Everywhere in the electronics industry today, collaborative e-business is simplifying operations, improving quality control and cutting costs. It’s transformation time for the value chain. How are you going to play to win?

Your product is designed in Palo Alto. The chips come from Scotland, the boards from Penang. It’s manufactured and assembled in Shandong, and must be shipped to a customer in Punta Arenas. Somehow, it’s your job to make it all work. Fortunately, there’s help. It’s all about creating collaborative workflow up and down the value chain. It can get even the farthest-flung enterprise humming.

E-BUSINESS: THE TRANSFORMATION GAME

e-business doesn’t just fine-tune your business, it dramatically transforms it. Even in a down cycle.

Particularly when demand is falling or flat, you have to be at your best to gain a competitive advantage. It’s when the tough get even tougher. You have to bring new products to the market faster to drive better returns. At the same time, you have to wring costs from operations. It’s all about protecting and expanding your margins. Enter Electronics Value Chain Management.

What can value chain management do for you? Create efficiencies by getting everyone on the same page at the same time. Share information up and down the value chain - from designers to suppliers to manufacturers to distributors to retailers and their customers. Value chain management can cut procurement costs by creating commonality in parts and suppliers. It controls inventory by getting the supply chain talking to the demand chain. It cuts transaction costs by integrating with public and private exchanges. Overall, it’s a framework for reducing costs for electronics manufacturers by 10 to 30 percent. It’s e-business. And it works.

CASE STUDY: PHILIPS CONSUMER ELECTRONICS

In 2001, the electronics industry was facing a slowing economy and increasinly fierce competition. In the face of this challenge, Philips Consumer Electronics North America needed to maximize customer satisfaction and increase profitability as quickly as possible.

They turned to IBM to develop a transformation road map that included a supply chain overhaul. The challenge involved improving the customer experience while reducing costs in the same breath.

The plan addressed all process and infrastructure elements of the supply chain. From procurement through manufacturing and order fulfillment. IBM analyzed consumer electronics trends and the changing requirements of key customers. The result? An optimized supply chain network.

Best-in-class warehouse and transportation management systems have been integrated into the SAP[R] system Philips was running. Logistics issues were addressed by outsourcing transportation and warehousing. management to a world-class, third-party provider. And the IBM Lean Manufacturing methodology was applied to identify, prioritize and implement improvements to manufacturing reliability.