While the concept of digital twin or, lights out manufacturing factories, holds promise in theory, key challenges in digital twin factory manufacturing is the inherent variability in manufacturing costs between different factories. The notion of digital twin factories involves creating virtual replicas of physical manufacturing facilities, enabling real-time monitoring, simulation, and optimization of production processes. Manufacturing product cost is subject to fluctuations based on various factors, including market demand, input prices, and economic conditions and, no two factories are equal distance to suppliers, nor do such digital twins use the exact, same suppliers, workforce, equipment tolerances…
Managing your electronics bill-of-materials (BoM) becomes more challenging for equipment firms with multiple contract electronics services providers. Quickly, things can get more expensive. Adding risk can add considerable cost.
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Below, we identify the top 10 supply chain risks managing multiple contract electronics manufacturing partners
- Managing multiple contract electronics services suppliers increases the risk of a supplier failing to meet demand or experiencing disruptions, which can cause delays or disruptions in the equipment manufacturer’s supply chain.
- Risk of political instability or natural disasters. Sourcing from multiple contract electronics services suppliers in different regions increases the risk of disruptions caused by political instability or natural disasters.
- Managing multiple suppliers may require coordinating transportation from multiple locations, which can increase the risk of delays.
- Managing multiple contract electronics services suppliers increases the risk of quality issues as it can be difficult to ensure that all suppliers meet the same quality standards. There is no such thing as a digital twin.
- Sourcing from multiple contract electronics services suppliers may result in longer lead times as it can take longer to coordinate delivery from multiple suppliers.
- Risk of inventory holding costs can also arise. When sourcing finished goods inventory (FGI) from multiple contract electronics services suppliers can make things more complex and may result in higher inventory holding costs.
- Administrative overhead burden and risk also increases when managing multiple suppliers plus, contracts can be more time-consuming and may result in increased administrative burden.
- Sourcing from multiple supplier geographies may require compliance with additional customs and import/export regulations, which can increase the risk of manufacturing supply chain disruptions.
- Risk of increased intellectual property infringement can also surface when managing multiple suppliers. Many in industry feel this risk is more tied to working with electronics design manufacturers (ODM) but Venture Outsource feels every supplier should be managed against intellectual property infringement, knowing it can be difficult to ensure that all suppliers are compliant with IP laws and regulations.
- Lastly, managing multiple contract electronics suppliers does increase the risk of becoming overly dependent on a single supplier, with the majority of your manufacturing program which can also lead to disruptions in the supply chain.
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