In recent years, the electronics manufacturing sector has experienced major shifts that have changed the ways companies define their value-add and how they interact with their partners.
Manufacturing activities centre on supply chains which are primarily driven by brand owners of end electronic products, usually large MNCs. Supporting these companies in the supply chains are local manufacturing companies providing raw materials, components and services such as product assembly, distribution and logisticsProduct companies are outsourcing more activities on a global basis so that they can focus on core competencies such as design, branding and high-end manufacturing. They no longer make any of their products in company factories preferring to outsource the manufacturing to a number of well-placed and highly competitive contract manufacturers.
In Singapore, Hewlett-Packard outsources the building of whole printers to contract manufacturers such as Venture Corporation. Dell and Cisco also adopted similar strategies. For outsourcing to work well, brand-owning companies need to strengthen and establish linkages in complex supply chains.
Increasingly, the competition will be among supply chains rather than among individual factories or among individual companies. These supply chain must be integrated and responsiveness to changing market demands. Manufacturing companies will have to upgrade their supply chain management capabilities in order to compete effectively in the global market
SMEs, especially those in the lower levels of the supply chain hierarchy, are usually unable to fully participate in B2Bi collaborations as these typically require high levels of Information Technology know-how and hefty costs. For example, SMEs usually cannot afford costly B2Bi systems. This results in lost business opportunities for SMEs.
What the SMEs need to do?
To connect to all the different systems can be a daunting task. Companies need to define the data structures, how to deliver the information and when to response to each messages received. Many messages are we expecting?
Integrating end-to-end processes and applications involve many aspect of cooperation between the parties involved. Standards are critical to the process of exchanging information. However, having too many standards can be just as chaotic as having no standards.
XML offers the ability to separate the data from the processes that act on that data. XML provides a syntax that allows you to define each information object in an unambiguous way. By doing so, you can capture the information as one object and process it with many different applications depending upon the requirement at the time.
Web services will become a very useful tool for integrating supply chains. The web services approach offers a flexible and lower cost option for automating business processes and integrating supply chains. In situations where the process is complicated and non-standard, as in multi-party sharing of product design or engineering information, web services can facilitate collaboration.
Andy Tan
