Way back in the years BC (before computers), the attitude in electronics manufacturing was quite different compared to today. There were continuous trade-offs between the three critical elements; Quality, Cost and Delivery. For example, it was accepted that at times of new model introduction, market defect rates would soar, these would even be predicted with plans and resources put into place to cope with the fall-out. It was also accepted that in order to achieve deliveries to meet customer schedules, every effort and means should be expended. Incredible amounts of expensive overtime (bought me a nice car back then!), emergency labour (yes, I did see day release inmates working on the lines) and resultant dubious quality. It was a continuous trade off, cycling between the three competing goals. It was thought at the time that there cannot be a perfect world where all three elements can be achieved at the same time.
Fast forward a few years into the 90s and onwards to the present day, the situation has changed significantly. Competition from developing countries has put severe pressure on “established” manufacturers to differentiate themselves in order to survive. A critical part of this was to provide “perfect” quality at a competitive price always with “on-time” delivery, the three elements together. This quickly became the “given” in the industry for success. Projects were created to analyse and improve the operations, MRP, ERP, MES, 6 Sigma, Lean, so many different approaches to achieve this ideal. Was it worth it? Absolutely! A huge difference today in terms performance and capabilities compared to the past. Is this the end of story? Sorry, no, not by a long way….
Enter the dragon. What many people see as the Chinese phenomenon in recent years, they see as being as a result of lower costs of manufacturing, which, to a reasonable extent, it is. This is nothing new however; after all, China was not the first place that this happened, how about Mexico, Thailand or Malaysia? There is a difference though in China, something new that was not seen in these other places. Something significant. As China quickly matures now to provide the ideals of quality and on-time delivery as well as being very competitive on cost, this new fourth element becomes more significant and perhaps more dominant.
This fourth element is agility. Agility is the capability to alter product flows and capacities directly in line with market need eliminating as much stock and investment in the retail supply chain as possible. The importance of agility is rapidly increasing now as a result of the new paradigm of how products are designed, manufactured and sold. “Hit products” are the result of this process working well, competitive products introduced to the market and sold extremely quickly. In many cases in the consumer market for example most of the profit is often made only during the first few weeks of sale until competitors catch up. Selling in the internet culture contributes to this; expectations are set for very frequent new products with new technologies following new fashions. It remains difficult to predict which products in which markets are going to do well. The supply chain from manufacturer to shelf has to be shorter than it has ever been. The response and speed of change has become critical. To the manufacturer, it all means rapidly changing demand, continuous new models of many new products all over the world all at the same time. Oh, yes, and all the products still have to actually work perfectly, brand reputations are on the line.
The Chinese are good at agility. They are used to competition and will do whatever it takes to win deals. It is in their DNA. In other manufacturing environments, there is not such flexibility. Ironically, the solutions described to achieve the three critical elements of Quality, Cost and Delivery often work against agility, in spite of best efforts. It is no longer viable to run a manufacturing operation on ERP clock-work calculations founded on logic from the 1970s. Even many of the adopters of “Lean” seemed to get carried away and took agility out of the system thinking it was a waste, that dedication instead was the answer to get the most cost effective processes. So, is this “game over” for “established” manufacturing?
No. No more trade-offs, even considering the need for now the four critical elements. Recognizing these new demands on manufacturing, understanding the way that manufacturing has to respond, and understanding the practical limitations of traditional ERP and MES systems, agility has been a key factor in the development of the latest manufacturing technologies available from Mentor Graphics. A series of webinars goes into some detail of realistic solutions for Agility, as well as assuring of course the three fundamentals of Quality, Cost and Delivery. These are available to sign up for now. The webinars work to show how the picture builds, step by step, to provide an understanding of the new Valor MSS solution from different perspectives. Enjoy! This is all getting very interesting…