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Increasing globalization, rapidly changing market conditions, and the introduction of new technological advancements are all having an undeniable impact on the efficiency and effectiveness of the electronics manufacturing supply chain.
And as we've continued to observe the impact of the ongoing global electronics components shortage, any challenge to the supply chain has the potential to cause major disruption. Even small hiccups, delays or shortfalls in supply can have dire financial and economic consequences.
Ultimately, it will be down to an electronics manufacturer's procurement and supply chain team to identify, and put in place, the strategies and requirements for the company's supply chain network.
Whether you currently manage your own end-to-end electronics manufacturing, or you have opted to outsource to an electronics manufacturing services (EMS) provider, there are five essential issues (and potential risks) to bear in mind when assessing the value and reliability of any proposed new supplier.
1. Responsiveness to New Technology
As the electronics manufacturing landscape continues to evolve, is your potential supplier actively participating in the latest advancements in technology and data management? Do they have the technical capability and proven track record of delivering y defect-free products consistently on time and in full? Are they actively managing their data to minimize risk? And are they open to future advancements that will improve efficiency?
According to the IDC FutureScape: Worldwide Manufacturing Report, one-third of all manufacturing supply chains are predicted to be using analytics-driven cognitive capabilities by 2020. And by 2021, it's expected that 20% of the Global 2000 manufacturers will rely on advanced embedded intelligence technologies, all of which will require suppliers to cope with new compliance measures, cost structures, and supply capabilities.
2. Compliance
Proof of adherence to relevant local, regional, or international standards, policies, and regulations will also be crucial to a successful relationship. Is your supplier able to demonstrate compliance with applicable wage and labor laws, for example? Do they abide by the legislative requirements of Waste Electrical and Electronic Equipment Recycling (WEEE); Registration, Evaluation, Authorisation, and Restriction of Chemicals (REACH); and Conflict Minerals or Restriction of Hazardous Substances (RoHS?)
3. Transparency
Manufacturers will often base big decisions on the quality, reliability, and candidness of the information contained in financial reports. Can your prospective supplier offer you complete transparency in their financial and performance reporting? Are they willing (and able) to contribute to the prospective partnership by providing real added value?
4. Company Culture
Securing a supplier with the right company fit can also be invaluable for ensuring a long-lasting relationship. Do they provide a humane and supportive work environment for their employees? Are they committed to upholding equality of opportunity, and opposing any form of discrimination, across all staff? Does their company culture align with your own company values? Are they an organization that is invested in the process of continuous improvement across all their operations? And what innovation and imagination are they promising to bring to the relationship?
5. Environmental Sustainability
From an environmental perspective, does your prospective supplier conduct themselves in a way that protects and minimizes their impact on natural resources? Are they playing an active role in implementing and evolving best practice environmental sustainability policies (such as ISO 14001), whether that's through the reduction of waste, green energy initiatives, the use of recycled materials, or innovative approaches to packaging?
If you’re looking for ways to increase competitiveness in electronics manufacturing, then supply chain reliability is likely to be one of your key areas of focus. The agility and security of your suppliers are crucial not only in ensuring that production runs smoothly but also that it supports the ongoing development of new products, keeps your customers satisfied, and provides your business with a competitive advantage.
Neil Sharp is the director of marketing for JJS Manufacturing.
