Issue link: https://iconnect007.uberflip.com/i/1357726
14 SMT007 MAGAZINE I APRIL 2021 of the labor force or trying to save old 20th cen- tury jobs—we're going to miss the bus com- pletely. Matties: It's market proximity as well. When you start looking at India and China, you're looking at about two and a half billion people vs. 300 million here in the U.S. Rodgers: Yes, that's actually leading to some interesting stuff. A few years ago, a large OEM decided to move its manufacture of white goods—washers and dryers, dishwashers, stuff like that—from China to Louisville, Kentucky. If you're serving a mar- ket that's fickle—a market that wanted red ones yesterday and blue ones tomorrow—you might be better off locating closer to your market. If you're selling to the U.S. market, you may be willing to accept higher costs because you need that market responsiveness. Originally, we saw a trend where Chinese consumers really wanted to buy from companies outside of China because they were associated with quality. Now, we're seeing a lot more empha- sis on buying locally made along the same lines as the "Buy American" initiatives that we see in the U.S. Matties: ere is a nationalistic mentality out there right now that we want to support our own countries, like you're saying, and there's going to be a consumer drive that may have an influence here. Rodgers: What I see from Chinese consumers is a lot more pride in local production. I think there are some Americans that feel that way, but I don't think most Americans are willing to spend more to buy something. Matties: Plus, Chinese quality has increased over the last decade. Rodgers: ey're getting a lot better. For exam- ple, Haier is becoming an international brand. Next to Lenovo, it's the most famous native Chinese brand. Holden: Yes. But we have a good case study here of a smart factory making bare printed circuit boards at lower costs than China because of their high yields. It's just that we've had the difficulty of getting that case study out among the financial people rather than techni- cal people. Matties: It's high yield, high capability, and ver y low labor cost. T h i s i s a m o d e l w h e r e y o u c o u l d plan it anywhere and compete, prov ided the base materials are there to actually make it go. Rodgers: As long as transporta- tion costs are low, you can place it just about anywhere. Matties: What should a supply chain manager be looking at? What should be their primary concerns these days, Tim? Rodgers: ey need to move away from focus- ing only on cost. ey need to think more about assurance of supply, and this is a tough one. at's one of the big lessons of the pan- demic. I don't think this has hit the electronics industry quite as much as it has hit other indus- tries, but it should be a wake-up: concentrat- ing your supply in one part of the world is very risky. We all remember the tsunami in Japan and the volcano in Iceland. ese created a lot of problems. I have a good friend who used to work at Seagate, and he said the logistical diffi-