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US Electronics Manufacturing Rise - Highlights localization advantages

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Made in the USA is not typically the moniker of most electronics in the high volume consumer electronics (CE) space. Yet, as Manufacturing Market Insider (MMI) reported in their most recent issue, "[…] three OEMs have decided to build high-volume type produces in the US. Apple, Lenovo and Google-owned Motorola Mobility […]."

 

 

The US push – resuming localization trend?

This year has certainly seen an increase in US semi and electronics manufacturing news, the original story really goes back about a year related to Google's Nexus Q streaming media player which, when released, touted the Made in the USA label, as reported last year by EETimes. Shortly thereafter, early rumblings about Apple following suit were released by AppleInsider. More recent momentum favoring US locations for manufacturing and not just for R&D and regional headquarters, came as Samsung announced a new Silicon Valley campus location.

While rising Chinese wages, logistics costs, and increasingly lean inventories and very short lead-times for products justify a push for localization based on cost. Current U.S. localization strategies benefit from the growing importance of co-locating design engineers and manufacturers to improve innovative R&D while increasing market agility, as Flextronics CEO Mike McNamara offered in the MMI article.

Supply chain strategies

The present localization push is also indicative of the other shifts occurring in the industry, namely the closer integration and tightening of supply chains. Having partners in closer physical proximity when agility is critical to market strategy success, increases the "control over both product development and supply chain operations," as Lenovo's strategy indicates, according to the MMI article.

On the supply chain front, Smith has certainly seen similar trends relating to turnkey services that are gaining momentum among a growing set of customers; a trend we discussed in greater detail in the recent Smith MarketWatch Quarterly, now publically available. Certainly, the increase in turnkey service demands is related to the broader strategies to more tightly integrate supply chain functions and partners to both reduce costs and improve agility and quick market responses given the challenges OEMs are facing today.


Lisa Ann Cairns, Ph.D.
Written on Thursday, 18 July 2013 17:50 by Lisa Ann Cairns, Ph.D.

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