At the end or beginning of the year, some brands would evaluate their performance last year and map out plans for the coming year. Even some iconic brands with well-established partnerships are seeking more with new bids and programs: more innovative products, better cooperation ship, lower costs, etc. Even though the trends of electronic manufacturing industry in China used to move at a much slower pace while compared with other industries, it’s shifting in 2019 with many driving factors like advancing of technology, rising of labor costs, and the hefty tariffs Trump imposed on goods imported from China to the United States.
With 15+ years in electronic business in China, our team has come up with our predictions of tops 3 trends of electronic manufacturing in 2019.
- Made in China or move to other lower cost countries?
Considering many advantages, China especially Shenzhen has been the second to none choice for electronics manufacturing for decades. The ecosystem of supply chains, being able to build everything fast with component manufacturers and assembly plants within easy reach is the greatest advantage no other place can offer.
Though some iconic electronic brands have been threatening to move out of China a few years ago, they hardly got the pace on. Even some brands have moved their mature product lines to other lower cost countries like India, Vietnam, Cambodia, Malaysia, etc, they keep the major products or new products which require more engineering expertise with well-established partners in China. Now, being stimulated by Trump’s hefty tariffs, the rising of labor costs in Shenzhen, cost is no longer a major advantage for importing electronics from China.
Things are changing this year, many brands are trying to also move new product developments to lower cost countries as the senior decision makers tend to favor lower costs over risks. What some electronic brands are facing now are new challenges as the productions are run simultaneously in different countries with new factories. The moving of new product development can be a serious disastrous risk if not managed well, it can lead to delays of product launch and compromise in quality.
- Improving metrics
* Automation
To maximize profits, some electronic brands have moved part of their supply chains out of China. For the parts remaining in China, they’ve been evaluating automation to cut off headcount. Automation has been applied to electronic manufacturing for years, robots are used to assemble circuit boards. While automation wins great affection from the operation leaders as it cuts off costs and increases yields, it’s controversial since the engineers hate it as they try to iterate to solve problems.
* Outsourcing part of manufacturing
Apart from automation, some electronic brands also take new measures to cut off costs by outsourcing some of the manufacturing to other factories or buy from the open markets as the prices are usually much more competitive. Though some electronic brands have invested a lot on expensive automation equipments, greater than the costs of operators, the benefit is obvious in the long run. It also shows a trend that many brands are trying all means to cut off costs while maintaining high quality.
* Growing awareness of customer reviews
Another shifting trends is customer reviews are not only data for the marketing team but more valuable assets to product feedback. Reviews on Amazon and other market places have continued to be a popular standard for quality assessment. The value of those Amazon reviews is when study carefully, they contain essential information about potential issues that are missing in the quality inspection process in the factory. Improving product performance tends to decrease custom returns, fewer unhappy customers recommending your competitors and more sustainable business.
- Seeking for better manufacturing support and new technology
With shifting of trends in 2019, many electronic brands have been optimistically looking for better manufacturing support and advanced technology to code with new challenges. Many are looking for new partners with creative ways to solve old problems. Different from other industries, electronic brands tend to have stricter, higher expectations for traceability of data and visibility of metrics. They’re seeking for manufacturing partners who will embrace latest technology and use it to improve their products.
In this fast changing industry with fierce competition, factories are getting squeezed. For factories that can not differentiate themselves offering anything beyond the commoditization service of developing new products, it’s hard to retain business. Differentiation has become a priority for electronic factories in 2019.
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