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Transforming Your Supply Chain Using Design for Supply Chain (DFSC)
In today's competitive landscape, supply chain efficiency and flexibility have become strategic imperatives.
Design for Supply Chain (DFSC) is a specialized discipline focused on aligning a product’s supply chain capabilities with its design. As a crucial component of the broader Design for Excellence (DFx) framework, DFSC aims to optimize supply chain efficiency and flexibility from the outset.
Are you ready to transform your supply chain?
Here are 10 key strategies that constitute a comprehensive DFSC evaluation, each contributing to the broader objectives of DFx.
Optimize Levels of Product Integration
What's Involved: Evaluate commonality, modular design, and universal function.
Example: A smartphone integrates the camera, processor, and memory, reducing assembly time and costs.
Leverage Industry Standards
What's Involved: Assess the need for unique parts and weigh the benefits of standardization.
Example: Using a USB-C port in a smartphone instead of a custom connector simplifies sourcing and enhances user convenience.
Minimize Premium Freight
What's Involved: Evaluate lead times, availability of alternate components, and local suppliers.
Example: Multiple suppliers for smartphone components reduce lead times and allow for supplier switching to avoid expedited shipping.
Design for Life Cycle
What's Involved: Identify components likely to change and design for minimal disruption.
Example: A smartphone's modular design allows for easy component upgrades.
Configure the Selected Supply Chain
What's Involved: Align the product with appropriate supply chain models.
Example: A high-volume supply chain suits a mass-market product like a smartphone.
Design for Demand & Supply Planning
What's Involved: Utilize commonality and modular design.
Example: Common components across smartphone models simplify demand planning.
Minimize Inventory Costs
What's Involved: Design for quick build-to-ship times and the use of local suppliers.
Example: Reduced lead time and just-in-time manufacturing minimize smartphone inventory costs.
Optimize Order Management
What's Involved: Design for postponement and unbundling of part numbers (P/Ns).
Example: Last-minute smartphone customization eases order management.
Minimize Warranty/Service Costs
What's Involved: Integrate diagnostic capabilities.
Example: Built-in diagnostic software in smartphones reduces warranty costs.
Sustainability Focus
What's Involved: Material sourcing and lifecycle analysis.
Example: Using recycled materials in a smartphone and its packaging meets consumer sustainability demands.
The bottom line? By incorporating DFSC into the broader DFx framework, organizations can create supply chains that give them the competitive edge they need to deliver customer satisfaction, cost reduction, and supply chain flexibility in an increasingly demanding and dynamic market environment.
The Power of DFx in Product Development
In the fiercely competitive landscape of today's industries, the margin for error when developing new products is razor-thin. The key to success? Early engagement with your manufacturing partner in Design for Excellence (DFx) — a game-changer for cost, quality, and time-to-market!
This strategic approach is not just a buzzword; it's a game-changer. It sets the stage for product cost, quality, and time-to-market—factors that determine your competitive edge, as decisions made during the design phase set roughly 70-80% of these critical parameters.
Let's delve into the transformative power of a comprehensive DFx evaluation:
Design for Supply Chain Management (DFSCM): Streamlining the supply chain from the get-go.
What's Involved: Vendor selection, logistics planning, and inventory management.
Example: Imagine reducing lead times by 20% just by selecting suppliers who are logistically closer to your manufacturing units.
Design for Manufacturing (DFM): Making products easier and cheaper to manufacture.
What's Involved: Material selection, part simplification, and process optimization.
Example: A change in material from titanium to high-grade aluminum could result in a 15% cost reduction without compromising quality.
Design for Assembly (DFA): Simplifying product structure for efficient assembly.
What's Involved: Minimizing the number of parts and optimizing their orientation for assembly.
Example: By designing a snap-fit mechanism instead of using screws, you could reduce assembly time by 30%.
Design for Test (DFT): Ensuring products are easily testable post-manufacture.
What's Involved: Incorporating test points and diagnostic features into the design.
Example: Embedding QR codes for quick scanning can expedite the testing process by 25%.
Design for Quality (DFQ): Achieving excellence in product quality.
What's Involved: Robust design practices, tolerance analysis, and failure mode evaluation.
Example: By incorporating redundancy in critical components, you can enhance product reliability by up to 40%.
DFx is not about a “one-size-fits-all” approach to product development; it's a tailored strategy that insures you new product is aligned with your specific business objectives. It's about making informed decisions early on to set the trajectory for cost, quality, and time-to-market.
The bottom line? DFx is not just an engineering practice; it's a business imperative. Engage early, design smart, and set the stage for unparalleled success.
Evaluating Electronic Manufacturing Services (EMS) Partners: 7 Essential Questions for Startups
Selecting the right Electronic Manufacturing Services (EMS) provider is a pivotal decision for any company, as the choice of partner can significantly influence the success trajectory of your product and company. In my last post, we reviewed 10 essential questions every company should ask potential EMS partners as part of their evaluation. For Startups this is even more critical given their unique requirements and dependence on partners for success.
Startups face a number of unique challenges and priorities, with speed, flexibility, and cost-effectiveness often take center stage. With this in mind, here are 7 additional questions Startups should should ask potential EMS partners as part of their evaluation:
Startup Experience: Does the EMS provider have prior experience working with startups? It is crucial for them to understand the dynamics of startups to be a suitable fit.
Complementary Resources: Do they offer engineering and supply chain resources that complement the expertise of the startup? Partnering with an EMS provider that can fill the startup's gaps and provide expertise is beneficial.
Time to Market Acceleration: Can they assist in expediting the time to market? Moreover, do they have a proven track record of assisting other startups in achieving this goal?
Support Across Product Lifecycle Phases: Can they support the startup's needs throughout every product development phase, from proof-of-concept to high volume manufacturing? Finding an EMS provider that can accompany the startup's journey from start to finish is invaluable to avoid switching providers, which can be costly and time-consuming. A dedicated NPI team is an added benefit.
Product Testing: How comprehensive is their product testing offering? Ensure that they can conduct or facilitate environmental and reliability tests and certifications if necessary for the product.
Early Supplier Engagement: Can they provide valuable insights during the design phase? This can save time and money for startups in the long run. Look for proactive partners with industry-leading toolsets and clear design guidelines.
Adaptability: Can they promptly adapt to frequent changes to product design and specifications, even if it impacts ongoing production? Startups may need to pivot rapidly based on feedback or new insights.
Through a thorough evaluation and by asking these targeted questions, Startups can find an EMS partner that aligns with their unique needs, and are able to support them throughout all stages of their growth journey. The goal is a long-term partnership that enhances your company's success, and creates a win-win scenario for all partners.
Evaluating Electronic Manufacturing Services (EMS) Partners: 10 Essential Questions
How do you ensure your EMS provider is the right fit? The answer lies in asking the right questions.
Selecting the right EMS provider is pivotal, as the choice can significantly influence your product and company's success. While needs vary by strategy and market, here are 10 questions to ask potential EMS partners:
Industry Experience: Does the EMS provider have experience in your industry, and does their portfolio match your requirements? They should understand your market and business language.
Industry Standards: Beyond standard certifications like ISO9000 and ISO14000, are they compliant with all required standards for your product, such as for medical and aerospace?
Technological Investments: Have they invested in the latest technologies and equipment? This shows commitment to innovation and providing state-of-the-art services.
Strategic Alignment: Do their strategies align with yours, and is there a cultural fit? A true partnership requires collaboration.
Manufacturing Footprint: Does their manufacturing footprint and capability align with your short-term and long-term goals? Changing EMS providers is expensive and time consuming, so finding a scalable provider is crucial.
Flexibility: Can they adapt to change in product volumes or product revisions promptly? This demonstrates their ability to adapt to changes in the market and customer needs.
New Product Introduction: Do they have a structured process for introducing new and transferred products into their factory? A dedicated NPI team is a bonus.
Pricing: Does their pricing and cost structure align with your needs, and are they actively working with you to reduce costs? This shows commitment to your success by proactively finding ways to be more cost-effective and competitive.
Communication + Ease of Doing Business: Is their communication transparent and proactive, and are they responsive to your requests? The seamless flow of information and ability to collaborate quickly and easily is crucial for a successful partnership.
Customer Feedback: Do they have a robust "Voice of the Customer" program to monitor service levels and customer satisfaction, and what are the latest results? This shows their degree of customer focus and commitment to continuous improvement.
Selecting the right EMS provider is more than a decision; it's a strategic partnership shaping your success. By asking these questions, companies can forge a partnership that resonates with their needs and fuels growth. The goal is to cultivate a relationship that drives success and creates a win-win for all partners."
Thailand's Thriving Electronics Industry
In the heart of Southeast Asia, Thailand's electronics industry has been quietly but steadily growing, transforming the country into a global powerhouse for electronics manufacturing and outsourcing, with a rich history, robust infrastructure, and a proven track record of investment and growth.
A Brief History of Electronics Manufacturing in Thailand
The electronics industry in Thailand has a long and storied history, dating back to the 1960s when the country began to industrialize, with computer hard disk companies like Seagate, Miniscribe, Maxtor, and Western Digital playing significant role in shaping the industry early on.
The Thai government has consistently made significant investments in the high-tech manufacturing sector for many years, spurring innovation and growth in the electronics and computer industries. The country has been able to attract global technology enterprises such as Toshiba, Lenovo, Canon, and HP, leveraging Thailand’s strategic location, skilled workforce, extensive infrastructure, and supportive government policies to establish successful operations in the country, all while realizing significant cost savings.
Fast forward to today, and these early investments have paid off handsomely.
Thailand's Electronics Manufacturing Industry Today
Today, Thailand’s electronics industry is thriving. With a supply chain of over 2,600 companies and nearly 360,000 employees, it is the country's largest manufacturing employer.
The industry has seen consistent revenue growth over the past several years, with electronics exports growing 29% over the past 3 years alone!
In 2021, electronics products were Thailand’s main exported products, amounting to over 42 billion U.S. dollars in value, leading other major product groups such as automotive, food, and machinery and equipment.
Why Companies Choose Thailand
There are several compelling reasons why companies choose to manufacture their electronics products in Thailand:
Strategic Location in South East Asia
Thailand is strategically located at the heart of Southeast Asia, making it a gateway to one of the world's most dynamic economic regions. This prime location provides easy access to a vast market with a combined population of over 600 million people. It is well-connected to other major Asian economies, including China, India, and Japan, through extensive road, sea, and air networks. This strategic location allows electronics manufacturers to easily distribute their products to both regional and global markets.
Skilled Workforce in Electronics and Electronics Manufacturing
d boasts a highly skilled and adaptable workforce, particularly in the field of electronics and electronics manufacturing. The country's strong emphasis on education and vocational training has resulted in a pool of workers who are not only technically proficient but also adaptable to the rapidly evolving needs of the electronics industry. This skilled workforce is a significant asset for electronics manufacturers, enabling them to maintain high standards of quality and efficiency in their operations.
Extensive Infrastructure Supporting Electronics and Electronics Manufacturing
Over the years, Thailand has invested heavily in developing a robust infrastructure that supports the needs of the electronics industry. This includes state-of-the-art industrial parks equipped with modern facilities, reliable power supply, and high-speed telecommunications networks. The country also has a well-developed logistics infrastructure, including deep-sea ports, international airports, and an extensive road and rail network, facilitating the swift movement of goods both within the country and to overseas markets.
Supportive Government Policies
The Thai government has been highly supportive of the electronics industry, implementing policies that encourage investment and growth in the sector. The Board of Investment (BOI) offers a range of incentives for companies in the electronics sector, including tax breaks, import duty exemptions, and support for research and development activities. The government also provides assistance in sourcing local suppliers and establishing industrial linkages, making it easier for companies to set up and expand their operations in the country.
Cost-Effective Operations
One of the key advantages of manufacturing in Thailand is the cost-effectiveness of operations. The country offers competitive labor costs, affordable utilities, and low corporate tax rates, all of which contribute to significant cost savings for electronics manufacturers. Additionally, the availability of local suppliers for various components and raw materials further reduces production costs and lead times. This cost-effectiveness, combined with the high quality of products, makes Thailand an attractive destination for electronics manufacturing.
Conclusion
Thailand's electronics industry, with its long history, robust infrastructure, and a proven track record of investment and growth, continues to be a beacon of growth and opportunity, offering an excellent environment for electronics manufacturing and outsourcing. As the industry continues to grow and evolve, Thailand is well-positioned to remain a global leader in electronics manufacturing.
Pichai Duangtaweesub, the CEO of Forth EMS, one of the leading electronics manufacturers in Thailand, sums up the appeal of Thailand's electronics industry as follows:
"In Thailand, we have moved beyond the old narrative of manufacturing being only about cost savings. Today, it's a strategic choice, driven by our strong capabilities, advanced technology, and commitment to quality.
Thailand's strategic location at the heart of Southeast Asia, coupled with our world-class logistics infrastructure, provides us with a unique advantage, connecting us seamlessly to the global market. Our government's proactive and industry-friendly policies instill long-term confidence in our partners and customers.
Our greatest asset, however, is our people. With a strong emphasis on education, we have cultivated a highly skilled, adaptable, and culturally diverse workforce. This human capital is the backbone of our industry, and driving Forth EMS’ continuous growth.”
The Power of Product Development Partnerships
One of the key focus areas for companies today is finding ways to increase their rate of product innovation. They need to keep up to date with changes in technology and the market, and continue to differentiate themselves from competitors. According to a recent Thomas survey, 28% of manufacturing and industrial companies in the U.S. are planning on launching a new product or service in the next year, and the Harvard Business School reports that more than 30,000 new consumer products are launched each year.
Companies today need to develop new and innovative products better, faster, and cheaper than ever before, while at the same time minimizing risk. But developing new products is costly, time-consuming, risky, and often requires specialized skills and equipment beyond the firm’s existing capabilities.
One approach that has become increasingly popular in developing new products is to partner with contract manufacturing companies. Many leading companies, such as Boeing, Samsung, and Apple, have turned to product development partnerships as a way of accelerating their development process while simultaneously reducing costs and lowering risks.
Today most leading contract manufacturers can support all phases of the product lifecycle from concept, through commercialization, to product launch. But what exactly are the advantages of this approach?
Here is a list of some of the most significant benefits, and how these translate into business results:
Reduced Development Costs
Combining your investment in expertise and capital with your partner’s investment, allows you to leverage a smaller investment in product development.
This means you can invest more into marketing and sales to help grow your overall revenue and improve your profitability, resulting in a better and faster return on investment. Development projects using a partnership model typically show at least twice the ROI of those that do not.
Faster Time-to-Market
A partner can reduce time-to-market by augmenting your existing resources, bringing in additional expertise and service in critical areas such as engineering, operations, and supply chain, allowing you to shrink your development time.
Accelerating time to market enables you to get your product to market faster than your competitors, giving you a first-mover advantage to gain market share. In addition, time-to-market is the single biggest contributor to profit after product cost. A recent McKinsey study showed that being 6 months late to market results in a 33% drop in 5-year profitability, however being 50% over budget on development only results in a 4% drop in 5-year profitability.
Better, More Innovative Products
Using a partner can give you a better and broader understanding of the innovation and options available to you to use in developing your product. Products developed in this model typically were more innovative, with better product performance, and higher product quality. This allows you to differentiate yourself from the competition and improve customer satisfaction and retention.
Partnering with a contract manufacturer can be an extremely advantageous approach for companies looking to develop new products. By leveraging the expertise and capital of your partner, you can reduce development costs, shorten time-to-market, and create better and more innovative products than if you were to go it alone.
If you're looking for help getting started with product development partnerships, or want to learn more about the benefits of partnering with a contract manufacturer, we would be happy to discuss this with you. Epic Innovations is a product development and supply chain management company that helps clients get their products to market better, faster, and cheaper. Contact us today at info@epicinno.com and let’s talk about how we can help you achieve your business goals!
Lean Six Sigma Bootcamp
Epic Innovation is proud to partner with FGCU’s Center for Supply Chain Excellence to offer an Online Lean Six Sigma Boot Camp in March. Please see below for details.
The 3 Truths of Product Development
The Three Truths of Product Development
It doesn’t matter whether the product is hardware or software, a consumer or industrial product, or a durable or consumable good, no matter what the product, there are three fundamental truths that govern the success or failure of any product:
1 - A product is just a wrapper for a solution:
Successful products must either solve a person’s problem or improves their happiness; if neither of these are true the product is a solution looking for a problem and will not succeed long term.
2 - People buy solutions, not products:
A product at it’s core must deliver value in a clear, direct and simple way; if the product cannot communicate this clearly, or is overly complicated and difficult to use, or loaded down with “features” that are not related to it’s core value proposition, it will not succeed long term.
3 - Product development is a team sport:
Product development is not owned by any one function, it needs to be owned across the entire organization and become a core function of the entire organization, supported by the appropriate accountabilities and incentives to insure alignment.