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AUGUST 2020 I SMT007 MAGAZINE 9 by Sagi Reuven, SIEMENS DIGITAL INDUSTRIES If you follow the financial reports in electronics manufacturing, you know that the average cost of materials can easily represent around 90% of the cost of the product. In addition, we can all agree that during the last decade, the number of products man- ufactured and their complexity is skyrocketing. If you pour into this mix the demand to lower the cost and shorten the time-to-market, the only way to thrive is to master how to get the most out of your resources. (To read the full column, click here.) Sagi Reuven is a business development manager for the electronics industry, Siemens Digital Industries. Download your free copy of the book The Printed Circuit Assembler's Guide to… Advanced Manu- facturing in the Digital Age from Mentor, a Siemens Business, and visit for other free, educational titles. Lean Digital Thread: Driving Productivity Excellence—Lean PCB Manufacturing Nolan Johnson is managing editor of SMT007 Magazine. Nolan brings 30 years of career experience focused almost entirely on electronics design and manufacturing. To contact Johnson, click here. Christophe Begue). In one of his recent articles on inventory management [1] , Quentin wrote: "Electronics is an industry where some companies seem to have ample cash, and others have constant issues maintain- ing sufficient cash flow. The problem can be especially noticeable in the electron- ics manufacturing services (EMS) industry, where a kind of double jeopardy exists: first, they are often paid by their custom- ers on 90-day terms but must pay semicon- ductor suppliers in 30 days. Secondly, their customers' forecasts are often relatively inaccurate, forcing the EMS companies to hold inventory for weeks to months. Bottom line: they often are forced to pay for components long before they get paid for the assemblies containing those components." What we learned from building our August issue was that good inventory management not only helps smooth out your inbound sup- ply chain and cash flow, but that there is ongoing development work to improve inven- tory management within the walls of your factory that can cut down on labor hours (increasing staff availability for decision-mak- ing tasks), increase pick-and-place line effi- ciencies, improve management of consign- ment parts, and more. In our previous reporting on smart factories, we've tried to determine how an EMS firm can get started on moving toward Industry 4.0. Perhaps, for some, inventory management is a great place to start. We're interested to hear what you think. SMT007 Reference 1. Quentin Samelson, "Five new blockchain use cases for electronics," Medium, June 5, 2018.

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