EMS@C-LEVEL
As Forbes, Entrepreneur, Fast Company and SCOOP writer, Philip Stoten, continues to talk to EMS (Electronic Manufacturing Services) executives he learns more about their individual and collective experiences and their expectations for their own businesses and for the entire electronic manufacturing industry.
EMS@C-LEVEL
Manufacturing Excellence Through Customer-Centric Strategies with SMTC's Bob Miller at APEX 2024
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Explore the rapidly evolving manufacturing industry with Bob Miller, Vice President of SMTC Corporation, filmed on location at Apex 2024. Bob and I delve into how defense needs and geopolitical shifts are carving new paths for production in the US and beyond.
While covering demand we explore the importance of forging strategic partnerships with customers is now more critical than ever. As the conversation turns to operational excellence with a customer-first philosophy, Bob highlights the need to align technological roadmaps with customer expectations to cement lasting partnerships.
Our chat concludes on a high note, with an optimistic look at the potential unleashed when data-driven strategies and transparent collaborations converge, setting the stage for a resilient and efficient future in manufacturing.
EMS@C-Level is hosted by global inspection leaders Koh Young (https://www.kohyoung.com) and Global Electronics Association (https://www.electronics.org)
You can see video versions of all of the EMS@C-Level pods on our YouTube playlist.
Manufacturing Trends and Collaboration in 2024
Speaker 1Hello , I'm Philip Stoughton . I'm here at Apex 2024 and I'm joined by Bob Miller from SMTC . Bob , pleasure to talk to you .
Speaker 2It's nice . I get to see you online all the time and now I get to be here live with you , which is fantastic .
Speaker 1Bob Miller in person . Let's start by just exploring some of the mega trends that we're seeing in the manufacturing industry . A lot of your business is in defense , so geopolitics is affecting that , but it's also affecting where people choose to manufacture . What are you seeing there in terms of trends and demands , maybe shifting a little bit ?
Speaker 2It's a great point . We're seeing a couple of moving pieces right On the A&D side of that . You certainly have a lot of people that have appropriations . They want to make sure that money gets spent . So sometimes lead time and money don't go hand in hand and you try to get that in and get it built and out the door . So we're seeing a trend where you're starting to see the velocity have to pick up in order to catch up the schedules . You know , on the high reliability side we have seen some trends where a lot of reshorings taking place . So we're beefing up some of our capabilities in Mexico and some of our other factories to make sure the high reliability piece comes along with that and along with the IPC standards and class three and all the rest of those things . So we're seeing a big push in a couple of those areas .
Speaker 1Yeah , and I think Mexico is really interesting when we look at companies decoupling with China . People are talking about Vietnam , India , Mexico as maybe the three key beneficiaries . You have a pretty large presence in Chihuahua .
Speaker 2We do . We have three footprints there . I mean we're employed , several thousand employees . We see a big push because of you know you have NAFTA benefits . We can get a logistics center close to the border and run across just El Paso and get stuff distributed really anywhere in the country two days ground , which is pretty beneficial . So the company as a whole has made a major investment . Our footprint has almost grown 3X in Mexico just over the last four or five years . Supply chain is becoming a little bit better velocity so we're able to get product done . We're able to get service by the major suppliers in there just as we're getting serviced here . Our supply chain is working diligently to make sure that they get those relationships put in place so it can be cross-border and we can deploy anywhere we need to be .
Speaker 1I know you're seeing improvements in the supply chain . A couple of things happened . It was hard to get parts , so it was messing with your production schedule , which is a challenge for your guys , but also it was really sucking cash in and building inventory up to a high level . Have you managed to pull that down and managed to get lead times ?
Speaker 2You know more about our business and cash flow than anyone else . So that has always been a challenge how do I get enough parts to get everything in built ? So we're seeing two trends happening Lead times on more standardized components analog digital caps , resistors , ios that's coming in . It's coming in relatively quickly . At the same time , anything that's AI-generated you look at NVIDIA today that's going out .
Speaker 2So you have to analyze that partner with your customers , understand what their needs are so that you align so when that next wave hits , same thing we went through with capacitors what four years ago ? And the same thing we've gone through with flash . And the same thing we've gone through with processors and MOSFETs and all the rest of those things . You just have to make sure we align to say what are those trends and how do I get in front of it with our customers and I imagine you probably know that better than anybody . You see it from a macro level . We see it at a micro thing to say , hey , there is military components which are going obsolete , can't get them . At the same time , you have new technologies which everyone should move to . Where's that cross point happen at ?
Speaker 1Yeah , yeah . And the other thing you mentioned there is you have to partner with your customers , and I think that's something that we really learned during the last five years of constant disruption . You know , we had the trade war , we had COVID , then we had the supply chain disruption . The only way to get through that with a customer is to just have that really open , honest collaboration and say you know , we haven't got all these parts , what can we make ? What do we need to get out of the door ? That's really built some sticky relationships and maybe given you a bit more long-term visibility with customers . Is that something you've seen ?
Speaker 2I think so . I'll just use several examples where we had customers when we went through the chip cap shortage , it was three years ago during COVID . And if you do have a relationship with a customer , you can get into their back rooms and say , hey , you're using 08-05 , you know , have 52 weeks of lead time . But if you just move to an 0402 or an 01 , you know your lead time is coming down half because they make 2x , 4x or 8x of that component . So , once again , getting information , the customer be able to posture it across their portfolio , because they don't really care that the cell phone , you know , side is really busy if they're building back office , you know server type stuff . So I think the alignment is key and critical and I think now people are more open to look at total acquisition costs as opposed to saying , hey , who is the cheapest price .
Speaker 2We like to say this Phil , everyone says I got the best lead time , I have the best quality and I have the best price . Well , we're free , perfect and instant . You get two , I get one . Which one of those don't you want ?
Speaker 1Yeah , absolutely .
Speaker 2When you say it that way , everyone's like oh yeah , I guess it is a three-legged stool and I have to have all those and it opens the door to the relationship and and want to help guide the supply chain yeah , and I think that you know .
Speaker 1I think it's really interesting as we look through the supply chain disruption . The supply , the relationships with customers , have got stronger . The relationships with distributors not so much . They've been a little bit challenged and I think what both sides need to learn from that is that fierce collaboration is the only way to make this business work .
Speaker 2Boy , I think you said that better than I've heard anybody say it Fierce collaboration . It is that back and forth that allows you to posture yourself inside a supply chain OEM distribution and the suppliers , whatever they are , and the elasticity in that chain changes , and so , being in front of it , I think is great .
Speaker 1Fierce , I'm going to use that word . Ok , we're talking about constant disruptions . The current disruption seems to be mainly economic . Obviously some challenges . With this year being an election year both in Mexico and in North America . How do you see the rest of the year panning out ?
Speaker 2We see slight growth in demand , not the same robust growth we've seen for the last three or four years . The geo side of that there's some factors that are taking place in Mexico that we're trying to keep an eye on because it does affect our labor . We're seeing the military side of that . My belief is everyone wants to get a lot of stuff out the door and to the places where it's needed really quickly so that we don't have to worry about sequestration or anything like that in the future . So you know , once again , I think the sense of urgency that these markets have created are building some momentum that we have to pay attention to .
Speaker 1And you have to remain agile . You have to remain collaborative , fiercely collaborative with those customers . Fiercely collaborative . That'll keep you going in the future .
Speaker 2I really like that . We always say cheap but cheerful . Right , we got to be low cost , but we got to get there really really quickly . So I think you hit the nail on the head . The collaboration part is really what we're going to see over the next two or three years to take advantage of these macroeconomic trends , but we also have some microeconomics that are taking place in specific markets that we want to stay ahead
Operational Excellence and Customer Focus
Speaker 2of .
Speaker 1Yeah , and it was great to speak to Mickey earlier and actually back up that your focus on customers with his extreme focus on operational excellence , Because I think this year the efficiency of the business is as important as how you operate at the front end , so it's getting both of those in synthesis that really makes a difference .
Speaker 2I think you bring up a great point , and Mickey and I are here together and really trying to understand how do we align what our technology roadmap looks like along with our customers , right ? What are we going to see here that allow us to be a better partner for our customer base ? And that's why I think events like this are tremendous , and resources that you bring to the table providing people with data , I think , is , you know , a great way to reach that fierce collaboration that you say .
Speaker 1Bob , thanks for talking to me , my pleasure . Thanks for being on the show and we'll chat again soon . Thank you , I look forward to it .
Speaker 2Okay , take care .