A free online environment where users can create, edit, and share electrical schematics, or convert between popular file
formats like Eagle, Altium, and OrCAD.
schematics.io
Find the IoT board you’ve been searching for using this interactive solution space to help you visualize the product selection
process and showcase important trade-off decisions.
transim.com/iot
Transform your product pages with embeddable schematic, simulation, and 3D content modules while providing interactive user
experiences for your customers.
transim.com/Products/Engage
AspenCore Network
A worldwide innovation hub servicing component manufacturers and distributors with unique marketing solutions
aspencore.com
SiliconExpert provides engineers with the data and insight they need to remove risk from the supply chain.
siliconexpert.com
Transim powers many of the tools engineers use every day on manufacturers' websites and can develop solutions for any company.
transim.com
We will be starting at 11:00 a.m. PST/2:00 p.m. EST sharp. First, though, there are two housekeeping notes:
First, please make a copy of your post before hitting the “post” button – just in case. If the system “eats” one of your carefully crafted thoughts, please hit “Ctrl-Z” to recover it.
Second, if you have problems posting, we suggest trying a different browser. IE9 is a popular choice, but sometimes find Firefox, Chrome, or Safari work better.
This will be a fun, fast, and friendly conversation, so please do not hold back with your comments or questions. There are no dumb questions and we value everyone's point of view.
Ken Rankin, director of high-tech segment marketing at UPS. In his job he is resonsible for: – understanding the changing supply chain needs within the fast-paced High Tech industry, – recommending, developing and executing “go-to-market” strategies positioning UPS's suite of solutions that create quantifable benefit for UPS's High Tech customers & prospective customers – driving thought leadership efforts for UPS within the High Tech industry
Simon Ellis currently leads the supply chain strategies practice area at IDC Manufacturing Insights. Within the supply chain practice, Mr. Ellis specializes in advising clients on LCS (Low Cost Sourcing), Lean, Six Sigma and more. Mr. Ellis also contributes his supply chain expertise to IDC Retail Insights research. With over 20 years of experience in the industry, Mr. Ellis most recently was the Supply Chain Strategy Director/Futurist for Unilever North America, a $12 billion division of Unilever, the maker of such well-known products as Dove, Suave, Wisk, All, Q-tips, and Vaseline. Mr. Ellis was responsible for leading the implementation of key new technologies that impacted the future of the Unilever Supply Chain. Specifically, he led the North American RFID and e-Catalog teams, and was the project leader for the new Data Management Organization.
Do the Senior Execs from IDC and UPS see a massive Amount of Growth in Vehicles using Natural Gas instead of Diesel for Transportation in North America today? Has this cut costs decisively for these companies?
To get the ball rolling, why don't you give us a bit of a recap of the scope of the study and what the study covered. That way, people will know the areas that the study and can craft their questions accordingly
This was the 4th year of the survey conducted by IDC Manufacturing Insights. This year's study was global covering nearly 350 interviews with high-tech supply chain executives. The study emcompassed 4 key areas incliding: near-shoring, customer-centric supply chain focus, high-tech product lifecycle and emerging markets.
@Jim and the supply chain of course! I'm excited, because really is there any organization who knows more about the supply chain than UPS?! I'm glad we got them to stop by before the big holiday rush…
Let me bring Jim's starting off question to the top: What sort of inventory reductions are attainable with on- or near-shoring? @simon, maybe you could weigh in
Lets get the ball rolling with one of the 1st headlines…..”Near-shoring is on the rise”…….our study found that the % of high-tech companies considering near-shoring has tripled since 2010.
@all, i was at a counterfeit components symposium and was sitting next to a guy at lunch whose speciality was helping OEMs move to mexico. According to him near shoring has a lot of advantages and the topic is only going to get hotter.
Of those companies near-shoring….a few key drivers bubbled up…..#1 improving service levels by brining production closer to demand…..#2 improving control over quality & intellectual property
Greetings all. I had a great conversation this morning with a fellow about the avocado supply chain. I whipped up some guacamole and now I'm primed to talk tech.
do the Guests here(from IDC and UPS) also believe that China is building up way too much INventory in most Electronic Components(which will evntually lead to massive Inventory Pileup)?
@Hailey Clearly moving from 10% to 27% in 2013 gives us a pretty good sense that near-shoring is gaining momentum. I would not be surprised to see this slow-gradual shift continue over the next several years. Clearly high-tech comapnies are re-eavaluating their suply chains……it's simply no longer a “set it & you can forget it” exercise
@Sellis, i also suspect it will never be all or nothing proposition. Organizations are going to do some stuff in one place and some in another. I wonder if some organizatoins won't build things in various parts of the world then bring the assembly domestic.
@tech4people This years survey did not focus on natural gas or electricity but as Simon mentioned it is certainly a factor in the near-shoring equation
Ken, Simon: Reality check. How much electronic manufacturing is going to come back to the US from China? Can you each, please give me your best guestimate as a percentage? (My guess is we're talking about a very, very small number. Am I right?)
Companies like Synnex Sanmina and Flextronics have been for years acting as finally configuration on-shore for volume produced boxes made in China for the Dells and HPs of the world. The question is are they ready to move down the assembly tree to do more integration?
Remember – near-shoring is not just about bringing supply back to the US – it is about bringing supply closer to demand; wherever that demand may be in the world.
Another factor that seems to be influencing the supply chain is the lifecycle of a product itself, which in consumer electronics is somewhere between 12 and 18 months now — and it's continuing to shrink. That isn't much to get a product from conception/design to the store shelves of BestBuy two months before Christmas.  Has that driven some of the near-shoring decisions?
@Jim, the guy I was talking to was saying that the move to Mexico was more related to the closing of thousands of factories in China–no more goverment support. They are looking for cost. I didn't hear much from him about quality one way or the ohter (Should have asked!)
Bringing Tom's question to the top again: Ken, Simon: Reality check. How much electronic manufacturing is going to come back to the US from China? Can you each, please give me your best guestimate as a percentage? (My guess is we're talking about a very, very small number. Am I right?)
@Sellis-Which is the Fastest Growing Market for Electronics today? A Place where you can't avoid Building Factories in ;so as to take full advantage of the Near-Shoring trend.
Apple is the prime target for “Made In America” The publicity would give US industry a huge boost. Apple is already moving Mac production on-shore, but that's small potatoes
Tech4People: I think you're right about that Made in USA stamp. I have a Samsung phone and I think it's a marvelous machine. But I think a lot of the world still believes that it's better if it's American.
@Hailey-Don't forget about Green-house Gas emissions.Thats the Reason by Chinese Govt are slowly but Surely Cutting incentives for Manufacturers there.
Jim:Â I think Apple is making some of its high-end machines here (or planning to) to appease its customers who were outraged paying top dollar for phones assembled for pennies in Chinese sweatshops. It doesn't quite fit with the image of Apples as tools for the elite.
@Tom, well, highest growth rates are in emerging (emerged?) countries, so from the perspective of Chinese demand, near-shoring is about building facotries there … or in India
@Tom The top driver behind nearshoring was the desire to improve service levels by bringing production to demand. This interest in reducing lead times was also a factor among high tech companies that were refocusing their supply chains toward customer centricty (71%).
India is very keen to near-shore. They expect quite a business boom as a result. It'll be interesting to see if China stays chepa enough to prevent India becoming a primary importer of electronics into the pRC
Jim: You're right about the assembly. I'm frankly amazed that it makes sense for Apple to make iPhones in China. You'd think it could be done close to the relevant market without significantly changing the unit price.
@Tom High tech companies consider themsevles product innovation experts (59%), but only average (or lagging) on the other areas of the product lifecycle, like product launch, reverse logistics and product retirement.
Another key insight from the survey revealed that high tech product launches are becoming increasingly important (48%)….but lesss than half (46%) consider themselves market leaders in this product lifecycle stage.
In terms of the findings around the high-tech product lifecycle, the study foudn that most companies do not see themselves as market leaders in the tail-end of the product lifecycle. I found that surprising. What pointers do you have for for organizations that want to enhance their capabilities at every step of the product lifecycle?
Ken, That's interesting. Apple just got the mix wrong on 5S versus 5C phones almost everywhere. A short pipeline would have avoided price dumping in some places, and prevented a dent in the “image”
Ken, your figure on innovation doesn't surprise me. In fact, I'm surprised that only 3 in 5 consider themselves strong innovators because, if you're going to be in tech, I think rule no. 1 is to Innovate.
But I am surprised that there isn't more focus on time to market. Clearly, lifecycles are shrinking and timing a product from development to sales is really getting to be the name of the game — but I'm probably preaching to the preacher on that, aren't I?
@Jim-The Indian Government has already slapped all kinds of Tariff Barriers in place to reduce Finished Electronic Imports into India.You have to basically assemble them there to save on Taxes.As India is an extremely Cost Conscious Market;that 10%-15% in Savings makes a BIG-BIG Difference.
@Hailey – great question! UPS partners with high tech companies to successfully manage every stage of their product lifecycle – from day-definite product launches to distribution/fulfillment and even post-sales/returns.
Ken: So about half the sampling thought launches were important and about half said they weren't market leaders in launches.  I”m guessing the ones who think they are good at it are the same ones who are the market leaders in it.  Is that right? Did you look at that? Â
I think there may be something to be said for the philosophy of relying more on price/value comparisons than on a strong marketing push, although I think both are important to end users.
I did a major experiment with short cycles at NCR a few years back. We got down to 12 days on hand for total inventory. We found that we could remove the need for spares inventory in the early years of product life by sparing from the line. Savings were large and spares were current.
Onshoring or near-shoring helps this along, dcompared with the traditional “Made in China” method
@Tom, i think some of the attention to the global launches comes from some big name companies doing it so well. Think Apple. But it's a lot harder than it looks!
Recycling in China is getting old for both the US and China. Dumping trash on poorer countries isn't exactly ,oral. We need to get our act together. Realising that we have some vast open spaces in the US should readjust our perspectives. A trash-handling facility in Boondocks USA might well be acceptable. It is inevitable, though greedy companies might hold it off a decade or so!!
@tech4people Yes, we're seeing demand for repair and recycling. In fact, we have solutions to address the needs of our customers. Earlier this year, we announced a collaboration with Jabil to expand our suite of product repair offerings.
I had a question as long as it hasn't answered, specifically: Are there any hot emerging markets for high and electronics that you guys can point to for us?
@Scott – great question. Our 2012 Change in the Chain study uncovered India, Brazil, China and Indonesia as 4 hot areas driven by the emerging middle class and their heavy appetite for smartphones and tablets.
Hailey: No question — big launches are planned for months, often starting while a product is still in the development phase. If there's a snag in the supply chain, the whole effort can turn into a disaster. And, yes, Apple is the epitomy of a company that normally does it well. Smaller companies must feel outclassed when competing on that level.
One of China's selling points has been metal-bending for cabinets. It's cheaper in China, but the cost of shipping finished metal is eating up the difference in cost. US makers are capable of on-demand production using laser cutters, plasma torche robots and computerized bending machines.
It is a call now as to where computer cabinets should be made, and with the cabinets goes most of the assembky work.
Small companies need to heed the “twice as fast for half the price” rule. Their biggest barrier to sales is that there is not sufficient reason to take a risk buying from them.
Today's guacamole comes from a fellow who grows 20 acres in Escondido along with about 100 plants of tobacco (Cuban seed!). He tells me his trees each need 30 gallons of water a day, but produce up to 300 pounds of fruit.Â
In my mind, this makes bringing avocados to market about as risky as bringing a phone to market. Critical timing, exacting planning, delicate handling, fickle consumers, and conditions that may be out of your control — like the price of water and predicting supply from competitors. Don't even mention off-shoring….a nightmare for California farmers.
@Ken, product security is getting really critical. Not only are the supply chain systems getting more open but also products are getting more internet connected. Check out our latest velociyt emag on the topic of security and the supply chain: http://dc.ubm-us.com/i/207639
Ken: I can't speak for anyone but myself, but centering manufacturing in Asia has never really made much sense for anyone but the largest players, and even they have gotten burned by it at times. For SMBs, the cost savings in labor (as Jim pointed out) is relatively small compared to the headaches that can go with it. And, as you pointed out, the growing markets globally suggest near-shoring will be the next critical strategy for agile manufacturing.
Has there been any kind of domino effect from GE's decision last year to bring more of its appliance manufacturing back to the US? Was that just a blip? Or are manufacturers saying, “Me too”?
The one place that I have seen gathering a lot of interest, especially in the United States, is South Amercia. The time zones line up better and there is a huge knowledge base there. Does anyone know of an concrete expamples?
Wow…this time has really flown! I have to run off soon, but want to thank Hailey for pulling this together and, especially, Ken and Simon for their clear, direct answers and facts. It's really great to have a couple of experts to put this issue into perspective.  Go big brown!
@Tom, glad you could stop by… We're going to have to draw to a close at the top of the hour, latest. so if you have any last minute questions, post them now!
Thanks Ken. SMBs are so much more nimble than big players, but big players are so much more powerful. It's always fun to watch the give and take between them — as long as you're not the CSO of the smaller player.Â
@Scott, i don't know of electornics firms, but my husband's software company has a whole engineering team in costa rica. There also seems to be less of a language barrier.
@JimC In the press. we've seen high profile companies make announcements around nearshoring. One of the objectives of our Change in the Chain study was to quantify the number of high tech companies that are planning to nearshore. Seeing the figure grow from 10% in 2010 to 27% in 2013 gives us a broader barometer of what's happening in the high tech industry.
Don't forget Europe has some paces with job problems. In fact, if anyone needs a consultant for an onshoring operation in the South-of-France, they can call me!:)
@Sellis-At one Stage it was 30% onshore and 70% Offshore,But the Sharp increases in Labor Costs Overseas(as well as Utility Costs) pushed us to bring our Manufacturing more Onshore.
@Hailey: There are also seems to be some shared experience there with Latin and South Amercia. You have Brazil as the main example, and a lot more here and there. You have a huge educated class with a desire to play on the world stage.
Ken. That's a pretty significant jump in the level of interest. How does that change the way your own company makes its own plans, in hope of keeping pace with the potential change? Do you invest differently?
@JimC UPS has the global and regional expertise to help high-tech companies move aggressively into new and emerging markets. In an effort to assist our customers, we're always evaluating services and areas in the next hot market.
@sunyc Mobile devices are certainly an enabler to the customer service equation. Our survey found that high tech companies are looking to differntiate themselves through customer service. 69% believe that better customer service performance drives improved sales.
Two-thirds of high-tech companies surveyed are in emerging markets or establishing a presence, and nearly 30% indicated that a key lesson in entering new markets is understanding how best to establish initial operations. Fascinating stuff!
@all, quick commercial break: Look to the mid right and take a second to click on our most recent flash poll. It's right on topic for today: Does executive management in your organization understand the need for alignment between business and supply chain strategy?
@Hailey 41% of the respondents expect high tech exports to grow faster over the next 2 years compared to 2013. We like the bullish outlook for exports….clearly the economy is slowly recovering and high tech companies have their eyes on the emerging markets prize.
When it comes to emerging markets, do we see companies wanting to more their whole operation, including HQ, to some of these countries? Is that a bridge too far?
@Ken: I can see where they'd play a huge role in customer service in terms of mobile intrfaces for customers to use. What about internally in the enterprise, terms of field force managment: managing drivers/routes, maximizing delivery, or in the warehouse/distribution centers?
@EBNers, thanks so much for coming by and asking great questions… there's a lot to talk about–we'lll be diving deeper into thse topics in the near future. UPS folks blog for us regularly too so keep an eye out for thier contributions!
@Scott High-tech companies are looking for best ways to enter these emerging markets, and our survey indicated 42% are looking for turn-key solution. UPS has the network & regulatory expertise to help our customers make their entry easier in these markets.
@Ken: So maybe this was asked and answered, but what does UPS help out with? All aspects or IT, or just the logistics part or a combination depending on customer needs? What do people look for from you?
@Scott UPS customizes the solution based on the customer's need. We have a full suite of solutions, including the world's largest footprint of field stocking locations – providing our customers with same day and next day capabilieis. We're the world's largest customs broker and have technology/IT visibility solutions to assist our customers. Our international portfolio reaches 220 countries.
You must verify your email address before signing in. Check your email for your verification email, or enter your email address in the form below to resend the email.
Please confirm the information below before signing in.
{* #socialRegistrationForm *}
{* firstName *}
{* lastName *}
{* displayName *}
{* emailAddress *}
By clicking "Sign In", you confirm that you accept our terms of service and have read and understand privacy policy.
{* /socialRegistrationForm *}
Registration
Please confirm the information below before signing in. Already have an account? Sign In.
AspenCore Network
News the global electronics community can trust
The trusted news source for power-conscious design engineers
Supply chain news for the electronics industry
The can't-miss forum engineers and hobbyists
Product news that empowers design decisions
Design engineer' search engine for electronic components
The electronic components resource for engineers and purchasers
The design site for hardware software, and firmware engineers
Where makers and hobbyists share projects
The design site for electronics engineers and engineering managers
The learning center for future and novice engineers
The educational resource for the global engineering community
Where electronics engineers discover the latest toolsThe design site for hardware software, and firmware engineers
Circuit simulation made easy
Brings you all the tools to tackle projects big and small - combining real-world components with online collaboration
Hardware design made easy
A free online environment where users can create, edit, and share electrical schematics, or convert between popular file formats like Eagle, Altium, and OrCAD.
Find the IoT board you’ve been searching for using this interactive solution space to help you visualize the product selection process and showcase important trade-off decisions.
Transform your product pages with embeddable schematic, simulation, and 3D content modules while providing interactive user experiences for your customers.
A worldwide innovation hub servicing component manufacturers and distributors with unique marketing solutions
SiliconExpert provides engineers with the data and insight they need to remove risk from the supply chain.
Transim powers many of the tools engineers use every day on manufacturers' websites and can develop solutions for any company.
The study results are live. Here are some links to more info on the Change in the (Supply) Chain study from UPS:
Final Press Release
Executive Summary
White Paper
Video
Test
Test
Test
Hello Ken… It's working!
Hi Folks!I am personally very-very tired(had a Long hard day at work so far)!
I am sure this EBN Chat will Cheer me up Bigtime!
Bring it on!!!
Glad you'll be with us, Tech4People! This is going to be a great one i'm sure. Stay tuned. We're starting at the top of the hour!
We will be starting at 11:00 a.m. PST/2:00 p.m. EST sharp. First, though, there are two housekeeping notes:
First, please make a copy of your post before hitting the “post” button – just in case. If the system “eats” one of your carefully crafted thoughts, please hit “Ctrl-Z” to recover it.
Second, if you have problems posting, we suggest trying a different browser. IE9 is a popular choice, but sometimes find Firefox, Chrome, or Safari work better.
Â
This will be a fun, fast, and friendly conversation, so please do not hold back with your comments or questions. There are no dumb questions and we value everyone's point of view.
Questions, theories, ideas, real world experiences and even friendly rants are welcome here.
And always, please announce your arrival so we can give you a warm EBN welcome and offer you some virtual guacamole. 🙂
Also let me intorduce our guests:
Ken Rankin, director of high-tech segment marketing at UPS. In his job he is resonsible for:
– understanding the changing supply chain needs within the fast-paced High Tech industry,
– recommending, developing and executing “go-to-market” strategies positioning UPS's suite of solutions that create quantifable benefit for UPS's High Tech customers & prospective customers
– driving thought leadership efforts for UPS within the High Tech industry
Â
Simon Ellis currently leads the supply chain strategies practice area at IDC Manufacturing Insights. Within the supply chain practice, Mr. Ellis specializes in advising clients on LCS (Low Cost Sourcing), Lean, Six Sigma and more. Mr. Ellis also contributes his supply chain expertise to IDC Retail Insights research. With over 20 years of experience in the industry, Mr. Ellis most recently was the Supply Chain Strategy Director/Futurist for Unilever North America, a $12 billion division of Unilever, the maker of such well-known products as Dove, Suave, Wisk, All, Q-tips, and Vaseline. Mr. Ellis was responsible for leading the implementation of key new technologies that impacted the future of the Unilever Supply Chain. Specifically, he led the North American RFID and e-Catalog teams, and was the project leader for the new Data Management Organization.
Do the Senior Execs from IDC and UPS see a massive Amount of Growth in Vehicles using Natural Gas instead of Diesel for Transportation in North America today? Has this cut costs decisively for these companies?
What is the Biggest Obstacle to further Efficency in the Supply Chain currently? Governments???
What sort of inventory reductions are attainable with on- or near-shoring?
Thanks for getting the ball rolling, Jim and Tech4People. We'll start in about 10 minutes
Â
For a little light reading on what we're talking about today, take a glance at these resources on the study:
The study results are live. Here are some links to more info on the Change in the (Supply) Chain study from UPS:
Final Press Release
Executive Summary
White Paper
Video
Good afternoon Hailey, Ken Rankin from UPS is here…….looking forward to our “live chat”
Â
Hello everybody! Glad to be here.
Looks like are guests are here…we'll get started in about four minutes.
I want to welcome everyon today. As always, let us know when you arrive so we can give you a big welcome and point you to the virtual refreshments.Â
To get the ball rolling, why don't you give us a bit of a recap of the scope of the study and what the study covered. That way, people will know the areas that the study and can craft their questions accordingly
Guacamole, chips and beer…the highlight of the week!
This was the 4th year of the survey conducted by IDC Manufacturing Insights. This year's study was global covering nearly 350 interviews with high-tech supply chain executives. The study emcompassed 4 key areas incliding: near-shoring, customer-centric supply chain focus, high-tech product lifecycle and emerging markets.
@Jim and the supply chain of course! I'm excited, because really is there any organization who knows more about the supply chain than UPS?! I'm glad we got them to stop by before the big holiday rush…
Let me bring Jim's starting off question to the top: What sort of inventory reductions are attainable with on- or near-shoring? @simon, maybe you could weigh in
From a simplistic perspective, you save inventory based on the lead-time reductions.
Lets get the ball rolling with one of the 1st headlines…..”Near-shoring is on the rise”…….our study found that the % of high-tech companies considering near-shoring has tripled since 2010.
Â
So if near-shoring takes your average lead-time down from 120 to 30 days, then you should be able to reduce safety stocks by 90 days.
Things are always more complex than that, but it is a place to start.
@all, i was at a counterfeit components symposium and was sitting next to a guy at lunch whose speciality was helping OEMs move to mexico. According to him near shoring has a lot of advantages and the topic is only going to get hotter.
Simon, That's a huge improvement in inventory turns. There's also a benefit in mix quality
Well, its a conceptual level, often complexities dilute things
Of those companies near-shoring….a few key drivers bubbled up…..#1 improving service levels by brining production closer to demand…..#2 improving control over quality & intellectual property
But inventory reductions can be quite dramatic
@Ken, what do you think is behind the rapidity of the shift and will that trajectory continue?
Greetings all. I had a great conversation this morning with a fellow about the avocado supply chain. I whipped up some guacamole and now I'm primed to talk tech.
do the Guests here(from IDC and UPS) also believe that China is building up way too much INventory in most Electronic Components(which will evntually lead to massive Inventory Pileup)?
Also, let's not lose Tech3Poeple's question: What is the Biggest Obstacle to further Efficency in the Supply Chain currently? Governments???
I think of it in terms of the three Ws – weather, war and workers
as the things that get in the way of SC efficiency
@Tom, glad to have you with us! I was wondering if you would show up, Guac in hand.
@Ken-Do you believe cheaper Natural Gas/Electricity in the US is not a significant factor in Near-Shoring?
Also Ken and Simon, What do you think are the most important- or surprising- findings from this year's survey?
Don't think of near-sourcing necessarily as being the US. For US demand it could be Mexico …. or the Carribean
Where you choose to make your products should be the sum total of ALL costs – energy costs are certainly part of it!
@Hailey Clearly moving from 10% to 27% in 2013 gives us a pretty good sense that near-shoring is gaining momentum. I would not be surprised to see this slow-gradual shift continue over the next several years. Clearly high-tech comapnies are re-eavaluating their suply chains……it's simply no longer a “set it & you can forget it” exercise
Mexico has been lower cost but also lower quality, and worker turnover is historically generally horrendous. Is that changing?
@Sellis, i also suspect it will never be all or nothing proposition. Organizations are going to do some stuff in one place and some in another. I wonder if some organizatoins won't build things in various parts of the world then bring the assembly domestic.
One of the more surprising things to me was how relatively poorly companies self-report managing the back end of the product lifecycle.
@tech4people This years survey did not focus on natural gas or electricity but as Simon mentioned it is certainly a factor in the near-shoring equation
Ken, Simon: Reality check. How much electronic manufacturing is going to come back to the US from China? Can you each, please give me your best guestimate as a percentage? (My guess is we're talking about a very, very small number. Am I right?)
@Hailey, yes, I think that is correct. Supply constraints, for example, may limit where you can get components, but not where you do final assembly.
Companies like Synnex Sanmina and Flextronics have been for years acting as finally configuration on-shore for volume produced boxes made in China for the Dells and HPs of the world. The question is are they ready to move down the assembly tree to do more integration?
@Hailey…..another important finding from this year's study was the “Rise of the Customer-Centric” supply chain.
@Tom-You will be surprised.The Google NExus is a World-wide Best-seller currently.
I am guessing a lot of folks love the “Made in USA ” Stamp there..
Remember – near-shoring is not just about bringing supply back to the US – it is about bringing supply closer to demand; wherever that demand may be in the world.
Another factor that seems to be influencing the supply chain is the lifecycle of a product itself, which in consumer electronics is somewhere between 12 and 18 months now — and it's continuing to shrink. That isn't much to get a product from conception/design to the store shelves of BestBuy two months before Christmas.  Has that driven some of the near-shoring decisions?
@Jim, the guy I was talking to was saying that the move to Mexico was more related to the closing of thousands of factories in China–no more goverment support. They are looking for cost. I didn't hear much from him about quality one way or the ohter (Should have asked!)
Bringing Tom's question to the top again: Ken, Simon: Reality check. How much electronic manufacturing is going to come back to the US from China? Can you each, please give me your best guestimate as a percentage? (My guess is we're talking about a very, very small number. Am I right?)
@Sellis-Which is the Fastest Growing Market for Electronics today? A Place where you can't avoid Building Factories in ;so as to take full advantage of the Near-Shoring trend.
Apple is the prime target for “Made In America” The publicity would give US industry a huge boost. Apple is already moving Mac production on-shore, but that's small potatoes
Tech4People: I think you're right about that Made in USA stamp. I have a Samsung phone and I think it's a marvelous machine. But I think a lot of the world still believes that it's better if it's American.
Foxconn is deploying robots to replace all those cheap Chinese workers. Putting a chunk of those in the US gets on-shoring done quickly!!!!
@Hailey-Don't forget about Green-house Gas emissions.Thats the Reason by Chinese Govt are slowly but Surely Cutting incentives for Manufacturers there.
@Jim, Google is another example right? Most of these big organizations are dipping their toes in the water.
@Tom 19% of the based North America survey respondents plan to nearshore, but globally, that figure was 27%.
Jim:Â I think Apple is making some of its high-end machines here (or planning to) to appease its customers who were outraged paying top dollar for phones assembled for pennies in Chinese sweatshops. It doesn't quite fit with the image of Apples as tools for the elite.
Â
@Tom, well, highest growth rates are in emerging (emerged?) countries, so from the perspective of Chinese demand, near-shoring is about building facotries there … or in India
Ken: Wow! Thank you for that. That's quite a figure. And, to clarify, those folks currently have operations offshore?
Labor is a small portion of most well-designed assemblies. I made PCs in volume, and we had just 20 minutes labor total per unit.
@Tech4People, I have to admit that i don't know as much about politics in china as i should. Guess i'm going to have to do some research!
Simon: Thanks! Got it.Â
But what is driving near-shoring the most? Is it the price of fuel, labor costs, time to market? What?
@Hailey-Just see the Air Pollution in China(Its all over the Blogosphere)!!! Its totally-totally insane today.
@Tom The top driver behind nearshoring was the desire to improve service levels by bringing production to demand. This interest in reducing lead times was also a factor among high tech companies that were refocusing their supply chains toward customer centricty (71%).
@Hailey-Couple that with Water and Land Pollution and China is in a Pretty Pickle today!
@Tom, in the survey, primary driver of near-shoring was about improving service performance.
India is very keen to near-shore. They expect quite a business boom as a result. It'll be interesting to see if China stays chepa enough to prevent India becoming a primary importer of electronics into the pRC
Jim: You're right about the assembly. I'm frankly amazed that it makes sense for Apple to make iPhones in China. You'd think it could be done close to the relevant market without significantly changing the unit price.
@Tom High tech companies consider themsevles product innovation experts (59%), but only average (or lagging) on the other areas of the product lifecycle, like product launch, reverse logistics and product retirement.
Thanks Jim: But would you please define “improving service performance?” I'm not sure what that means in this context.
@Jim, challenge in India has always been the infrastructure problems – is that changing? Probably! But will not happen overnight.
I estimated around $3/unit cost uptick to onshore iPhones, offset by savings of a robotic line, and inventtory-related costs.
Sorry: Meant this for Simon…
Would you please define “improving service performance?” I'm not sure what that means in this context.
Simon, I see millions of UPS motorbikes moving parts in India :)))
Another key insight from the survey revealed that high tech product launches are becoming increasingly important (48%)….but lesss than half (46%) consider themselves market leaders in this product lifecycle stage.
Jim: That's sounds about right, maybe even a little high. And $3 seems quite insignificant for a $500-600 phone.
@Ken, to add, material affect on lifetime profitability of a product by managing the back end of the lifecycle.
In terms of the findings around the high-tech product lifecycle, the study foudn that most companies do not see themselves as market leaders in the tail-end of the product lifecycle. I found that surprising. What pointers do you have for for organizations that want to enhance their capabilities at every step of the product lifecycle?
Ken, That's interesting. Apple just got the mix wrong on 5S versus 5C phones almost everywhere. A short pipeline would have avoided price dumping in some places, and prevented a dent in the “image”
Ken, your figure on innovation doesn't surprise me. In fact, I'm surprised that only 3 in 5 consider themselves strong innovators because, if you're going to be in tech, I think rule no. 1 is to Innovate.
But I am surprised that there isn't more focus on time to market. Clearly, lifecycles are shrinking and timing a product from development to sales is really getting to be the name of the game — but I'm probably preaching to the preacher on that, aren't I?
@Jim, 'fashion' drives hitech almost as much as technology does. On eof the reasons we see a return of postponement.
@Jim-The Indian Government has already slapped all kinds of Tariff Barriers in place to reduce Finished Electronic Imports into India.You have to basically assemble them there to save on Taxes.As India is an extremely Cost Conscious Market;that 10%-15% in Savings makes a BIG-BIG Difference.
@Hailey – great question! UPS partners with high tech companies to successfully manage every stage of their product lifecycle – from day-definite product launches to distribution/fulfillment and even post-sales/returns.
Ken: So about half the sampling thought launches were important and about half said they weren't market leaders in launches.  I”m guessing the ones who think they are good at it are the same ones who are the market leaders in it.  Is that right? Did you look at that? Â
I think there may be something to be said for the philosophy of relying more on price/value comparisons than on a strong marketing push, although I think both are important to end users.
@Ken/Ellis-Do you see Demand from Companies for Recyling Components effectively?
I did a major experiment with short cycles at NCR a few years back. We got down to 12 days on hand for total inventory. We found that we could remove the need for spares inventory in the early years of product life by sparing from the line. Savings were large and spares were current.
Onshoring or near-shoring helps this along, dcompared with the traditional “Made in China” method
@Tom Both time-to-market and time-to-volume were cited as critical aspects of the product lifecycle by 53% of survey respondents.
@Tom, i think some of the attention to the global launches comes from some big name companies doing it so well. Think Apple. But it's a lot harder than it looks!
@Tom, high correlation between companies who think time to market is important and market leaders, yes.
Recycling in China is getting old for both the US and China. Dumping trash on poorer countries isn't exactly ,oral. We need to get our act together. Realising that we have some vast open spaces in the US should readjust our perspectives. A trash-handling facility in Boondocks USA might well be acceptable. It is inevitable, though greedy companies might hold it off a decade or so!!
Simon, I think that's very true. Crisp execution is the sign of a well tuned company
Hi Everyone. I showed up a little late.
@tech4people Yes, we're seeing demand for repair and recycling. In fact, we have solutions to address the needs of our customers. Earlier this year, we announced a collaboration with Jabil to expand our suite of product repair offerings.
@Scott, glad to have you with us! I can't promise that there's any guacamole left, but i'm sure we can rustle up some chips.
I had a question as long as it hasn't answered, specifically: Are there any hot emerging markets for high and electronics that you guys can point to for us?
Â
@Scott – Welcome…we've got some guacamole for you. 🙂
Â
@Scott – great question. Our 2012 Change in the Chain study uncovered India, Brazil, China and Indonesia as 4 hot areas driven by the emerging middle class and their heavy appetite for smartphones and tablets.
Hailey: No question — big launches are planned for months, often starting while a product is still in the development phase. If there's a snag in the supply chain, the whole effort can turn into a disaster. And, yes, Apple is the epitomy of a company that normally does it well. Smaller companies must feel outclassed when competing on that level.
@Tom, its like juggling but with 105 balls. 🙂
One of China's selling points has been metal-bending for cabinets. It's cheaper in China, but the cost of shipping finished metal is eating up the difference in cost. US makers are capable of on-demand production using laser cutters, plasma torche robots and computerized bending machines.
It is a call now as to where computer cabinets should be made, and with the cabinets goes most of the assembky work.
@Ken, I find it surprising that Indonesia is on that list… but it makes sense when you think about it.
@Tom, great point. 26% of respondents said ensuring product security throughout the supply chain was a challenge during global product launches.
@Ken: That's interesting and you have half of the BRIC countries there. How did Indonesia make it's way into there.
Small companies need to heed the “twice as fast for half the price” rule. Their biggest barrier to sales is that there is not sufficient reason to take a risk buying from them.
Let's hear from you…are you considering nearshoring in the near future?
@Ken-What about Stripping the Electronic Components to extract Precious Metals and Rare Earths from them? Do you see that happening regularly?
Â
Today's guacamole comes from a fellow who grows 20 acres in Escondido along with about 100 plants of tobacco (Cuban seed!). He tells me his trees each need 30 gallons of water a day, but produce up to 300 pounds of fruit.Â
In my mind, this makes bringing avocados to market about as risky as bringing a phone to market. Critical timing, exacting planning, delicate handling, fickle consumers, and conditions that may be out of your control — like the price of water and predicting supply from competitors. Don't even mention off-shoring….a nightmare for California farmers.
See…guacamole does make sense in tech chats.
@Ken-We are already 70% Onshore today.Taxbreaks ,IP Issues and Customer Focus matter more to us
@Ken, product security is getting really critical. Not only are the supply chain systems getting more open but also products are getting more internet connected. Check out our latest velociyt emag on the topic of security and the supply chain: http://dc.ubm-us.com/i/207639
@Tom-Too funny!
@tech, has it always been 70% – or were you offshore previously?
@all, any thoughts on Ken's question: are you considering nearshoring in the near future?
Ken: I can't speak for anyone but myself, but centering manufacturing in Asia has never really made much sense for anyone but the largest players, and even they have gotten burned by it at times. For SMBs, the cost savings in labor (as Jim pointed out) is relatively small compared to the headaches that can go with it. And, as you pointed out, the growing markets globally suggest near-shoring will be the next critical strategy for agile manufacturing.
@tech4people – Tell me more about the customer benefits of onshoring. And, what have you experienced in terms of lead time reduction?
Has there been any kind of domino effect from GE's decision last year to bring more of its appliance manufacturing back to the US? Was that just a blip? Or are manufacturers saying, “Me too”?
@Tom – Your spot on! Our study also found that smaller companies were nearshoring at a higher rate (34.5%), compared to overall 27%.
Welcome, JimC. Glad you could stop by!
Â
It would seem that some right-thinking city/state governments could tip the financials from near-shoring to on-shoring. Maybe Detroit and Chicago??
The one place that I have seen gathering a lot of interest, especially in the United States, is South Amercia. The time zones line up better and there is a huge knowledge base there. Does anyone know of an concrete expamples?
Wow…this time has really flown! I have to run off soon, but want to thank Hailey for pulling this together and, especially, Ken and Simon for their clear, direct answers and facts. It's really great to have a couple of experts to put this issue into perspective.  Go big brown!
@Tom, glad you could stop by… We're going to have to draw to a close at the top of the hour, latest. so if you have any last minute questions, post them now!
Thanks Ken. SMBs are so much more nimble than big players, but big players are so much more powerful. It's always fun to watch the give and take between them — as long as you're not the CSO of the smaller player.Â
@Scott, i don't know of electornics firms, but my husband's software company has a whole engineering team in costa rica. There also seems to be less of a language barrier.
@JimC In the press. we've seen high profile companies make announcements around nearshoring. One of the objectives of our Change in the Chain study was to quantify the number of high tech companies that are planning to nearshore. Seeing the figure grow from 10% in 2010 to 27% in 2013 gives us a broader barometer of what's happening in the high tech industry.
Don't forget Europe has some paces with job problems. In fact, if anyone needs a consultant for an onshoring operation in the South-of-France, they can call me!:)
@Sellis-At one Stage it was 30% onshore and 70% Offshore,But the Sharp increases in Labor Costs Overseas(as well as Utility Costs) pushed us to bring our Manufacturing more Onshore.
Now we are reverse.
@Jim, lots of talent in europe, for sure.
@Jim: I'm with you Jim.
@tech, survey suggests that your experience is not unique. Well done!
@Scott In our study, Latin America lead all regions as it relates to nearshoring (44%).
Scott, Greece is nice too!
@Hailey: There are also seems to be some shared experience there with Latin and South Amercia. You have Brazil as the main example, and a lot more here and there. You have a huge educated class with a desire to play on the world stage.
Ken. That's a pretty significant jump in the level of interest. How does that change the way your own company makes its own plans, in hope of keeping pace with the potential change? Do you invest differently?
@ken: So in Latin America, what is part is going there? Development? Manufacturing? Resources?
HI Gang…sorry I'm late to the party. How much of a role are mobile devices playing in changing the supply chain?
Hi Snunyc, always glad to see you whenever you arrive!
Â
@JimC UPS has the global and regional expertise to help high-tech companies move aggressively into new and emerging markets. In an effort to assist our customers, we're always evaluating services and areas in the next hot market.
Â
@Ken-But don't you feel the Massive Economic Disaster in Venezuela,Argentina and Bolivia has messed up the Entire Onshoring Equation there?
That fellow Maduro in particular ,Is A Massive-Massive Joke!
@Hailey: Thanks! 🙂
@sunyc Mobile devices are certainly an enabler to the customer service equation. Our survey found that high tech companies are looking to differntiate themselves through customer service. 69% believe that better customer service performance drives improved sales.
@Ken and Simon, i know there was a lot of the survey we didn't get to cover. Are there any results you wanted to point before we draw to a close?
@Ken-Absolutely! Know your Customer or You won't have Business to Speak of!
@Hailey, we haven't talked much about emerging markets
Two-thirds of high-tech companies surveyed are in emerging markets or establishing a
presence, and nearly 30% indicated that a key lesson in entering new markets is
understanding how best to establish initial operations. Fascinating stuff!
@snunyc: What's amazing is that we're still just scratching the surface of what mobile devices can do, whether tablets or smartphones.
@Hailey, even experienced companies need help.
@all, quick commercial break: Look to the mid right and take a second to click on our most recent flash poll. It's right on topic for today: Does executive management in your organization understand the need for alignment between business and supply chain strategy?
@Hailey 41% of the respondents expect high tech exports to grow faster over the next 2 years compared to 2013. We like the bullish outlook for exports….clearly the economy is slowly recovering and high tech companies have their eyes on the emerging markets prize.
@Sellis, yes, and when it comes to these emerging markets, everyone has a learning curve.
When it comes to emerging markets, do we see companies wanting to more their whole operation, including HQ, to some of these countries? Is that a bridge too far?
Looks like we've gone past time. I want to sincerly thank our guests for being here iwht us! We welcome any last words of course…
@Ken: I can see where they'd play a huge role in customer service in terms of mobile intrfaces for customers to use. What about internally in the enterprise, terms of field force managment: managing drivers/routes, maximizing delivery, or in the warehouse/distribution centers?
@EBNers, thanks so much for coming by and asking great questions… there's a lot to talk about–we'lll be diving deeper into thse topics in the near future. UPS folks blog for us regularly too so keep an eye out for thier contributions!
@Scott High-tech companies are looking for best ways to enter these emerging markets, and our survey indicated 42% are looking for turn-key solution. UPS has the network & regulatory expertise to help our customers make their entry easier in these markets.
Thanks for the energetic conversations everybody!
Thanks all, looking forward to the next session.
Really enjoyed the live chat – look forward to returning in the near future.
Thanks everyone, This is really an interesting story, and the implications for the economy are tremendous!
You can learn more about UPS news by visiting http://www.pressroom.ups.com
@Ken: So maybe this was asked and answered, but what does UPS help out with? All aspects or IT, or just the logistics part or a combination depending on customer needs? What do people look for from you?
Thanks everyone. Lots of good insights here.
@Scott UPS customizes the solution based on the customer's need. We have a full suite of solutions, including the world's largest footprint of field stocking locations – providing our customers with same day and next day capabilieis. We're the world's largest customs broker and have technology/IT visibility solutions to assist our customers. Our international portfolio reaches 220 countries.
@Ken: Thanks again.
Thanks, all! See you next time.