As electronic manufacturing services (EMS) companies morph into supply chain companies and electronics seeps into every part of our existence, supply chains are colliding. One of the more obvious current collisions is that of the electronics manufacturing industry and the apparel industry in the field of wearables.
Whether it is the latest crowd-funded project or a volume product like a fitness or activity monitor worn on the wrist, all these products have impacted the way we view manufacturing. And it's not just the traditional apparel industry, the higher end of the fashion industry is also getting involved in technology with companies like Swarovski partnering with technology providers like Misfit to develop solutions for an ever more discerning market. While Fossil, who not only manufacture their own brand but also make watches for various designer brands, have brought a series of smart watches and fitness trackers to the market.
Some products are a complex blend of flexible technical fabrics with sensor and monitoring technology, whilst others are more traditional electronic products but designed into the form factors that make them wearable with the demands on robustness and miniaturization that it brings.
From an assembly point of view, it is interesting to consider what is required in the manufacturing process when conductive materials are printed on or embedded into a garment. The industry is used to processing rigid materials, mainly copper clad laminates in the form of printed circuit boards (PCBs). It is not geared up to assembly on flexible stretchable materials like the fabrics used in the apparel industry. Likewise, it hasn't figured out the placement process and the inspection process. Heat will also provide a challenge if we want to solder in the close proximity of fabrics, especially modern man-made material like those used in sports wear.
And what about the supply chain and the desire for a single point of contact, one person or company with ultimate product knowledge and responsibility? Call it what you will, it is essential that supply chains are integrated and the buyer, brand, or OEM feels someone has control.
Buyers, procurement managers, and supply chain managers all appreciate this. They like certainty and they like to know that when a supply chain is challenged or at risk they call one person and get all the answers they need. If I were a large OEM brand with successfully outsourced supply chains in apparel and electronics (and I can think of a few of these), then when I introduce a product that converges apparel and electronics, I would ask both sets of vendors to bid on the entire project. Whether the electronics industry or the apparel industry steps up to that challenge will define how the future looks in this sector and indeed in both sectors.
The supply chains for the apparel and the electronics industries are both mature and well developed, but they are completely separate. They operate in different ways, but with many of the same challenges and imperatives:
- They are both complex, with multiple suppliers, multiple models and multiple configurations.
- They both require worldwide fulfillment.
- They both require rapid ramp ups and fast introduction of new models.
- They both need innovation and protection of designs or intellectual property.
- They are both heavily outsourced and hugely price sensitive.
The biggest, and perhaps the only difference is in manufacturing technology. However, if the electronics industry is more about supply chain than assembly, then surely those differences will be overcome.
I have watched the outsourced electronics industry move from printed circuit board assembly (PCBA) to multi disciplined manufacturing, fulfillment, and logistics. I have often wondered what defines a product as suitable for the EMS industry.
Flextronics recently rebranded as Flex, letting go of the 'tronics' tag in their name. Most recently, the organization announced a partnership with Nike to make advanced footwear. It leads me to the question of whether a product needs to have a plug on it for it to be suitable business for an EMS. Perhaps this is where the very term EMS is disadvantageous.
There are some interesting differences between the two industries that filter down to the supply chain and impact the design and manufacturing process. One is the seasonality of fashion products.
We see all the hype around the new Apple iPhone each year when new products are introduced. Meanwhile, the fashion industry and change styles and stock at an alarming rate to adjust to trends and changes in demand. This has to be reflected in the supply chain and the product design. More platform-based designs are needed to ensure rapid changeover and agility in the product version as well as many more options, sizes, and styles to suit different markets.
If the real skills do reside in the supply chain, providing a solution from the start of the innovation process to the end of a products life, then surely one company can tackle the whole thing—from manufacturing the electronics-based garment to final fulfillment to the end user or retailer.
If this is the future, these solutions providers will need to learn some new skills. I suspect there will be mergers and acquisitions (the quickest route), as well as deep collaborations or even through recruitment and internal development. That's not a big problem. Today's organizations are adept at learning new skills, and change is part of their DNA. They seem to embrace it and the new challenges it brings.
Either way, the industries will need to meet somewhere in the middle and I suspect those with the greatest supply chain skills will be the winners. Eventually, the manufacturing part of every product becomes 'me too' and the ability to delight the customer with the ultimate service is the only distinguishing factor. Good supply chain management, good product engineering or realization, and good sourcing are all essential whatever the end user product and whichever supply chain you operate in.