Hey
buyers -- Does anyone remember what your priorities were for 2013? Do the words
"flexibility" and "resilience" ring a bell? Guess what? Your new top job
is cutting costs.
The Institute of Supply
Management -- which represents purchasing professionals across all major
industries -- surveyed about 500 of its members. The No. 1 concern among buyers
isn't building resilience -- it's cutting costs. Moreover, buyers say that they
didn't meet their cost-cutting goals for 2013.
I
know the economy is still dragging and competition is fierce. I also know one of
procurement's main responsibilities is to get the best possible pricing on
components. But I have to wonder where the 2014 cuts are going to come from:
hasn't the industry been in self-improvement mode for more than a decade now?
Haven't we implemented LEAN, JIT, BTO, MRP, ERP, TQM and dozens of other
acronyms? Aren't we already doing job of two-plus people?
Sure,
there are still inefficiencies in the supply chain and LEAN, TQM etc. are
ongoing practices that never really end. They are also supposed to cut costs. So
if we are doing a good job with our acronyms, how come costs aren't going
down? The ISM reports only 20 percent of companies
substantially cut costs in 2013. In fact, most procurement
executives are expecting that the total amount they saved in 2013 won't meet
business expectations:
- 60 percent expect to deliver 10 percent or less in savings.
- 20 percent estimate 11-20 percent in reductions.
"Delivering marginal savings
should be a trigger for procurement teams to take a step back and assess what's
working well, what isn't and how the function can improve," said Mickey North
Rizza, VP of strategic services at BravoSolution (which conducted the survey
with ISM.) "If savings aren't driving the business forward, procurement needs to
find new and more meaningful ways of impacting the
business."
Wow. Good luck with that. Suppliers and
distributors already feel that prices have been hammered down as far as thy can
go. Automation has replaced human tasks and software can place an order for
replenishment. Moving this stuff to the cloud is the next order of business and
companies that have done that have cut costs. But algorithms don't form
relationships and they don't negotiate very well. Short of eliminating humans
altogether, you have to ask the supply chain: How low can it go?
Actually, the ISM report is a good read
and has lots of good data. It also provides solutions to some of the supply
chain' s problems. I recommend you read it -- and then get back to
work.
Speaking of good reads, EPS Contributing Editor Douglas
Alexander provides his perspective on CES in
Barbara
Jorgensen
EPS
Managing Editor
barbara.jorgensen@epsnewsonline.com |
 |
 |
|
In
the interconnect, passive and electromechanical (IP&E) device market, EPS
readers were most interested in learning more about what's happening at Molex
after the acquisition by Koch Industries. Link
EPS' December Hot
Products
This month's top product picks
are all related to efficiency. These products, ranging from MOSFETs to
transceivers, deliver energy, power or system efficiency, and in some cases,
significant power savings across several industries. In addition, many of these
devices are housed in small packages to save board
space. Link
Top 10 Electronics Supply Chain
Risks
The global electronics supply chain will this year
confront again some of its old demons and dozens of new ones, ranging from
natural disasters to man-made misadventures, management blunders, troubled
acquisitions and failing to anticipate and respond to changing market
conditions. So far, though, nothing on the horizon indicates the electronics
industry should be bracing for a major shock to the supply chain in
2014. Link
Distributors on the front line of the design chain are
feeling optimistic about 2014. While the first half of the year might start out
slowly, the second half is expected by both manufacturers and distributors to be
better than the prior half - and the prior year. Link
The top
10 most read new product introductions in 2013 ranged from sensors and ferrite
beads to op amps and 32-bit microcontrollers. Link
.Xilinx Inc. (NASDAQ: XLNX) is hot with investors and the
analyst community. Link
Philadelphia-based PEI-Genesis has a highly-focused business model
that the company is taking global. Link |
|
 |
|
Having
established itself as a major force in the global economy, China is turning its
attention to social reforms and has announced policies that will resonate
throughout the electronics and other manufacturing industries. Link |
In light of the snowstorm and artic cold
blast that parts of the United States experienced recently, I would say that the
No. 1 item on my Internet-of-things (IoT) wish list is quite
practical. Link |
Although overall revenue growth in the
aerospace and defense (A&D) industry is projected to grow five percent in
2014, global revenues for defense companies is on a downward trend, falling 1.3
percent in 2012 and 1.9 percent in 2011, according to Deloitte
Touche Tohmatsu Limited (DTTL). The good news: Commercial aerospace demand
continues to grow. Link |
Supply Chain 2014: Avnet's
Analysis
The
electronics supply chain of course hopes that demand for products will pick up
in 2014. But components and systems are only part of the story. A well-managed
supply chain can cut costs and help increase profits for global electronics
companies. Link |
|
| |
|
Copyright © 2013. All Rights
Reserved.
|
 Sign Up for All of Our
Free Email
Newsletters | | | |
