SMT007 Magazine


Issue link:

Contents of this Issue


Page 49 of 115

50 SMT007 MAGAZINE I FEBRUARY 2022 Feature Interview by the I-Connect007 Editorial Team No doubt you will relate to Foad Ghalili when he expresses his concerns about the ris- ing costs to doing business, whether it's getting the right components, delivery times, or price increases. But what's unique for the president of Epoch International is the way his company has leveraged its U.S. and China operations to make the most of the other thing on everyone's mind—the labor shortage. If you're not already implementing his ideas, you will walk away from this interview with some sure-fire ideas for your own business. Barry Matties: ere's a lot of reporting on infla- tion and the supply chain, but what about the input cost impacts for the EMS providers, strategies you're utilizing to mitigate those costs to help your customers and navigate for the future. What are the trends and pressures you see right now? Foad Ghalili: When you break down the input costs into direct material, direct labor, and include facility and transportation cost, they are all under pressure right now. We are seeing a rise in every aspect, especially with semiconductors, at around 20%—that is, if you can get them. We are struggling to get components and spot buy has become a daily activity as we constantly look for different sources. We've seen semiconductors at prices two to three times than what we were paying about a year ago. Labor cost is also on the rise, both in China and in the United States, though not as bad in China. In the U.S., besides the cost, we are also dealing with a constant transition of staff in a tight market, where everyone is looking for that higher salary. We also see infrastructure costs on the rise. In China, we see a 2–3% rise in power con- sumption. e other is transportation where not only costs are increasing but also deliv- ery time. Before, we could count on delivery times of three to four days between China and the United States through FedEx. Now, if we can get things in a week, we are lucky. Gen- erally, you are seeing a major shi in every area. Demand is still strong, and the market is Going Global: Bridging Today's Labor Gap

Articles in this issue

Archives of this issue

view archives of SMT007 Magazine - SMT007-Feb2022