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76 SMT Magazine • March 2016 Manor: If the material is someplace we con- trol then it's a very strong ROI. Usually in nine months return on investment. We do have to do a lot of changes in implementation and be very exact. A lot of labeling is required. This re- ally has to be a change from the incoming ma- terial, registration, to all across the shop floor. But if you do it right, you can get it. The other thing you get is compliance. If you're an EMS and you want to make automo- tive, aerospace, or medical stuff, this thing re- ally gives you as a byproduct a much more veri- fied process. You can trace the process and that makes you much more compliant. Usually com- pliancy is important because the EMS compa- nies want to be compliant and want to show the design organization, the OEM, their customer, that they have a very bulletproof process. But there is ROI in that. The materials is where we can actually prove the ROI. And then if we do a compliancy and material project we say, "Guys you get the return on investment and you're compliant." That's usually a win-win for every- body in the organization. And that's the way to sell it internally and to management. Matties: So when it's all put together they're run- ning 4.0, big data, and all that. Is this what we call a smart factory? Manor: Yeah, I think you can probably call that a smart factory. Matties: The race is who can get there first be- cause the competitive advantage is for those who adopt this the fastest, right? Manor: Definitely. So let's say 15 years ago was all about economies of scale and the big EMS companies would just do this procurement of components, a lot of machines, manpower, and low cost. This is how they competed but that's really dying out. Salaries in China are going up. The compliance has been driven up, especial- ly in Asia, where we see a lot of smart manu- facturing being discussed in Korea and China. We're going to see these countries really invest in these kind of things to automate everything and be as competitive as they can with this. We're definitely going to see the OEMs and the EMS companies invest in this and try to market themselves as the smartest factory. Matties: Oren, is there anything else that we should talk about that we haven't covered regard- ing this topic? Manor: That's a good question. Maybe one oth- er thing is product portability. We know today that customers want to switch the production between different factories and that's because supply and demand changes. You might be mak- ing, let's say, a consumer electronic product in China, the Chinese market kind of goes down and suddenly you see a lot of demand coming from Brazil. Your shipping cost is very high so you would rather move production from China to Brazil. This movement of the production is very expensive for the customer. He has to do a full NPI cycle again. The manufacturing en- vironment in the Brazil factory is probably dif- ferent than the Chinese factory, with different people, and that takes a lot of time. With this smart manufacturing we can also make that a much leaner and a smoother transi- tion. We see all of the global players here talk- ing about, "We want to be much more flexible in moving the production between sites." So if our customer comes and says, "Guys I want less units in Latin America and I want more units in Europe." Or, "I want to switch production." He wants us to be able to quickly move the produc- tion between the site and not have to do a full NPI cycle. A couple of years ago, I was talking to a large EMS company and they told me that they actu- ally shipped a lot of the lines on boats between " If you're an EMS and you want to make automotive, aero- space, or medical stuff, this thing really gives you as a byproduct a much more verified process. " MEntor graPhICS' orEn Manor IntErvIEw