The electronics sector has one of the diversified product bases of any industry in the world. Activities range from the production of printed circuit boards to advanced devices incorporating artificial intelligence and edge computing abilities. Applications range from consumer electronics (forecast to be worth US$1.787 trillion in 2024) to military equipment and ‘smart factories’. The global growth rate was in excess of 4% in 2018, led by Asia and the Americas (5% each), with Europe lagging (2%). OEMs are increasingly seeking partnerships with electronic manufacturing services (EMS) companies in designing sub-assembly and finished products.
Demand: quantity and complexity
Rising demand for increasingly complex products offer revenue potential for successful first movers but risks as well. Market demands are volatile, with frequent product changes and upgrades. Electronic manufacturing services suppliers must plan to match OEMs’ need for agility and innovation.
Manufacturers must plan to be adaptable to rapid change, prepared to move up the value chain, offer higher margin services and transform fixed costs to controllable, variable revenue expenditure.
Supplies: volatility and price fluctuation
Raw materials used in electronics manufacturing include silicon; rare earths; lithium; and specialised ceramics and glass. Rare earths in particular, are subject to supply volatility and vulnerable to political and commercial pressures, including trade wars.
Manufacturers require transparent supply chains with real-time visibility and a number of sources for materials vulnerable to volatility, enabling accurate tracking and a transparent, tightly controlled demand-driven inventory.
Environmental and legislative pressures are bearing down on the materials and manufacturing methods used in electronics production. Toxic chemicals and waste must be controlled, and consumption reduced.
Automated monitoring of energy consumption, identifying and eliminating waste, excessive usage and inefficient activities and process, helps cost reduction.
The electronics sector is one of the world’s fastest-growing and most valuable industries. Speed of development is a constant threat to businesses that lag behind. Process, inventory, supply chain and productivity monitoring are all essential.
Real time visibility with paperless production processes, downtime alerts and collaborative messaging within the factory and along the supply chain help to minimise waste and boost operational efficiency.
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