Opportunities beckon for agile manufacturing

As the world - including the manufacturing supply chain - continues to become more interconnected, there are huge growth opportunities on offer for electronics companies to grasp.

The rise of technologies such as the Internet of Things (IoT) - estimated to be a $6tn global market by 2025 - offers new revenue streams to electronics manufacturers along the supply chain. Within manufacturing, there is a booming demand for sensors. Maintenance regimes, based on condition monitoring, use a variety of electronic sensors (such as vibration accelerometers) to collect, transmit and analyse raw machinery data. As just one example, the automotive industry is accelerating its efforts to develop electric and hybrid cars, as well as autonomous vehicles. The latter, in particular, will need huge amounts of sensors.

This insatiable need for sensors is only going to continue. An estimated 75 billion devices - connected by the IoT - will be installed by 2025, according to a recent report from Statista Research Department. Making and supplying these devices is a massive opportunity for electronics manufacturers, but it is complicated by several complex challenges.

Major challenges

For electronics manufacturers, increasing production output is not, in itself, difficult. However, this must be done against a background of complicating factors.

These factors seem to be multiplying month on month. They include: business and political uncertainty, including the new curveball of COVID-19; rising labour costs; changing levels of demand; and supply chain instability. Each one of these issues can add complexity to the process. Companies that can deal with these issues stand the best chance of succeeding; those that get it wrong can pay the ultimate price and go out of business. With so much at stake, it makes sense to adopt practices that boost the chances of success.

In this new environment, companies must respond to changing conditions as required. Those most likely to succeed will be those that are adaptable - or agile - enough to grasp these new opportunities despite the many complications.

Agile manufacturers have operations that are flexible and adaptable enough to survive in the face of the unpredictable. Agility relies on modern technology, such as digitisation and cloud computing.

Technology plays several roles: it provides the data needed to make decisions; it streamlines the supply chain; and it keeps internal and external staff connected.

However, despite the importance of technology, agility is just as reliant on a new type of company culture. An ‘agile’ company is proactive: it anticipates problems, has back-up plans and takes immediate and appropriate action when necessary.

Fostering a culture

The first step to introducing agility is to foster this agile ‘culture’. Within it, employees communicate effectively and solve problems rapidly. Communication is critical and works on many levels. On one level, it means feeding back field data in order to improve products. It also means reacting quickly to industry trends, which demand that products are modified or overhauled. Perhaps most importantly, it encourages communication between organisations, so that all partners make these changes at the same time.

Communication does not just happen at an inter-personal level. Often, it extends to delivering vital data from one place to another, for instance, the raw data from the production line, or even individual machines, that helps to boost efficiency. An agile organisation can manage and manipulate this extra data in order to anticipate problems and react to them.

Agile vs Lean

Each new manufacturing generation must get to grips with new manufacturing concepts. ‘Agility’ in manufacturing is often confused with ‘Lean’, so it’s worth making a quick distinction between the two.

Although both are concerned with improving manufacturing - and business - performance, they are implemented in slightly different ways.

In a nutshell, lean manufacturing is about reducing costs. This might be through performance measurement, removing waste or by continuous improvement measures. Agility, on the other hand, is about being in a permanent state of preparedness - with the ability to respond quickly to changing customer or market needs, by having a flexible enough production environment.

New outlooks

Solving problems has always been at the heart of business and manufacturing. Designers often rely on ‘legacy’, or historical, information to solve current problems. After all, adapting a design from an earlier project and applying to a new, though similar problem, is an efficient way of working.

However, using ‘old’ methods to solve ‘new’ problems does not always work. A good example is that of the cost of labour.

Above: The first step to introducing agility is to foster this agile ‘culture’. Within it, employees communicate effectively and solve problems rapidly

In the past, many companies simply moved production to lower cost economies to make savings. This is increasingly less appropriate in the modern world. Labour costs in manufacturing have risen in countries such as China and remained static in western economies. There are also huge concerns over delivery times, and product quality, for components made in the Far East. The Coronavirus pandemic, with its knock-on effect on air freight and the movement of people, also calls for a new approach.

The first step in becoming agile can be to step away from traditional solutions, and traditional thinking, and find new ways to maintain high product quality at acceptable cost.

Embracing outsourcing

Responding quickly to changes in technology, or market conditions, is a key to success in today’s commercial environment.

One way is by outsourcing the manufacture of electronic components, such as printed circuit board assemblies (PCBAs), to a contract electronics manufacturer (CEM). In this way, companies can focus on their core expertise, reduce risk and cost, and speed up time to market.

Over time, outsourcing itself has changed. It is no longer about identifying the cheapest provider, regardless of location. In modern electronics production, manufacturers must guarantee product quality and ensure fast delivery times. The old model of shifting production to a lower cost economy, is no longer viable. Instead, more manufacturers are making and assembling their products as locally as possible. This means using a CEM that can provide manufacturing speed and quality while ‘adding value’ to products and delivering finished products quickly.

Outsourcing eliminates the need to invest time and money setting up specialised systems, such as high-volume surface mount lines. It can also improve component sourcing: a good CEM can source parts effectively, in large volume, from accredited suppliers, in a way that a smaller electronics manufacturer never could.

CEMs add value by helping manufacturers optimise the design of their PCBAs and electro-mechanical assemblies. With their in-depth process knowledge, CEMs know how to simplify product manufacture, which can reduce cost, improve quality and enhance performance or functionality.

Introducing agile manufacturing is no simple task. It requires research, plenty of work and a long-term plan if it is to be embedded successfully. In order to do it, companies will increasingly need to reject traditional business solutions, such as ‘offshoring’, and replace them with more progressive ones. Using outsourcing, with the manufacturing flexibility it offers, is one potential avenue.

There are plentiful, and increasing, opportunities for electronics manufacturers at the moment. Becoming more agile could be one way of helping them increase their chances of success at such a promising time.