With the economy continuing to show signs of improvement, manufacturers are turning their attention to strategies for capitalizing on new business opportunities.
In the high-tech sector, improving collaboration across the value network will be a key strategy for boosting sales—and improving profits—going forward.
Morris Chang, chairman and CEO of Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) said as much during his keynote at the company’s recent technology conference in San Jose. A summary of Chang’s talk was published on EE Times.com.
“Business is very good now,” Chang said. “The near-term outlook is healthy. The mid-term outlook is moderate.” In numerical terms, Chang expects the overall market for integrated circuits to reach $276 billion in 2010. That would represent a 22 percent increase over 2009.
Chang expects growth to slow to 7 percent 2011, before hitting even more modest levels—just over 4 percent—through 2014.
These lower numbers—or more precisely the reasons behind them—are why Chang is urging high-tech companies to do a better job at chain collaboration.
Chang believes Moore’s Law—the theory ascribed to Intel Co-founder Gordon Moore that the number of transistors that can be placed on a chip doubles every two years—is starting to slow. And that, among other things, is causing research and development costs to escalate.
The end result: it’s becoming increasingly difficult to develop new breakout products. That puts even more pressure on companies to get products to market faster and to ensure that products don’t have design flaws or production-related defects that could hurt sales. This fuels the need for better collaboration.
“We need to collaborate even before the design starts,” Chang said in his speech. “I believe we can be far more collaborative.”
Industry analysts at Manufacturing Insights, an IDC Company, believe new methods of collaboration are essential to success of all manufacturers—including those in the high-tech sector—in this changing marketplace. They also believe unified communications technology provides the ideal platform to enable effective collaboration across the value network.
Manufacturing Insights details its thoughts on this subject in a report titled, Unified Communications in Manufacturing: Accelerating Decisions While Lowering Costs.
The report’s co-authors, Bob Parker and Benjamin Friedman, say manufacturers now operate in a “do more with less faster” environment that puts a strain on engineering organizations and highlights the need to include external personnel in the process.
“No longer are we operating supply chains over even supply networks,” the analysts write. “They are value networks . . . that must include upstream suppliers and downstream distribution partners and ensure that products are delivered to the right place, at the right time, and for the right price.”
For that to happen consistently, the analysts say, “Collaboration must be done securely. It also must include the ability to federate directories with those at key suppliers, allowing communication to span the respective organizational structures and provide assurance for appropriate identity, authentication, and authorization of users.”
The report highlights a case study from BenQ. BenQ has termed the extension of its corporate communication platform as “federations.” These federations allow BenQ suppliers and partners to be included in the company’s communication environment, allowing for expedient communication with entities beyond the IT reach of BenQ.
In short, the analysts are saying value networks make it easier for companies to share their internal expertise across departments within the enterprise while also tapping into the external expertise of suppliers, partners, and engineering service firms. They also are saying unified communications technology delivers the tools to enable this new level of collaboration in a cost-effective, secure, and auditable way.