Supply Chain

Creation Ships First We Share Solar Units

Creation team members first heard about We Share Solar when Diana Ferrari, Director of Central Engineering at Creation Technologies learned about a suitcase building event at St Agnes of Assisi, where her daughter Julia attends school.  Diana couldn’t stop thinking about how to help this program as part of Creation’s Making a Difference initiative and one phone call to We Share Solar Co-Director and Co-Founder Gigi Goldman and they both realized that it was a perfect match.

The VAVE engineers at the Creation Milwaukee Business Unit connected with Hal Aronson, Co-founder and Director of  We Share Solar, and discussed different avenues for creating a lower cost  educational kit, the WSS601.   Our commodity managers and Vice President of Commodity Management, Steve McEuen sourced and quoted the material and was able to create the kit at a price below We Share Solar’s target.

Once we agreed to move forward and quote the project for manufacturing it was turned over to Robert Flores, Business Development Director for Creation Express Services out of San Jose, California.  Robert met with Hal Aronson to discuss their cost expectations and timelines.   Robert also worked very closely with Creation team members Chuck Herman, Customer Focused Team Leader and Juanita Wright, Procurement Specialist to make sure the project went smoothly.     “What really helped to get the project quoted and into production was communication,” said Robert Flores. “I was in constant communication with Hal, and then Chuck, Juanita, and I were meeting on a daily basis to discuss any changes to ensure the project kept moving forward to meet the aggressive deadlines, and we made sure everyone involved was kept up-to-date.“  Chuck and Juanita both agreed communication was the key to success.  Hal had given Creation some very aggressive timelines for delivery which could have been challenging due to some long lead time parts.   Juanita was able to find substitutions for those parts with shorter lead times and while we had already exercised a VAVE to drive out cost, Juanita was able to find even more cost savings and the project actually came in under budget.

Wendy Cross, Program Manager with We Share Solar, which is the specific group focused on these cases, was very impressed with the team in San Jose.   “Once everything was approved we were in a time crunch to ship with the start of the school year.  Chuck and the team in San Jose were able to ship 30 kits a day.    We exceeded the estimated schedule and shipped out well over 200 in the first week,” said Wendy.

We Care Solar facilitates the international deployment piece.  The model is that each school gets 6-8 suitcases, they keep 6 and deploy 2.    Each year participating schools will fundraise to try and buy more.  The teachers are very excited to have humanitarian project based learning as well as an opportunity to learn about wiring and circuitry.    Currently most of the cases are deployed to Kenya and Uganda so students can have lighting giving them more access to resources.   We Share Solar works with partners in Kenya that do the installation work, liaison in terms of choosing schools and in addition can help with maintenance.

And there is more!!!  October 24-25 there will be a Creation We Share Solar training event in Creation’s San Jose Business Unit.  Creation representatives from various business units and Creation Design Services will be on hand to learn how to lead suitcase building workshops. They will eventually host workshops with children in their home cities. Look for future updates on these events!

Learn more at: https://www.wesharesolar.org/

How a VAVE Risk Mitigation Strategy Improves the Bottom Line

A VAVE analysis is considered a game changer to OEMs because of its potential for major cost reductions.

VAVE is not about a quick fix to cut expenses. Good EMS providers can leverage VAVE to improve product quality and lower lifecycle risk. This focus on risk mitigation will translate into long-term savings and greater revenue opportunities for OEMs.

Here are the ways VAVE teams are achieving this.

Entering the Market with Confidence

Being first to market is important, but it is ineffective if you are not priced appropriately. An OEM may have a great product but will fail in the market because of its high unit cost.

If a VAVE analysis is performed during the prototype phase, you will get expert opinions from your EMS partner on pricing strategies. Early supplier and engineering engagement, before the design is finalized, will ensure there is feedback and approval from all stakeholders.

Putting that upfront investment in VAVE will drive the unit cost down and allow you to enter the market at the right price point. You have an opportunity to capture a competitive market share and maximize revenue potential.

Extending your Life Cycle

A thorough EMS partner will put a large emphasis on quality and risk management when conducting a VAVE analysis. They will make sure that the product and all of its components will last the entire product lifecycle. This is usually done during the risk analysis phase, where your partner evaluates your bill of materials (BOM) and identifies areas of improvement to reduce risk within the product lifecycle.

Making sure that the product BOM has longevity will avoid redesign costs in the midst of the products life.

Part of their task is to get as many approved sources in the design as possible (more on that later) so that if one or two sources become obsolete in a few years, you still have a supply chain that won’t cause you shortages.

Experts in the Supply Chain

Mitigating risk is all about being able to foresee barriers and having a contingency plan to address them without missing a beat. OEMs that aren’t prepared will not be able to react quickly if a major quality issue arises.

Almost 93% of critical shortages where delivery is effected is attributed to OEMs single sourcing their components. That means there are other supply chain options available that haven’t been vetted or approved. When your customer wants an extra 10,000 units, a single sourced component on your BOM can cause you to lose revenue if the supply chain can’t react in time.

We often see in startups or smaller companies, a design engineer is simply not looking for multiple component sources under the pressures of a launch schedule. If they are looking, they may not have the supply chain relationships to identify the lowest cost options.

A capable EMS partner can help you design a sustainable supply chain. They can lessen your risk during a VAVE analysis by identifying and qualifying a second or third source for components, so if there are quality issues, you have the flexibility to adapt.

The BOM might start off with 80-90% single sources, but can drop to 20% single sourced after a successful VAVE analysis. This will not only improve the products longevity, but will eliminate unnecessary long-term costs.

 

 

Mixing it Up with RFID: Multiple Tracking Technologies for Beyond Line-of-Sight Supply Chain Visibility

Mixing it Up: Multiple Tracking Technologies for Beyond Line-of-Sight Supply Chain Visibility

The ability to locate, track, and manage your products throughout the supply chain using embedded RFID (radio frequency identification device) chips is undeniably valuable in terms of cost savings, efficiency, and customer satisfaction.

In 2017, advances in real-time and point-to-point location and tracking technologies are dramatically improving supply chain visibility.

From automotive to healthcare, OEMs have an increasing selection of sophisticated technologies and are tailoring them to their assets and applications.

 

Real-Time Tracking

From production floor to ICU, OEMs engaging with sophisticated EMS providers like Creation Technologies are leveraging tracking to monitor changes to a device’s position over time and accelerate improvement.

Here’s an example of how location and tracking technologies can be put to work:

  • At the development stage, bar-coded active RFID components are specified to capture data at the product/module level once in production.
  • In volume production, each assembly is outfitted with a unique, active RFID tag that carries critical, product-identification information in its updateable embedded chip. This is essential for Medical Device OEMs, recording DHR and DMR information required for FDA-approved devices, especially significant with the new FDA UFI requirements in force as of 2016.
  • An active RFID reader receives the signal from the active tag as it leaves the dock, enabling geotargeting and geotracking throughout the supply chain.
  • Each device can then be tracked on rail cars, containers, airplanes or trucks via GPS or ultra-high-frequency RFID. In fact, the vehicle itself is tracked using monitoring, navigation, and routing. Did I mention that Creation has expertise serving Transportation OEMs who offer this service to their customers?
  • Once the device arrives at your end customer’s location, an RFID tag can be assigned that piggybacks off of existing Wi-Fi systems to ensure the product’s availability when and where needed.

 

It’s a Good Time to Buy a Hybrid

Did you know? Bar codes and RFIDs share the same circa-1940 “birthdate”.

Bar codes enjoyed wider adoption because, for decades, tagging a product with a set of thick and thin lines was far less expensive than embedding a chip into a device and reading it.

Fortunately, RFID technology has advanced significantly, and prices are dropping as adoption increases.

RFID tags currently range from $.07 to $100 per tag. The wide range of costs depends on an equally wide range of options around type (active or passive), memory, packaging, volume of order, emission technology (i.e. acoustic, optical) and other factors.

Satellite and cellular technology advancements are also reducing costs, increasing coverage, and expanding product and application opportunities.

 

The Right Product in the Right Place

Moving the right product to the right place accurately, with quality assurance and traceability, is key to eliminating supply chain waste and improving process efficiencies.

And the location and tracking technologies for that critical cradle-to-grave journey have finally arrived.

So here’s my close…

The Creation Design Services team can help you design in RFID, and design out waste.

After commercialization, the global Creation Technologies team can help you provide your customers (and auditors) with the peace of mind that positions your brand as a leader in traceability and reliability for complete manufacturing, fulfillment and after-market services.

And with Creation’s proprietary Vision system and Customer Portal, you get the visibility and traceability you need from the point of launch throughout the product lifecycle.

Contact us anytime to learn more about how we can help you mix it up with RFID.

 

The Conflict Minerals Effect Video Series Part III: Impact on Creation & Our Partners

cm3

The ethical sourcing of materials from conflict-free regions is a responsibility that most of us in the global EMS industry take very seriously, and not just when emerging legislation tells us it must be so.

Prior to joining Creation, I was president of a company manufacturing bare printed circuit boards, and so I understand first-hand the impact of responsible commodity sourcing upstream in the supply chain.

The ultimate responsibility to comply with the Conflict Minerals legislation in the Dodd-Frank Act falls on the US’s Securities and Exchange Commission’s publically traded companies, many of which are Creation Technologies OEM customers. At Creation we do our best to guide our partners through the process and implement systems to help them comply with formal regulations.

In the third and final installment of our first Conflict Minerals Effect video series, I discuss the direct impact – cost, resources, and opportunities – that the Dodd-Frank Conflict Minerals legislation has on our company and customers.

The role that the electronics industry can play in leading change is complex.  In our view, no matter the legislation or challenge, it is most effective for all partners throughout an OEM’s supply chain to have an open dialogue, as much end-to-end visibility as possible, and a plan to work together to do what’s right, as well as what’s necessary.

[youtube https://www.youtube.com/watch?v=Yw-MeOcHgLo&w=853&h=480?rel=0]

The Conflict Minerals Effect: Part 3 – Impact on Creation & Our Partners

And if you missed it:

Click here to watch The Conflict Minerals Effect: Part 1 – The Origin

Click here to watch The Conflict Minerals Effect: Part 2 – Industry Challenges

How Strong is Your Bullpen? Baseball and the Electronics Manufacturing Services Industry

action shot of a high school baseball pitcher winding up to throw the baseball

For those of us who live in the Bay Area, there are three constants in life: we love our weather, we love our sports teams, and most of all, we love to win. Based in San Jose, where I am the Western VP of Business Development for Creation Technologies, I am no different.

That is why the San Francisco Giants loss to the Chicago Cubs in the National League Divisional Series was so disappointing. Not because the team didn’t put forth a great effort, but because the loss was probably preventable.

Anybody who watched the series knows that the weak link for the Giants was their bullpen (aka the relief pitchers), who gave up four runs to the Cubs in the final inning of Game 4, costing them the game and the series.

If they’d had strong closers, there is a good chance that the Giants would be battling the Los Angeles Dodgers in the National League Championship right now, and who wouldn’t want to see that?  (Cubs fans, don’t answer that).

So what do the San Francisco Giants’ playoff loss and pitching woes have to do with Creation Technologies or the electronics manufacturing services (EMS) industry?

 

Partnering to Win

After the Giants’ loss last Tuesday night, I realized that there are plenty of similarities between baseball and the EMS industry.

In baseball, in order to win, you need to be able to close out games and deliver in the clutch – no matter what game situation comes your way. If you don’t have a strong bullpen, you will not win consistently.

Well our industry isn’t that much different. Think of your supply chain as your team, and your EMS partner as your bullpen.

Just as the Giants will be re-evaluating their bullpen this offseason, OEMs should be doing the same thing with their EMS partners.

  • Can your EMS partner perform under tight deadlines?
  • Does your EMS partner have the people with the necessary skills and experience to get the job done?
  • Can your EMS partner adapt to changing market conditions?

The more skilled and proven your closer is, the faster your high-quality products will be ready for the market. This will give you a competitive advantage and position yourself as a reliable and credible manufacturer.

 

Offseason Changes

Companies need to invest in the parts of the team that get them to the final inning as well as in the “closers”. If you can’t close, then all the hard work to get you to that final inning could all be for nothing.

You don’t want to be the Giants, leaving your fans (customers) frustrated with lack of performance and missed opportunities. Fortunately for us, basketball season and hockey season just started. And if the Golden State Warriors and San Jose Sharks don’t pull through, at least we still win with the weather!

Let me know if you want to know more about how Creation keeps our customers hitting it out of the park.

The Conflict Minerals Effect Video Series Part II: Industry Challenges

In the second installment of our video series on conflict minerals, I discuss industry challenges and the effectiveness of the Dodd Frank legislation.

Regulating the origin of raw materials is easier said than done. While it has good intentions, the Dodd Frank Act is flawed and presents significant compliance barriers for electronics manufacturers.

This is a complicated issue that is constantly evolving. I believe that the more honest industry discussion we have around ethical supply chains, the quicker we can eradicate the inhumane practices.

[youtube https://www.youtube.com/watch?v=MDwrd657rPE&w=640&h=360?rel=0]

The Conflict Minerals Effect: Part 2 – Industry Challenges

And if you missed it, click here to watch The Conflict Minerals Effect: Part 1 – The Origin.

Introducing Our New Video Series: The Conflict Minerals Effect

Supply chain awareness is critical for OEMs. Especially when the raw materials used to make their electronic products might have ties to terrorist groups and human rights abuses in Central Africa.

I recently had an opportunity to talk about this complicated social and economic issue, and am excited to announce a new three-part video series on the effect of conflict minerals on the EMS industry.

In the first installment, I talk about the controversy surrounding conflict minerals and the legislation put in place that aims to address it.

https://www.youtube.com/watch?v=7fPMMSqdU2o?rel=0

The Conflict Minerals Effect: Part 1 – The Origin

Understanding the origin of raw materials is not only important from a corporate responsibility standpoint, but for all publically traded companies in the United States, it is actually required by law. Under the Dodd-Frank Act, companies filing with the Securities and Exchange Commission (SEC) are required to determine whether the minerals used came from the DRC or nine adjoining countries.

And the topic of Conflict Minerals continues to make headlines.

A few weeks ago the EU announced the framework for its own legislation, and new levels of cooperation between the US and China are being announced.

We hope our Conflict Minerals Effect video series provides you with a good overview of the increased focus on emerging legislation, its rigorous requirements, and its global business impact.

Enjoy Part 1!

ARE YOU READY

FOR CONFLICT
MINERALS
REPORTING?

What the Recent Conflict Minerals Compliance Ruling Means for Companies

United States Capitol Building, Washington, DC

Conflict minerals compliance is once again a hot topic in the manufacturing industry.

As companies are preparing to file their 2015 reports due May 31st, 2016, it’s important to note that the U.S. Securities and Exchange Commission (SEC) guidance for this reporting year has not changed, despite the recent legal headlines.

Confusion arose when the SEC allowed the April 2016 deadline to challenge the previous ruling of the Court of Appeals to pass.

The issue at hand was a specific phrase of the conflict minerals rule’s disclosure requirements, specifically, that disclosing that a product has “not been found to be DRC Conflict Free” violated the First Amendment.

Ultimately, the court found that requiring a company to make this statement in their SEC filing, which is posted on the company website, was unconstitutional.

Going Forward

Now that the SEC has decided not to challenge the ruling to the US Supreme Court, what does this mean for us?

Nothing should change for the upcoming May 31st 2016 reporting period. We forge ahead continuing to use the April 2014 SEC statement for guidance. Companies are not required to describe their products as “not found to be ‘DRC Conflict Free’”. They may choose to voluntarily describe products as “DRC Conflict free” if they have had the independent audit passed, however the requirement for independent private sector audits (IPSAs) had previously been removed for the 2014 and 2015 reporting year.

As we wait for the court of appeals decision to go back to the district court for further proceedings, we begin a new reporting period using the newly released CMRT version 4.10 released by CFSI.

In other words, it’s business as usual.

Green Manufacturing: Signing off on Paperless

Human hand winner sticks of pile of paper, victory over bureaucracy concept

Advancements in technology has been eradicating the need for paper documentation for businesses across many industries.

Going ‘green’ and ‘lean’ are clichés in their own right, but the changes have become more and more apparent in recent past. We have already seen the publishing industry make the plunge to predominantly digital.

However, in the manufacturing sector, many documents are still processed the traditional way by being printed out. In most organizations, 63 percent of the paper being printed out are due to the need for signatures.

For example, when an EMS provider manufactures goods for say, a medical device company (or other companies in industries with specific protocols and laws), there is a large paper trail related to compliance and engineering specs that requires several signatures. By the time the process is closed, multiple printouts of the document (which could be over 50 pages if it has engineering drawings) have been signed, scanned and circulated to multiple people, possibly in distant locations.

This results in an abundance of paper records, which end up costing companies a significant amount of space, time, money, and in terms of the environment, trees.

The boxes and cabinets necessary to store all the physical documents not only take up space, but they are also inefficient. Locating files manually could take drastically longer than tracking the document electronically.

Manufacturers also have to factor in the time wasted in signing a document, scanning it and having to circulate to another person in a remote location to do the exact same thing. This is not even taking into account if there are revisions to the document.

The financial implications tied to physical documentation are higher than you might think. The average employee who has signing authority signs an average of 250 documents a year, which adds roughly $1,350 in annual paper-related costs. For large companies, this figure can easily exceed $100,000 per year.

Cost and Resource Reduction

Transitioning to paperless manufacturing lowers the cost of doing business for companies. It eliminates paper and ink expenses, it allows employees to focus on other tasks, and it frees up physical storage space that can be used more productively.

One of the ways manufacturers are going paperless is through digital signatures. Using services that allow companies to sign, file and distribute electronically can reduce the $1,350 per signer annual cost to under $100. It can also decrease paper consumption by over 50 percent, which is hugely beneficial for “green” companies looking to not only reduce overhead expenses but lessen their environmental impact.

However, going paperless can be a challenge for manufacturers. With a lot of industries like medical and security typically having strict protocols related to documentation, making sure that digital signing complies with regulatory standards can present some barriers. As a result, there are still companies and organizations that only accept ink-based signatures.

There are also costs to invest in the technology, including hiring somebody to run and implement it. Making the transition can also take time, as you migrate over from your past protocols. For some organizations, this can take up to a few years to fully integrate.

Eventually, all manufacturing facilities will operate 100 percent paperless, it just takes planning and the proper sign-off.

EMS Industry Still Conflicted over Conflict Minerals

PERMITTED USE: This image may be downloaded or is otherwise provided at no charge for one-time use for coverage or promotion of National Geographic magazine dated October 2013 and exclusively in conjunction thereof.  No copying, distribution or archiving permitted.  Sublicensing, sale or resale is prohibited. REQUIRED CREDIT AND CAPTION: All image uses must bear the copyright notice and be properly credited to the relevant photographer, as shown in this metadata, and must be accompanied by a caption, which makes reference to NGM.  Any uses in which the image appears without proper copyright notice, photographer credit and a caption referencing NGM are subject to paid licensing. You MUST follow these requirements if using the images: 1. Include mandatory photo credit with each image © Marcus Bleasdale/National Geographic 2. Show the October cover of National Geographic somewhere in the post (credit: National Geographic) 3. Provide a prominent link to: http://ngm.nationalgeographic.com/2013/10/conflict-minerals/bleasdale-photography 4. Mention that the images are "from the October issue of National Geographic magazine.” Workers rip the earth apart in search of gold at the Sufferance mine in the Ituri region. Much of Congo’s gold, more than $600 million worth a year, is smuggled across borders.
Photo: Marcus Bleasdale/National Geographic

How well do you know your supply chain? Does your supply chain have Conflict Minerals?

These are the questions manufacturers around the globe are being forced to answer as part of the Conflict Minerals legislation.

The aim of the law is to dissuade companies from engaging in trade that supports regional conflicts and human rights abuses.

A worthy cause, but many electronics companies – even global giants like Apple and Intel – are discovering that complying is no easy matter.

Under Section 1502 of the 2010 Dodd-Frank Act, companies filing with the Securities and Exchange Commission (SEC) are required to determine whether their products contain conflict minerals (tin, tantalum, tungsten and gold) that are necessary to the functionality of the product.

If so, they must determine whether the minerals originated from the legislation’s Covered Countries, like the Democratic Republic of the Congo, known to have associations with terrorist groups.

And unless the materials are from a recycled or scrap source, companies must also conduct due diligence on the origin and chain of custody.

The Cost of Compliance

The time, resources and capital necessary to identify the origin of these raw minerals has been challenging for companies, if not impossible.

According to a recent WSJ article:

 “90% of the 1,262 companies that filed conflict-mineral reports with U.S. securities regulators last year said they couldn’t determine whether their products are conflict-free.”

As commodities, a good portion of these minerals are bought on the open market, making the paper trail for some raw materials almost untraceable.

So what’s a company to do?

At Creation, we’ve seen many of our OEM customers face this challenge head on by outsourcing this process to leaders in the compliance reporting field.  These providers, like Creation partner GreenSoft Technology, help by gathering intelligence and maintaining product and component data.

We’ve even seen some OEMs adopt a very proactive Design for Environment / Design for Supply Chain strategy in order to describe their products as “DRC conflict-free.”

CM3
Photo: Marcus Bleasdale/National Geographic

Evolving Requirements

Despite all of the challenges and the approach a company takes, most organizations are on side with the legislation.  After all, it’s intended to eradicate the exploitation of people, terrorist-funded operations, and human rights abuses.

The business challenge remains how to navigate the reporting requirements as the legislation continues to evolve.

A few weeks ago, the U.S. Court of Appeals reaffirmed its previous ruling that requiring companies to declare a Conflict Minerals compliance status is “compelled free speech” and violates the First Amendment. But that doesn’t let companies off the hook as the rest of the legislation remains in effect.

As GreenSoft said in a recent blog post:

Although Affected companies will still be required to report or disclose their conflict mineral data, the provision requiring companies to state whether their products are “DRC conflict free,” “not been found to be DRC conflict free” or “DRC conflict undeterminable” has been struck down.

Making Smart Supply Chain Decisions

While the debate continues, and the legislation and the guidelines evolve, the fact is that companies are still struggling to comply. The IPC association has recently published a white paper that is designed to help guide companies through the process.

OEMs, (especially those filing with the SEC directly), rely heavily on their partners to help them navigate the changes, collect the necessary information, and stay informed.

At Creation, we will continue to help our customers make smart Design for Environment decisions, as we work with our supply chain partners to make the data collection and reporting process easier.

We believe the key is partnering with the right suppliers.  Suppliers that are responsive, ethical, credible, and educated about how they impact product compliance in the end-to-end supply chain.

 

How do you feel about the recent U.S court of Appeals Decision? Will it affect your current strategy to comply with Conflict Minerals legislation?

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