Supply Chain Management in Electronics Contract Manufacturing
In today’s ultra-competitive global electronic business, shorter product cycles, higher inventory turns, faster time-to-market requirements, and effective supply chain management are just a few of the challenges that every OEM has to face.
Traditional Supply Chain Management (SCM) Addresses Two Aspects:
- Product flow: It manages the movement of goods all the way from suppliers to customers (sometimes including customer service and after-sale support.)
- Information flow: In this function, SCM oversees order transmissions and delivery status updates throughout the order processing cycle via a typical enterprise or order management software.
Today, SCM has evolved from operational into something more strategic in nature. It now seeks to align customer’s business objectives with the best supply chain strategy that an electronic contract manufacturer (ECM) partner is capable to implement. Therefore, an effective SCM may need to cover activities from design to logistics.
Ideally A Comprehensive SCM is Comprised of the Following Components:
Design and Engineering
New Product Introduction
Board Level Test Solution
Full System Assembly (aka Box Builds)
System Level Test Solution
Warranty & Repair Service
In a nutshell, effective SCM programs are focused on implementing strategic initiatives with updated business tools and processes to improve the overall effectiveness and efficiency of OEM operations in designing, manufacturing and the delivery of electronics products.
For example, an ECM can design a customer’s supply chain and inventory control system to mitigate the effects of demand volatility. The ECM can also implement mass customization in terms of low-volume-high-mix (LVHM) to configure customer’s product to order, and to provide global delivery.
A process-oriented approach to SCM is necessary for best-in-class performance of an ECM. Consequently, performance improvement of SCM programs hinges heavily on the flexibility and agility of an ECM being able to respond to an OEM’s demands. In other words, the ECM should always welcome an on-going feedback from OEMs to continuously improve supplier’s performance.