Integrating Advanced Logistics Solutions into Electronics Manufacturing: Enhancing Efficiency and Reducing Time to Market
By Nick Fryer, Vice President of Marketing, Sheer Logistics
Electronic products are made up of a wide range of individual components. Each component needs very specific, and sometimes rare, materials to create them. Most companies that supply these components operate in different corners of the globe, completing just one element of a much bigger project. In electronics manufacturing, a lack of advanced logistics solutions limits production success. It creates delays. Most importantly, it impacts customer perception and product reliability.
Advanced logistics solutions can offer numerous additional benefits. Properly utilized for your organization’s very specific goals, they can save money and time and get products to market faster. The electronic market is valued at over $464 billion, and revenue is expected to continue to grow by nearly 9% year-over-year. It is one of the most competitive industries in the world, with thousands of players all vying for the consumer’s purchase. Without a plan to improve delivery times and order accuracy, companies suffer painful losses. However, there are ways to trim this timeline and improve outcomes in doing so.
The Role of Logistics in Modern Electronics Manufacturing
The electronics manufacturing logistics industry includes many elements, from the sourcing of materials to distributing the final product to the retailer or customer. Every party involved in the supply chain contributes to its success or challenges. That includes the designers and manufacturers, as well as those providing individual components and keeping a steady supply of raw materials available.
It involves not only the finished goods going out but also the management of raw materials and supplies coming into the company. An inbound logistics strategy is just as important as an outbound. Maintaining all of these paths with clarity, overcoming challenges, and managing changing demands is difficult. Advanced logistics offers a potential solution.
Key Challenges Faced by Electronics Manufacturers
The electronics manufacturing industry has three main components:
● Semiconductors
● Electronics manufacturing services
● Original equipment manufacturers
Focusing on these three areas, some of the most common challenges faced in the industry include the following:
● Complexity of global supply chains: A McKinsey survey of manufacturers found that 49% reported supply chain disruptions from global events created major planning challenges for their company. Political unrest and policy changes increase the complexity of these global supply chains.
● Shrinking operating margins: The more complex the supply chain, the more challenging it is to keep costs low. Additionally, companies continue to face shrinking profit margins due to increasing labor and material costs.
● Uncertain demand: The electronics manufacturing industry is highly competitive and driven by innovation and consumer demands for new technologies and products. This, plus economic volatility, makes it challenging for companies to effectively plan and align with suppliers.
● Sustainability efforts: Changing government regulations and policies related to Corporate Social Responsibility and ESG frameworks put additional pressure on companies to reduce e-waste and emissions. Companies must seek out suppliers capable of meeting those changing standards.
● Short product life cycles: As fast as the technology industry changes, there is more stress on manufacturing companies. The Consumer Technology Association reports smart home products, cell phones, and other consumer electronics are upgraded nearly every time a new version emerges, forcing changes in manufacturing frequently. This causes supply chains to be constantly in flux.
Overcoming Key Logistics Challenges in Electronics Manufacturing
Numerous opportunities exist for improvement in the electronics manufacturing sector. The core of this is implementing innovative strategies and being ready to flex. Consider these potential solutions:
● Incorporate automation to reduce labor costs and tedious tasks. Automation, in every component of the manufacturing process, takes human error risks out of the equation.
● Focus on logistics planning. Partnering with a logistics service provider such as a 3PL or 4PL can provide your business with access to the technology, people, and processes you need to increase supply chain visibility, reduce costs, and improve overall operational efficiency.
● Improving the agility of the supply chain means finding closer-to-home sources for raw materials. Adjusting relationships with suppliers can also help meet compliance objectives.
● To improve product lifecycle, utilize better forecasting technology and product research into consumer use and needs.
● Incorporate reuse and recycling methods to reduce supply chain demands for raw materials, lower costs, and improve timelines.
Benefits of Improved Logistics in Global Electronics Markets
Every supply chain is unique. However, across the board, making these types of changes by improving, simplifying, and building a more robust, real-time logistics solution can offer numerous benefits:
● Reduced overall costs associated with raw material availability.
● Alternative solutions are ready to meet needs when supply chain disruption occurs. Improved efficiency keeps margins within healthy limits while also helping to meet sustainability goals.
● Products get to market faster, reducing the risk of stockouts and maintaining consumer satisfaction and loyalty
● Better oversight for fast-changing market conditions to allow organizations to adapt quickly.
Future Trends Shaping Electronics Manufacturing and Distribution
Manufacturing and distribution continue to evolve and become more effective, efficient, and reliable over time. Some of the technologies expected to improve the industry even more so, according to EETimes, include:
● Further digitization includes a continued push towards IoT.
● Artificial intelligence, one of the most hyped resources for companies, will improve efficiencies by offering reliable alternative solutions.
● AR and VR aid in manufacturing, distribution, and whole supply chain efficiencies, reduce injury risks in factories and provide better insight into product development and functionality.
The incorporation of advanced logistics in the electronics manufacturing industry is not an “if” situation but a “when.” Companies that embrace this technology now reduce the risk of playing catch up in an ever-tightening market.
