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34 SMT007 MAGAZINE I MARCH 2021 I'd like to start with a quote by Aristotle: "We are what we repeatedly do. Excellence, there- fore is not an act, but a habit." Are current manufacturing processes no lon- ger suitable for electronics? Newer consumer- buying patterns are pressuring factories to rely on technology to become more dynamic and agile. e latest technologies can be success- ful in streamlining certain processes, but the whole business process, entrenched in bad habits, merits real change. Here we present five of the most shocking manufacturing statistics positioned to yield the best change-enabling opportunities—the pan- demic and the tariff wars took it to the extreme. 1. Ninety-five percent of manufacturing businesses focus on optimizing just 1% of their total business cost. e once competitive edge of accessing lower-cost labor by offshoring manufactur- ing is now insignificant. Yet, it holds our focus while we ignore other compelling factors. e true proportion of manufacturing vs. other costs is profoundly obvious when you compare a light purchased from a Chinese web- site for $3.96 (with free shipping) and the same light priced at $19.97 at a local hardware store. An onshore factory with direct shipping via a small internal, flexible warehouse would be positioned for far greater success than the man- ufacturing models offering the light for $19.97 with their current distribution setup. e labor costs in the onshore example may be much higher than the corresponding fac- tory in China, but those costs are small in com- parison to the cost savings from distribution. 2. SMT operations often run at as little as 20% absolute productivity. Why rely on methods of reporting that enable artificially inflated levels of production? e truth is that very few SMT operations function in a high-volume way due to pres- sures to produce a high mix of products and cope with sudden changes in demand. Setup time, changeover time, etc., are oen (falsely) considered "unavoidable" losses. A factory running at 20% absolute productivity (instead of 80%) yields a startling manufactur- ing-per-product cost that is 400% higher than need be. Lost productivity can be regained by employ- ing common feeder setups that adapt dynami- cally to customer demand patterns, achievable with today's best soware. Achieving Operational Excellence Is a 'Must Have' Lean Digital Thread by Sagi Reuven, SIEMENS DIGITAL INDUSTRIES SOFTWARE Figure 1: Automation is not only about hardware and software.

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