Even while conditions in the electronics industry are finally taking a turn for the better, OEM's are still resistant to change when it comes to their supply chains and vendor priorities. The number one priority still seems to be component price, with OEM's running the risk of losing sight of other priorities such as design strength, time to market, and most notably, customer service. With price to the OEM as the main criterion, vendors are having trouble managing inventory and expanding their manufacturing capacity while maintaining profitability. Innovation and quality control are being disregarded in an effort to deliver components at an ever-decreasing price, possibly leading to a vicious cycle of cost cutting that eventually could damage the entire industry.

Companies that manufacture components are certainly attempting to deal with the strain they are feeling due to OEMs' pricing policies, but often their capital expenditures and production capabilities are sacrificed. Some industry insiders claim that its just the nature of the industry – suppliers are being pressured by OEM's and suppliers pressure those OEM's right back, and some will say that that's just how it goes. However, there are some veterans in the industry who remember a better, healthier time when total quality management processes were the rage and price alone was not the single factor that influenced everyone's decision making.

How, then, can both suppliers and OEM's rectify the problems they continue to find themselves faced with? New solutions need to be explored in order to help the electronics and high-tech industries dig themselves out from all of these problems and put the focus back on what they can do to improve their positions. Innovation is the key to improved products and increasing productivity for both suppliers and OEM's. By investing some time and a little money into education related to the latest developments in the industry, a company can make leaps and bounds after a time of economic shakiness, the type of opportunity that is presenting itself now.

Getting back to basics – examining and improving upon the way supply chains work – seems to be an excellent answer to the problems facing the industry. Uncovering and researching innovations in the 'how' of the supply chain rather than merely dealing with the residual effects of the old standby ways of thinking seem to be the most progressive and beneficial ways to approach the oft-occurring dilemmas in the industry. With the plethora of new technologies surfacing every day, there are many brand new ways of creating a system that works, making sticking with what has sometimes worked in the past but no longer suffices simply unnecessary.

Technical conferences can be an outstanding opportunity for growth and education – new advances, ideas, and tools are put out for display, questioning, and study. The cost to attend such a conference is quite low and it can reap benefits far beyond the cost. A company can prepare itself for advancement during slow economic times by staying up to date on industry initiatives and researching new products, designs, and ideas.

The Design Automation Conference (DAC) is touted as one of the best places at which to research, learn, and be introduced to new innovations in system and IC design. These tools are valuable in almost all markets and, relevant to today's economic climate, may provide just the answers OEM's are looking for when it comes to their current procurement system questions.

These new tools that use deep-submicron technologies afford lower cost and better performance than their predecessors while also paying attention to quality and time to market. They are also capable of supporting high complexity digital and mixed signal design. Embedded design is also very popular now and many systems are comprised of a processor or several in a large system design. New applications in the marketplace will surely keep being discovered and made use of due to the efficiency and overall simplicity of the combination of both hardware and software into one unified design.

Affordable wireless systems are also emerging as excellent alternatives for manufacturers seeking new procurement or verification alternatives. Designers are also hard at work on synthesizing complex mixed signal systems from higher level behavioral models in order to avoid the tedious process of converting behavioral model languages such as Verilog and VHDL.

Clearly, there are many exciting tools emerging in design technology, many of which could really launch the high tech and electronics industries into the next wave of success. Perhaps these innovations – most easily researched at trade shows – will pull the industry out of its current slump and bring simplified and common sense solutions by way of a highly sophisticated new set of technologies. Manufacturers who are willing to look outside of price alone may find some valuable answers simply by walking the floor of a trade show, gathering information, and helping to help themselves. At some point, it would seem foolish not to try something new being that the entire industry has been through the same valleys together and is now looking for a hill on which to start anew.

Sources: Innovating Our Way to the Next Upturn
by Bruce Ackland
Electronic News Online, April 1, 2002
http://www.e-insite.net/electronicnews/index.asp?layout=article&articleId=CA204911

OEM's Seem to Find Few Lessons in Downturn
By Balaji Ojo and Claire Serant
EBN, May 20, 2002
http://www.ebnews.com/story/OEG20020520S0022