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Ensuring Profitability
March 2, 2016 | Stephen Las Marias, I-Connect007Estimated reading time: 1 minute
I don’t think there is a one-size-fits-all approach to ensuring a profitable business. This is especially true in the intensely competitive electronics manufacturing and assembly industry, where product lifecycles and the ever-increasing complexity and sophistication of electronics products, among others, more often than not dictate the business strategies of these electronics manufacturers.
But there are definitely sure-fire formulas for success when it comes to improving the bottom line and profits. According to an Entrepreneur article, there are three top secrets to market leadership: operational excellence—the ability to produce a company’s products and services at a cost substantially lower than its competitors; customer intimacy—having a close relationship with customers based on an excellent knowledge of your customers’ needs or business; and technological superiority—offering a product or service that’s (technologically) superior to that of your competitors.
Figure 1: According to our survey, labor costs provide the greatest impact to profit.
We did a survey about profitability challenges and issues that electronics assemblers and contract manufacturers face. Based on our survey, chief among the issues are cost, process improvement, changing customer demand, design, training, and Lean manufacturing. When it comes to cost, labor provides the greatest impact to profit, according to 54% of our respondents, followed by raw material costs, and then fixed costs.
In line with those challenges, this issue of SMT Magazine highlights processes and strategies that will help electronics manufacturers address those issues and achieve profitability in their operations.
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