing real value in taking a software-first approach to automation, improving the capacity, capability and quality of their operations,” said Amar Hanspal, CEO and co-founder, Bright Machines.
Especially for those in the lower tiers of the supply chain this move to digitalization is particularly critical. “As a material supplier and innovator, we are deep in the supply chain, meaning we are subject to some of the biggest bullwhip effects,” said Ross Berntson, president and COO, Indium Corp. “In other words, demand fluctuates greatly. We are relying on communication systems and data analytics that link us to end user demand while also increasing the flexibility and velocity of our production processes to be able to surge when demand spikes.”
Manufacturing here or there
Over decades, the electronics industry has grappled with the question of where to manufacture, going through a conversation about off-shoring, near-shoring, re-shoring and more. “Covid-19 has exposed some issues with those over extended supply chains with too great a dependence on Asia and in particular China,” said Mark Wood, CEO of Microart Services. “We’ve seen many customers and prospects respond to this, exploring the possibility and value of sourcing closer to home, and closer to their customer.”
In the U.S., the result has been heartening. Koh Young’s Juan Arango said: “In the Americas, the manufacturing industry has done an amazing job filling the gaps when overseas supply chains have been challenged or disrupted and this bodes exceptionally well for the future as we move into more uncertain times. There has been a lot of talk about bringing more manufacturing and manufacturing jobs back from Asia and the U.S. has shown that they have the creativity, capabilities and capacity. The U.S. has always been the epicenter of innovation, so why shouldn’t it be the epicenter of innovative smart manufacturing.”
Europe, too, may benefit from a renewed, post-pandemic interest in manufacturing closer to home. “Many of the dynamics of 2020 have led brands to think long and hard about where they make their products and we’re happy that France, and indeed Europe, will likely end up winning more business as a result,” said Bruno Racault, CEO of ALL Circuits, adding that France and Germany are both committed to drawing manufacturing back to their shores.
The past year has put the spotlight squarely back on some of the benefits of putting manufacturing near the end customer, even if it costs a little more.
This feature is based on Philip Stoten’s discussions with more than a dozen CEOs of major technology companies. You can see the full transcripts on Philip’s LinkedIn in an article entitled, “What’s the SCOOP – Post Pandemic Innovation Boom”.