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Electronic manufacturers run the gamete from small shops specializing in purpose-build, single-use, and prototype devices to large billion-dollar behemoths churning out TVs, computers, and MP3 players for the global market. Those companies that fall in between include: chip foundries that make core components, those that make precision equipment such as medical diagnostic devices, and certified equipment manufacturers such as for slot machines and voting systems.
Regardless of the type of electronics manufacturer, each needs excellent supply chain management (SCM). Many electronic components are made by a single or small number of suppliers. If there is a supply chain disruption, production can limited by materials on-hand. Inventory, order entry, order placement and receiving are the most important modules of an electronics manufacturer’s management system. Manufacturing planning and scheduling are also important; these systems must also produce compliance reports as required. The key aspect is to have systems that can integrate directly with suppliers’ accounting systems to confirm stock status, shipping times, order status, and current pricing.
General ledger, accounts receivable, and payroll are standard. As part of supply chain management, accounts payable may link directly to supplier’s accounting systems for electronic payments. Enterprise resource planning (ERP) systems, integrating all aspects of managing operations, are common in electronics manufacturers but best-of-breed solutions are used as well. On-premises systems are the rule, but cloud-based manufacturing systems are becoming increasingly popular.
To address their unique business requirements, electronic manufacturers should evaluate the following functions:
|Supply chain management||Electronics manufacturers need transparency into suppliers’ systems. Order status, supplier inventory, current pricing, order entry, and payment can all be integrated between supplier and manufacturer.|
|Make/buy reporting||Many electronics systems require subassemblies. Make/buy reporting applies job estimating to subassemblies to see if it is more profitable to make or buy components. Advanced systems will factor in time to build or buy as well as cost.|
|Process planning reporting||In order to estimate and track jobs, the process for each step for fabrication must be planned and documented. The process planning reports track the development of the process plan for each product.|
|Material supplier planning||Part of make/buy process, material supplier planning assigns an bill of materials to each subassembly. This also allows make/buy decisions to be based on current market prices for material and labor for each product and production run.|
|Component substitution||If a preferred component is not available, the inventory system should provide any alternative components. The runs with alternative components should be tracked for recall management.|
|Work load planning||As part of the manufacturing planning process, shop floor managers can adjust the work load to leverage the most expensive equipment to depreciate or minimize usage of the most expensive to run. Managers can also manage work loads of shop workers, taking into account workers’ preferences.|
|Engineering change management||The system should track engineering changes and their impact on manufacturing time and cost-per-unit. It should also be easy to enter the changes into the system so that the changes can flow to other products and the overall production schedule.|
|Serial number management||Serial numbers must be linked to specific products, including any variations such as color options. The numbers must be tied to production runs as part of recall management.|
|Federal Communications Commission (FCC)||Any electronic device sold in the United States that emits radio frequency interference (RFI) must be registered with the FCC. The system should produce the information required to complete the registration process and provide updates if the design changes.|
|EPA compliance reporting||Electronics manufacturers are subject to the EPA’s Mandatory Greenhouse Gas Reporting Rule Subpart I. The system should prepare compliance reports as required.|
|Consumer labeling management||Electronics manufacturers are required to provide labeling for various countries and states, such as Canadian Standards Association (CSA) approvals and California Proposition 65 warnings. The system should track which standards apply for each product and provide labeling specifications as required.|
|Certified design management||If the manufacturer produces certified electronics, the system should provide compliance reports for the certification authority. It should also enforce the stipulations of the certification, such as no component substitutions or no changes in software.|
|Recall management||The system should support product recalls by identifying which runs are affected and which customers received them.|