The electronics manufacturing industry has been changing rapidly over the past few years. Unfortunately, this has meant that many companies have had difficulty keeping up. While there have been various changes, a few look to continue making an impact in the coming years.
Because of the considerable impact, every company in the sector should know how they may be affected.
Trends In The Industry
Internet Of Things
The electronics industry has been increasingly embracing the Internet of Things (IoT) sphere. This is the interconnection of different pieces of equipment and appliances that are connected through an internet connection.
The electronics manufacturing industry has been leveraging this technology in various ways, each of which has had unique benefits. Prominent among these have been cost reduction, product innovation, increased efficiency, and improved safety.
This development has been driven by three pre-existing technologies, with the internet being the most obvious. Alongside this, cloud computing and smaller sensors have allowed more devices to be quickly and easily interconnected.
Most businesses have made informed decisions based on the real-time information these devices can provide. Coupled with other technological innovations, this can help drive more efficient short-term and long-term decisions.
Equipment breakdown can wreak havoc with a company’s production schedule. This results in a significant revenue loss, especially when repairs may take a considerable amount of time. This can make prevention a priority for the majority of businesses.
One of the more increasingly common ways of doing so has been with predictive maintenance. This has been done with various technologies, depending on which equipment a company uses. The widespread adoption of this technology has had a domino effect on various areas.
While avoiding the costs associated with downtime is evident, there are a few other savings. Among these is a reduced maintenance and repair cost, which is enhanced by long-lasting equipment.
Much of this is done in conjunction with IoT technology, which can monitor the health of equipment. Coupled with data collection, this can predict when and how a piece of equipment may fail, allowing business owners to avoid it.
Shifting From B2B To B2B2C
Traditionally, many electronics manufacturers have had a business-to-business (B2B) approach to operating. However, this has been shifting to the business-to-business-to-consumer (B2B2C) model in recent years, which allows manufacturers to sell directly to consumers.
This has allowed for a variety of benefits. Increased profit is prominent, as companies can avoid factoring in a retailer. It also provides a faster time to market, which many firms may want to take advantage of.
This is enhanced by better consumer data, allowing manufacturers to tweak their products or services, providing better customer relationships. Brand control can also play a factor here, as companies have more input into all sales areas.
To take advantage of these benefits, a business must leverage existing e-commerce platforms and logistics divisions.
Leveraging The Supply Chain
Being competitive in the industry is something that every company will need to focus on. This can be done in various ways, with one trend pointing toward the supply chain, as more businesses aim to avoid constant price reduction.
More innovative technology across the logistics field has meant that companies can improve their entire supply chain areas. In turn, this has allowed for a reduction in costs in several key areas. Furthermore, it has provided electronics manufacturers to operate their business more efficiently.
This encourages greater flexibility, allowing most companies to become more adaptable to changing market demands. There have been a few areas where firms have seen this, including sales and operations planning, logistics optimization, and inventory control.
Enterprise resource planning (ERP) is one of the core factors in keeping a company competitive and lean, which many businesses have seen in the past several years. This offers a few benefits.
First, it allows a firm to automate and optimize its processes using real-time information. This has the domino effect of reducing operational costs and preventing choke points throughout their operations.
ERP operations have also allowed electronics manufacturers to make quicker decisions that are often much more accurate. While these systems were often complicated and time-consuming to implement, recent technological advances have made this more manageable while increasing reliability.
These can often be much more affordable and quicker to implement than their traditional counterparts, further feeding into their use.
Larger companies have exclusively used big data. Much of this was driven by the fact that it was often inaccessible to small to medium-sized businesses. This is no longer the case, thanks to recent advances in IoT and other technologies.
Much of this is because companies can now draw information from various sources. These advances have also meant that big data has become much more helpful than it traditionally was.
As a result, electronics manufacturers have been able to use this information in various ways. Much of this is seen in reducing operational costs while increasing profit margins and market share.
This is driven by management being able to form a more comprehensive understanding of the business. As a result, they can overcome any problems while predicting and avoiding any future challenges.
VR & AR
Virtual reality (VR) and augmented reality (AR) have become increasingly helpful in several capacities. Much of this can be seen in the design phase of products, as VR can be increasingly integrated with computer-aided design.
This allows designers to make more accurate and reliable changes to a product before the production phase begins. As a result, there have been a few areas where this has been beneficial. For example, designers can make modifications to products quickly.
Alongside this is a reduced inspection time, as workers can better identify and fix errors before a product is made. This results in a reduced cost in terms of labor and the production of inaccurate or poorly designed products.
Manufacturers have seen various benefits from 3D printing, with reduced production costs being one of the most notable. This makes prototyping much quicker while allowing designers to troubleshoot and test their products quickly.
Alongside this is the avoidance of large-scale production and the need for warehousing. Traditionally, this process was time-consuming and often relatively expensive, which is reduced significantly with 3D printers.
While this may require a significant up-front investment, it has been paying many long-term dividends. It also allows for tooling to be completed on-site, which can reduce costs further.
3D printing allows for products to be created on-demand, allowing companies to experiment with more designs without needing significant investment.
Reshoring has been somewhat of an unexpected trend in recent years and has been affected by various factors. Much of this is driven by more active economies worldwide, which has increased the cost of operations in many countries, increasing wages.
Critical infrastructure often isn’t in place in countries with relatively low wages, which provides several challenges. Alongside this is increased transportation costs, which have encouraged companies to bring many operations back to the United States.
Another critical role in this has been the rise of robotics, which has offset many costs associated with manufacturing in the U.S.
Difficulty Finding Employees
Increased technology use has been a defining trend in many industries. However, training in this technology hasn’t kept pace, leading to a skill shortage in many niches. This includes the electronics manufacturing field.
As a result, many companies have had difficulty filling many of their vacancies. However, there are two ways that firms have attempted to overcome this problem: to offer training to prospective hires.
One of the more creative ways businesses have been aiming to do so is by making themselves more appealing to pre-trained candidates in this technology. This has included data scientists, computer coders, and more.
>Electronic Manufacturing Industry Stats and Growth Projections in 2023
These trends have meant that various factors are changing the industry. Several key statistics have been highlighted as a result of this. Some of the most notable include:
- Hourly downtime affects most businesses, with 98% saying it costs them $100,000 or more per hour.
- Predictive maintenance could reduce costs by 20%.
- Unplanned outages could be avoided with predictive maintenance by up to 50%.
- The majority of large companies, 72%, require 99.99% minimum uptime.
- The industry is expected to grow by roughly 8% by 2025.
- 50% of IoT spending is set to be focused on transportation, logistics, and discrete costs.
- 40% of IoT customers prefer dealing with a pre-established company.
- 63% of companies believe investing in IoT devices will increase profitability.
- Three-quarters of companies will have digitized their supply changes by 2023.
- Close to a third of companies have already implemented IoT into their devices.
Knowledge can be key when it comes to planning for the future. Every business should know what will affect the industry in the coming years. By doing so, they’ll be able to adapt and overcome any potential challenges before they impact business too severely.