Modern Rules of Electronic Industry Manufacturing Capacity Utilization
Modern Rules of Electronic Industry Manufacturing Capacities Utilization.
In this fast-growing economic situation, the demand for electronic goods has skyrocketed due to the increase in buying power. Therefore, in such a scenario it will be deemed obsolete to have a conservative approach with respect to the electronics manufacturing capacities. Keeping aside excess manufacturing capacities foreseeing a surge in demand or seasonal demand is the traditional approach. However, this needs significant rethinking as the surge may be temporary and the manufacturing plants may not function at 100% capacity throughout the year. Also There may be times when these are underutilized for prolonged periods, therefore cutting down the profits.
How to utilize Electronic Manufacturing Capacities Optimally to Increase Revenues?
The following modern rules of electronic manufacturing capacities provide the solution.
1. Use Production Planning Software for Electronics Manufacturing
Production planning and scheduling software solutions help in generating an effective and scalable production plans. The plans are based on actual capacity, material availability and customer delivery requirements. This in turn will increase the efficiency of resources, shorten lead times, and help in identifying unutilised capacities. This leads to reduced costs and increased revenue.
2. Invest in Equipment and Manufacturing Technology
Investing in new equipment and technologies not only helps in improving operations, it also enable speedy production of higher quality electronic goods. For example, the use of 3D printing to create new tooling has shown to provide promising results in aiding production and testing.
Therefore, the electronics manufacturer should make an objective assessment of the available latest technology. Based on assessment he should choose the one that best fits his product line and business needs.
3. Utilise the Concept of Shared Manufacturing
Manufacturing industry is moving in the direction of socialization, interconnection and platformization. As a result, the concept of shared manufacturing is gaining popularity.
What is Shared Manufacturing?
Shared manufacturing to put it simply is the sharing of manufacturing capacities through peer-to-peer (P2P) collaborations.
Traditional factories have difficulty balancing their manufacturing resources, production orders and manufacturing capabilities. Some factories may have sufficient manufacturing resources and capabilities but few production orders. Meanwhile others may have sufficient production orders but lack manufacturing resources and capabilities. Shared manufacturing comes to the rescue in such scenarios and bridges the gap.
In this kind of approach, depending upon the scenario, the electronics manufacturer can either be the customer and use the manufacturing capacities of other manufacturers. Or be the producer, where he provides his unutilized manufacturing capacities to other manufacturers.
The different kinds of shared manufacturing capacities are as below:
- Sharing of production orders where the electronic manufacturer has too many orders to deliver on time. In such cases he may share these with other manufacturers in order to fill the gap of insufficient manufacturing capabilities.
- Sharing of manufacturing capacities to others who lack sufficient manufacturing resources to expand production.
For eg., a computer numerical control manufacturer (CNC) can have a large amount of production resources. At the same time, a start-up company may be unable to purchase the CNCs due to their high cost. Then, the start-up can use the manufacturing resources of the CNC manufacturer and derive economic benefits by not investing in CapEx.
contract manufacturing is a kind of outsourcing where the electronics company outsources few or all parts of its end-to-end manufacturing needs to contract manufactures. The contract manufacturers utilise their excess manufacturing capacities to produce the goods on order from these companies.
Many of the prominent and well-known electronic brands make use of contract manufacturing facilities, thereby saving cost, and increasing revenue by focusing on core business activities such as design and development, marketing, R&D , etc.
There are several listed companies in cities like Mumbai, Bangalore, Coimbatore, Kannur, Gandhinagar, Hyderabad, etc. who do big-time contract manufacturing for well-known electronic brands.
The recent announcement of the Indian government of a Rs. 76,000/- crore package for the development of a sustainable semiconductor and display ecosystem in the country will provide a major thrust to the semiconductor and display manufacturing industry.
The program aims to provide attractive incentives to companies / consortia that are engaged in Silicon Semiconductor Fabs, Display Fabs, Compound Semiconductors / Silicon Photonics / Sensors (including MEMS) Fabs, Semiconductor Packaging (ATMP / OSAT) and Semiconductor Design. This will definitely boost the contract manufacturing opportunities in the electronics sector.
To facilitate shared manufacturing and contract manufacturing in the electronics manufacturing sector, there needs to be an intermediary mechanism. Mechanism can enable electronics manufacturers to share information about their excess manufacturing capacities worldwide. And at the same time assist potential customers to get sufficient relevant information on available manufacturing capacities.
A digital technology platform like Capximize (https://capximize.com/) through its algorithm-based recommender system enables to connect these entities and provide global visibility. This platform provides up-to-date information about manufacturing capacities that deal with PCB assembly, encasing, plastic moulding/injection moulding and electronic components such as capacitors, resistors, switches, transformers, etc.