In the electronics industry, technology leadership is key to customer satisfaction.
Are we spending too much time focused on survival and not enough time focused on viability? Sometimes, it seems that way. We know that survival is often reduced to bloodletting, while viability is all about a company’s value proposition.
In these days of unprecedented economic turmoil that include daily announcements of auctions [read: plant failures], it’s very easy to lose sight of the future. But if there is going to be a future for any of us in electronics manufacturing, we must begin to focus on how to provide value going forward.
In my mind, there are basically three ways that any company can provide value, through technology/capability, service and production capacity. To some degree, these need to be both balanced and focused.
Production capacity seems to be working well for many Asian companies. They have found a balance between technology/capability and sheer size, building massive first-class facilities that Tier 1 companies flock to. Economies of size often translate into economies of scale, enabling purchasing leverage, capacity utilization and market clout. For those who go this route, the facility needs to be built for the technology demands of your target/existing customer base, and the service proposition must revolve around handling the high volume applications with aplomb.
For most in the Western world, being the biggest is not an option as customers, who value size, have already migrated to lower-cost areas of the world.
Companies of all sizes however can successfully utilize service leadership as a value proposition anywhere in the world. The key is to understand customers – what they consider service and what services they are willing to pay a premium for and/or choose a supplier based upon. I have never met a company executive in any industry who does not believe that his or her service is excellent, if not well-above average, and that specific service is THE reason for customer purchases. Equally, I have yet to find any company that really provides an outstanding service that people are willing to pay a premium for.
No question, the better the service, the greater the customer loyalty. In some cases it is the personal touch of a visit or phone call that works wonders, for others, the power of the Internet has the same result. In short, service really needs to be tailored to the target market and the customers within that market.
Service does make a difference, but I do not believe a customer makes decisions based only on service. Technology keeps coming up as being the most important value proposition that those in our industry must embrace if they want to be viable. Our customers – in all markets and geographic regions of the world – are technology companies, and ultimately, we sell to engineers. They design then build products that they tout as offering the best technology possible. I cannot think of any customer who is not selling a technology solution. Equally, the first question any potential customers ask is “Do you have the technical capability to produce . . .?”
So, if we are in a technology industry, whom do we appear to keep falling behind technology wise? Possibly, we are too focused on survival to understand that the path forward must include a healthy dose of R&D activity that ensures we are developing and or refining our capabilities to be aligned with where our customers are going rather than where they are. Working with competitors to enhance technological offerings, not for bragging rights but to satisfy a customer’s need, still seems to many in the industry to be a surefire way to give away their company’s competitive edge. Maybe it is the only way to keep each company’s competitive advantage, when the cost in time and talent is too great for most companies to afford individually.
This is the perfect time for companies to refocus on what might provide the greatest probability of being viable, long-term participants in our technology industry. With more idle time than anyone would like, NOW is the time to be working on development of technology solutions so customers do not migrate to companies that offer a better value proposition. Applying time and talent, individually or in concert with other like-minded competitors, may provide the best ROI in these recessionary times. Attaining technological leadership for any company, any group of companies or any geographic region will assure a far more profitable future and may be the spark that enables staff to rally during these tough times.
We can provide technology leadership and true service leadership by simply talking to our customers, understanding where their technology is headed and developing the solutions needed to help them reach their goals. If we choose to participate in an industry grounded in technology, then to be viable in the long run, we must focus our energies on being part of the technology solution. Size and service help, but only if technology leadership is the driving force. PCD&F
Peter Bigelow is president and CEO of IMI (www.imipcb.com); email@example.com.