Supply chain fatigue taking hold? It’s all in a day’s work.
I can’t think of a more exciting time than now, especially for the PCB industry. Risk has always been a friend and catalyst to our industry. There has rarely been more types of risk, and never as varied, for all industries and companies, large and small, to navigate. As varied as it may be, all those challenges seem to boil down to three basic categories: technology transfer; geopolitical posturing; and logistics fatigue. The single common denominator to all? People.
My bet is that dealing with new technology, and the transfer of that technology to displace or enhance tried-and-true methodologies, is the easiest for our industry to wrap itself around. The risk and reward of new technology is well understood. It has been the hallmark of how and why we are in business and prosper. However, for those in the auto industry, which has over 100 years of understanding of mechanical and internal combustion equipment, the dawning of hybrid and electronic technologies to propel a vehicle, let alone control and monitor performance – with or without a driver – brings nothing but risk. For our industry, supplying this transfer from mechanical to electronics creates a different type of risk. Now “consumer” products must be as rugged as the toughest military or aerospace application, or even more so, because the sheer number of lives at risk are greater and the operating environment less controlled.
The risks new technology create have shifted from desktop or handheld status to large, complex, moving vehicles and equipment. A single hardware failure or software glitch can bring a successful product to a sudden, costly halt, and possibly put lives at risk. Witness Boeing’s rude awakening with the 737 Max, which the aerospace giant is now struggling to deal with. Such risk is redefining the decision tree we all must think through when dealing with new technology.
As comfortable as our industry may be with implementing new technology into different applications, we are equally uncomfortable with the geopolitical posturing now taking place. Industry in general, and ours in particular, has been a major catalyst toward globalization and has prospered mightily over the past 30 years through relatively free trade. Technology industries focus on creating “wow.” They rarely are adept at reading emotion-laden political tea leaves. At this point in time, however, we all must understand the risk the current geopolitical winds are causing.
Some of those risks come with the basic increases in costs created by the introduction of usury tariffs. Others are associated with the potential limits politically imposed on certain components or raw materials.
Our industry has mastered risk reduction by spreading new technology development or investment across the globe. That could be upset if the trade winds do not revert and those multinational teams that created exciting technology at highly competitive price points are unable to continue leveraging their collective strengths, instead falling victim to the politics of nationalism.
Uncertainty leads to fatigue, which in turn escalates risk. A recent article about “blockchain fatigue” is just one such example of industry necessarily becoming cautious (read: risk averse), versus bracing for what some believe could be a wholesale reduction to the risks and related cost of supply-chain management. It is clear why fatigue is setting in. Companies must focus on moving or reinventing their supply chains because of unsystematic geopolitical actions. Others must reinvent products because the core technology they were based on is changing. Thus, companies must rethink their future supply chains, while simultaneously pouring dollars into R&D to reinvent the end-product. The demands on talent, treasure and technology; the logistics of where to design and build product; and how to design the most cost-effective, lowest tariff path, coupled with headlines and tweets from politicians flexing their geopolitical muscles, is the perfect recipe … for fatigue!
These certainly are exciting times! Risk is omnipresent and real – and in some situations uncontrollable. On almost every front, the “same old, same old” is on the cusp of giving way to something very new. Whether developing hardware for the next generation of automobiles, or calculating where to make product that is cost-effective and “politically correct,” or sourcing raw materials that are more environmentally friendly and abundant anywhere in the world, the challenges have never been greater, nor the need for creative thinking of more value.
(As an aside, the excitement and challenges of the current environment seems lost on the next generation. Millennials do not seem to recognize that creating technology, implementing it in new ways, and juggling an everchanging supply chain – all within a world that keeps changing – can be a rewarding career. Manufacturing is not dead. Not in North America, not in Asia, not in Europe – not anywhere.)
The current environment – rich in technology, with kinetic geopolitical antics, and demanding constant review and refinement of the supplychain – is what our industry is all about. Each company must navigate the good and bad, fight off fatigue, become rejuvenated by the new, and share their passion with the next generation – so there is a next generation. There truly has never been a more exciting time.
firstname.lastname@example.org. His column appears monthly.is president and CEO of IMI Inc.;