Why the “rise of the robots” might be a good thing for workers.
Once a year, I like to take a column to look at the trends I’m seeing for the coming year. I think 2020 is going to be fairly good for the electronics manufacturing services (EMS) industry.
The trade war finally appears to be cooling down. Both China and the US have been hurt by it, and I think both sides have reached the point where they realize that not reaching an agreement will cost both of them lucrative manufacturing sectors, since China is seeing production migrate to Southeast Asia, and the US is seeing production move to Mexico. As I write this, the phase 1 deal has yet to be signed. If it does get signed in early-2020 and tariffs begin to lift, that could remove the trade-war-driven drag on the US manufacturing economy. The signing of USMCA will also have some positive effects and hopefully improve the competitiveness of US manufacturing within North America.
Workers need to understand the “why” of manufacturing and how to manage processes.
The pace of technological change continues to increase. Products are getting smaller and more challenging to build. The increased levels of automation needed to build those products are driving a need to rethink the role of the personnel associated with those machines. The worker who fills those new jobs needs to understand the “why” of manufacturing and have the critical thinking skills to manage processes rather than just run machines.
One example of this role rethinking is happening at Burton Industries, an electronics manufacturing services (EMS) provider whose primary manufacturing facility is in Michigan’s Upper Peninsula.
Would you stake your reputation on a new supply chain in a new region?
The one predicable outcome of trade wars is they tend to make sourcing teams evaluate their outsourcing strategies. Given that project requirements and cost drivers change over time, even without fluctuating tariffs, periodic evaluations can help better align electronics manufacturing services (EMS) partners with current needs. That said, moving to mitigate tariff concerns alone can create a cascade of unplanned costs that far outweigh the cost of tariffs.
Areas to evaluate when considering a move include:
Do you know the quiet leaders? Often they are the ones who get things done.
In 1981, when I started in the electronics manufacturing services (EMS) industry, two things really surprised me. First was that EMS factories saw tomorrow’s tech before the rest of the world. Second was the amazing amount of knowledge resident on the factory floor. That second point always drives me to challenge folks who believe it is impossible to succeed without a college degree. As long as I’ve worked in EMS, I have been exposed to factory workers who learned on-the-job the same things I did in college.
A couple months ago, I had a great conversation with Lois Kenon, a rework/repair specialist at TeligentEMS in Havana, FL. She went to work in the service sector after high school, planning to try a few jobs before going to college, but ended up staying in manufacturing. We spent time talking about her leadership philosophy, and I felt it made sense to share some of that philosophy in my column.
The flow of migrants from south of the border is choking supply-chain routes.
As we enter the middle of 2019, it appears to be shaping up as a good year for many in EMS. Anecdotally, I’m hearing the best reports in years on firm backlog from the providers I regularly talk with. I think this is part function of a good economy, but also due to the material constraints the market has experienced for several years. OEMs recognize that having orders in place can be critical to parts availability. Hopefully, this is actual demand and not the double-booking phenomenon seen in previous constrained markets.
The materials market appears to have good news as well. While a few commodities are showing longer lead-times or allocation, the bulk of component lead-times and prices appears to be stabilizing. A few have even decreased lead-times. This is good news for EMS because component availability has impacted companies’ ability to grow. This is a good time to check customer forecasts, since if orders have been inflated, stabilizing material availability may translate to a pushout
Keep talking – your customer is listening.
If I were to list deadly sins in sales, at the top would be failure to stay in touch with good prospects who are not yet ready to buy. The top deadly sin in program management is failure to stay abreast of what challenges are keeping customers up at night.
In both situations, the outcome is a sale goes to the company keeping a better tab on what that prospect or customer needs. It drives home the need for what I call mindshare maintenance. Mindshare maintenance involves regular contact with prospects and customers to remind them you are out there. When it involves prospects in the sales pipeline, it can be a periodic phone call, a link to an article or white paper the prospect might consider relevant, or a free pass to a trade show in the prospect’s region. The goal is to find a way to share useful information and remind that prospect your company is available, if they are getting ready to outsource. The benefit of doing it at regular intervals is it eventually catches companies just as they enter the ready-to-buy stage.