Although there are many challenges facing electronics manufacturers today, three motifs always bubble to the top during conversations with our customers.
Operating Margins are Shrinking
Global competition and new innovations are driving prices down. Companies must continually become more cost-efficient to remain profitable. Whether Moore’s law stops being valid immediately or holds for decades, the expectation of steeply declining costs is deeply ingrained in the minds of both consumers and business decision makers. In other words, the electronics industry has to follow this trend and find ways to come up with better and at the same time cheaper goods.
Complex Global Supply Chain
With very few exceptions, every electronics manufacturing activity has been transferred to China. A huge supply chain takes finished goods to every corner of the globe on the assumption that Chinese manufacturing costs will continue to be the lowest available and that transport costs will stay within the boundaries of acceptability. More and more, companies are having to juggle internal and external resources while staying within international standards. Issues such as traceability and compliance are increasing operational burdens. Long supply chains that span the entire globe make it more difficult to trace defects and increase inertia once a product has started being supplied to markets.
Service and Warranty Management
Leveraging the global supply-chain is putting more focus on supplier quality management. Having a strong quality and traceability system directly affects warranty reserve and post-production service hours.