It has been said that the secret to success in business is quite simple; find out what your customer wants and then do it. For those of us in electronics manufacturing services (EMS), the customer demands often follow a familiar theme – we’d like our products made faster, more flexibly and cheaper please!
Frank Cavallaro looks at ‘3 pillars of operational flexibility’ which he says the successful minority of businesses use to satisfy both demand fulfilment and cost reduction. His focus on flexibility is, I think, particularly insightful. When engaging with a customer– new or existing – a good EMS provider will always strive to understand and solve the customer’s core issue. Whilst cost and speed of supply are always considerations, and first class quality a given, it is surprising how often ‘flexibility’ is the main driving requirement. But what does it mean? It could be variations in the product itself, late configuration or changes for example, or a need to cope with sudden unexpected demands – or indeed dips in demand. All of those come with a host of equipment, manpower and supply chain implications. So, not so simple, but ultimately achievable with the right understanding and approach.
Manufacturing operations strive to increase demand fulfillment and to reduce costs. But, too often these objectives seem mutually exclusive in practice. In fact, a 10-year study by Accenture of nearly 250 businesses across industries and sectors found that only 11% were meeting both goals. So what are the 11% doing differently? Interestingly, the study found that operational flexibility was the common thread binding these companies together. What’s more, they were able to achieve flexibility, reduce costs, and increase demand by adhering to three key principles of operations.