SMT007 Magazine

SMT-Mar2016

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10 SMT Magazine • March 2016 $53.39 billion during the same period. In 2014, in fact, Apple became the first U.S. company to be valued at over $700 billion. How so? For starters, Apple produces its products at a substantially lower cost by out- sourcing its manufacturing and assembly to Tai- wan-based Foxconn Electronics (Hon Hai Preci- sion Industry), which is the largest electronics contract manufacturer, worldwide. From a cus- tomer intimacy standpoint, Apple has achieved a high level of brand loyalty, and is said to be one of the world's most valuable brands. Fi- nally, from a technology standpoint (and even though I haven't owned any Apple device yet), I believe the company's technology is one of the best there is. Well, Apple is just a simple example that I could think of based on the top secrets men- tioned above. Of course, a lot of other success- ful technology companies out there continue to remain in their businesses and industries by continuously being profitable and relevant. Meanwhile, we did a survey about profit- ability challenges and issues that electronics assemblers and contract manufacturers face. Based on our survey, chief among the issues are cost, process improvement, changing customer demand, design, training, and Lean manufac- turing. When it comes to cost, labor provides the greatest impact to profit, according to 54% of our respondents, followed by raw material costs, and then fixed costs. In line with those challenges, this issue of SMT Magazine highlights processes and strat- egies that will help electronics manufacturers address those issues and achieve profitability in their operations. For starters, MB Allen of KIC Thermal dis- cusses today's environment characterized by short production runs and frequent produc- tion line changeover. She notes that while im- proved technologies for line balancing, produc- tion planning, smart feeders, MES and more are being used more effectively to allow for faster production line changeover and less downtime, some issues persist, in particular, the reflow oven. She explains that the use of more effec- tive production planning and scheduling as well as modern data mining software to identify one or a few oven recipes may provide dramat- EnSurIng ProfItabIlIty Figure 1: According to our survey, labor costs provide the greatest impact to profit.

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