Category Archives: Electronics

One Hundred and Ten Years Ago …

The second remote control was demonstrated by Leonardo Torres y Quevedo (a Spanish engineer and mathematician) in the port of Bilbao in Spain, when he used his Telekino to guide a boat from the shore. The Telekino was a robot that executed commands transmitted by electromagnetic waves. (The first remote was Tesla’s patented “teleautomation”.) Even though this was the second example, it was the most important as it was built on Quevedo’s principles for wireless remote control operation that are still in use to this day.

What do you think LOLCat?

Don't Touch My Remote!

I Luv My Remote! I Evenz Sleep With It! Thank you Quevedo!

Will Resilinc Resonate With Your Supply Chain?

On Monday, we introduced you to Resilinc, a new player in Supply Management that provides a Decision Support System (DSS) for identifying and evaluating risks in your supply chain if you are in the high-tech, medical device, and automotive space and have vast multi-tier supply chains.

We noted that Resilinc is unique in that it is able to provide an overall risk score, delivered in terms of the relative revenue impact of a disruption, for each location and each product; give you the ability to determine the impact of an external event in a given location with respect to specific supplier locations and sourced products; and identify with locations and products are likely to be impacted by a significant event anywhere in the world as soon as it happens. But we didn’t address another aspect of why Resilinc is unique and why they might shake up the risk management space.

Resilinc was founded, and the technnology was designed, and built, by risk management practitioners in the high-tech / device supply chains, and they have added experts in the medical device and automotive supply chains. One of the difficult, and unique, aspects about risk management is the differences in impact and effect of a supply disruption across industries. In some industries, like automotive, bringing a production line back up is not as simple as getting the missing parts or raw materials; in others, like electronic manufacturing, it’s not as simple as substituting one microchip for another if they have different input/output and voltage specs; and in others still, like medical device, it’s not as simple as switching suppliers when one runs out of production capacity as the industry is heavily regulated and it is often the case that all suppliers must carry certain certifications and insurance policies. Without practitioners who understand the specific requirements, and the differing severities associated with each type of disruption, you never get the right models. And if you don’t have the right models, you have zero chance of producing the right metrics and measurements.

For example, the founder, Bindiya Vakil, has served as the Program Manager for Supply Chain Risk Management at Cisco and the Supply Chain Manager at Solectron. Summit Vakil has worked in product management and leadership roles in Brocade, Cisco, and 3Com.

In addition, they recognize the criticality of solid Supplier Information Management as a foundation, and brought in Jon Bovit, with a long history in SIM at Ariba, Aravo, and CVM, to insure they got their unique functionality-focussed SIM model right for the problem they are tackling, which is different from the problems the standard SIM players are focussed on. (For example, in risk management, it really doesn’t matter where the headquarters are and whether you spend 100K or 100M with the supplier. A hurricane could shut down the headquarters and have no effect on your supply chain but if a supplier is sole source, even if you only buy one part, and only spend 100K, if the absence of that part could shut down the production line, that supplier is still a huge risk if they are located in a high risk zone.)

And their CEO is formally trained in Supply Management. She has a Master of Engineering in Logistics from MIT with a thesis on Design Outsourcing in the High-Tech Industry and its Impact on Supply Chain Strategies. Not many companies these days have a CEO who is technically competent in what the company actually does. It is my belief that having a CEO who knows what the product has to do, and how it should do it, greatly increases the chances that the company will develop the right products. (Because when you don’t, you get devices that light-up when they’re off and drain the battery until they die, and million-dollar toilet paper dispensers that limit you to 5 squares. Don’t laugh. Both have happened.)

So while Resilinc, like all new technology platforms, may carry a technology risk, for those of you in the high-tech, medical device, and automotive industries, I believe that it is more likely that it will resonate with your supply chain.

Do You Know What’s At Risk? Resilinc Does!

Resilinc, a new player in Supply Management, has a unique approach to identifying and evaluating risk in your supply chain. Eschewing the transaction-and-finance focussed approach of other players in the risk management space, and building on the lessons learned from SIM (Supplier Information Management) vendors, Resilinc has built a unique approach to identifying and quantifying the relative risks in your supply chain.

Started by a Risk Management practitioner in the high-tech and electronics supply chain, who has a Masters in Engineering in Logistics (from the Massachusetts Institute of Technology), Resilinc not only builds on the lessons learned from SIM, but on the lessons learned from real risk management practitioners and specifically focusses on the electronics and high-tech, medical device, and automotive supply chain – realizing that, when it comes to risk, not all supply chains are created equal.

So what is Resilinc? It’s an affordable DSS (Decision Support System) for larger mid-size and large multi-nationals that need to

  1. identify the most significant risks in their supply chain,
  2. keep tabs on what facilities may be impacted by a significant external event, and
  3. be immediately informed when an event could cause a disruption that requires immediate action.

The solution, delivered using the SaaS (Software-as-a-Service) model, does this by tracking all of the relevant information on each supplier and facility in your organization’s multi-tier supply chain. Whereas a typical SIM solution (that powers a typical financial risk analysis product) will track each supplier, their official information, their insurance certifications, their corporate addresses, etc., Resilinc’s solution tracks each individual manufacturing facility, the products produced at those facilities, the inputs required, the lead times required, and the time taken to get the plant up and running again as a result of a serious disruption (such as a natural disaster, border blockade, strike, etc.). Based on this information, integrated financial and location risk metrics imported from other systems (for which you have a license for), and the relative revenue impact of each product on your total organization revenue, Resilinc is then able to

  1. provide an overall risk score, delivered in terms of the revenue impact of a disruption, for each location and product,
  2. give you the ability to determine the impact of an external event in a given location with respect to supplier locations and sourced products, and
  3. determine which locations and products are likely to be impacted by a significant event anywhere in the world, as soon as it happens (and e-mail you a notice that the event — which may be an earthquake, war, or labour strike — is potentially impacting one or more locations in your supply chain).

Risk Managers can use this to determine which locations and products have the biggest risks, which facilities will be impacted the most as a result of a supply disruption in an area, and which product (line)s are at risk as the result of an event that just happened. And then they can take action.

Resilinc is a powerful tool for the high-tech, medical device, and automotive supply chain, which, until now, were probably too reliant on financial metrics, which are not the only risks one needs to be concerned about in a multi-tier supply chain.

Has the Best been Bought from Best Buy?

StorefrontBacktalk recently ran a couple of pieces on Best Buy that followed up their recent pieces on Best Buy’s Black Friday Fiasco and Best Buy’s Wifi Porn, which was expanded upon by SI in its recent posts on how if you wanted a best buy experience, you weren’t going to get it at Best Buy (Part I and Part II). In its first piece on Best Buy’s Last Hope, the author says that Best Buy has one shot — an expensive, painful, highly disruptive shot — to truly turn itself around. It must embrace customer service in-sore to an extent that would make Nordstrom, Trader Joe’s and Whole Foods blush. That means store associates who are true experts in the electronics they are selling.

Frankly, I don’t think this is going to happen. The mentality would have to change from “who will work for us for minimum wage and pretend they know enough about this product to actually sell it” to “where can we find someone who knows what they are talking about, is passionate about the products they sell, and will actually work for us as a sales rep” and “what is it going to take to get that kind of people”. Right now, the type of service I’m used to is “this isn’t my department, you’ll have to find someone that is working in this department” to queries as simple as “can you tell me if you still have any of this product in stock” (which any associate can do simply by logging into one of their terminals and doing a query) or, my favourite, in response to “I’d like that” (pointing to something in a cage). Get the key, open the damn cage, give it to me and/or walk it to the cashier. An untrained monkey could do it! (And monkeys are smarter than you think. Pete the Monkey taught himself to do dishes.)

Plus, as the author notes, they would probably have to fire most of their staff and replace them with Apple-store caliber employees. And any employee of that caliber is probably going to go work for Apple or, if they prefer Windows, Sony where knowledgeable associates are preferred.

After all, as the author notes, they currently think they can win a price war with Amazon. A company with massively deep pockets, minimal physical overhead (compared to a retail store chain), and a willingness to go eight years without turning a profit just to conquer a market. Winning a price war against Amazon in the electronics space is not going to happen. Amazon can, and will, win on margin every time if that’s what it takes to be the next major electronics retailer and put Best Buy and its competitors out of business. (And it won’t be hard when it’s customer service reps often give better service over the phone than Best Buy associates in store!)

The other piece that got my attention was that Best Buy Planned Outages Due to Its Move to the Cloud. If you believe the hype (and the doctor does not), the whole point of moving to the cloud is so that you don’t have outages. But the most ironic aspect to this story is that Best Buy is cutting Amazon a check for its cloud efforts. They might as well just sell to now and become Amazon’s mobile presence. One little glitch and a propagated purge command and — voila! — no more Best Buy online. (Not that it would make a huge difference anyway. What good is a web store that a growing portion of your market can only order one item from at a time anyway? [See Best Buy Experience? Not at Best Buy! Part II.] the doctor is now ordering more electronics from the local office supply depot because their web site actually works! And if you send them an e-mail, customer support actually responds! On the other hand, it seems that Best Buy’s method of dealing with problems is just to ignore them. It’s not a problem if you don’t recognize it, right?)

The nostalgic part of me would like to say that Best Buy still has a Bright Future, but, in the doctor‘s view, the only chance of Best Buy lighting up the sky is if the same thing happens to it as happened to the Buy More in the season three finale of Chuck. The way things are going, it’s going to be closing 50 stores on a regular basis. And I don’t think China’s going to save it. If Best Buy truly takes off in China, there’ll likely be so many indistinguishable clones in three months that it will just be hastening its demise.

China’s New Labour Militancy

Editor’s Note: Today’s post is from Dick Locke, Sourcing Innovation’s resident expert on International Sourcing and Procurement. (His previous guest posts are still archived.)

In my last post I wrote about the loosening of the controls on the value of the yuan. Since then, the yuan has weakened about 1%. That’s one of two developments affecting China sourcing.

The other, which I think will have more immediate effect, is new labor militancy among the employees of export related industries. They are realizing they are in a very strong bargaining position, because they are working for first tier suppliers of consumer products, such as computers, telephones and cars. The Apples, Dells, HPs and Hondas of the world aren’t going to stay customers of companies who take (with or without government involvement) repressive measures against labor militants.

This is unlike the situation in Mexico, where the federales broke a miner’s strike a few weeks ago. Miners are about as far back up the supply chain as you can get, so it’s unlikely the mine’s customers are going to feel consumer pressures. The mine is in Cananea, and is more or less an historic site because there was another famous government-assisted strike breaking there about 100 years ago. In that 1906 incident, the US Army got involved, 60 miles inside Mexico.

In China, the suppliers are generally conceding to labor’s demands. Will that lead to a massive departure from China? Not in itself, particularly in the electronics industry. As a rule of thumb, electronics assembly costs are 80% material, 15% overhead and only 5% labor. A small increase in labor costs at the assembly level is unlikely to be a deal-killer. That’s helpful, because resourcing all that electronic assembly work out of China is going to take years. Foxconn alone has 800,000 employees in China. Resource that!

Thanks, Dick.

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