Call for a Quote (510) 580-8500

Or Email Us at Sales@Sonicmfg.com

The largest EMS in the Silicon Valley

Call for a Quote (510) 580-8500

Or Email Us at Sales@Sonicmfg.com

The largest EMS in
the Silicon Valley

Digital Supply Chain

By Mark Lawton, Supply Chain World Magazine

Every week, more than 1 million electronic components arrive at Sonic Manufacturing Technologies. Of those, over 500,000 are delivered to Sonic without human touch and within three days of ordering.

Sonic is a contract electronics manufacturer located in the Silicon Valley. The company partners with more than 100 original equipment manufacturers (OEMs), about 80 percent of which are located in the San Francisco Bay Area. Sonic’s 85,000-square-foot solar-powered facility manufactures electronic products for multiple markets including medical, military, automotive, industrial, IOT and consumer.

 “It comes in waves,” Vice President of Supply Chain David Ginsberg says. “As drones were catching on, we had a lot of drones running through the factory. We had to build a drone flight testing room. Lots of volunteers for functional tests.”

The competition in electronics manufacturing services (EMS) is both global and local with “perhaps 100 EMS within the Bay Area itself,” Ginsberg says. “There are probably six to eight we see regularly on competitive bids. Customers will also explore prices in Asia and Europe, so we must compete globally.”

Low Cost, High Payback

To manage cost and complexity, Sonic keeps about 3,000 of the most commonly used resistors and capacitors in inventory at all times. Customers participating in the program have immediate availably to exact quantities needed without liability on excess. “Without even seeing a new design, half of the customer’s parts are already in the building,” Ginsberg says. “And even during the recent capacitor shortage, not one customer on the program experienced shortages or delays.”

A majority of Sonic’s customers regularly launch rapid prototypes and new product introductions, with many products continuing at Sonic through volume production on its nine automated surface mount lines. “Our executive team is engineers that love hardware and all the new tech in this industry,” Ginsberg says. “We frequently work with labs and founders, including those coming into the hardware space for their first time.”

Sonic’s business model is different than the competition. “We decided early on that every process, prototype or production, would be optimized for speed.” Ginsberg says. “We could then accept our customers’ timelines and avoid quoting longer deliveries. Our customers see more responsiveness than perhaps anywhere else they could go.”

Supply Chain Automation

“In order to move quickly and cost-effectively, a digital supply chain is the best solution,” Ginsberg says. “Moving ones and zeros around the globe is faster and cheaper than moving parts. Being in the hardware industry, we use digital to move and query the supply chain without human touch and then convert it to hardware at the last possible moment. The digital supply chain can be thought of as data plus dollars equals parts; and commitment to pay is simply another piece of data.”

Here’s how a digital supply chain works:

  1. The engineering data of the customer is uploaded to Sonic’s business system (ERP).
  2. An MRP (material requirement planning) engine does the calculations, and a data quality engine auto- corrects bad and missing records. “It is simply impossible to keyboard your way to accuracy,” Ginsberg says. “Modern databases are huge.”
  3. With the data quality established, Sonic’s application programming interface (API) takes the customer’s material requirements and compares it to supplier availability– computer to computer – and auto-picks the best match on source, price, quantity and delivery. “API is a bit like electronic data interchange [EDI], but more accurate, lower in cost and better able to choreograph the process,” Ginsberg says. “It’s a conversation between computers.” Sonic’s API system then automatically places the purchase orders. “Within three minutes I can have 50 percent of my parts on order and on the dock in one to three days,” Ginsberg says.
  4. What doesn’t get API ordered is auto-sent to a program called CalcuQuote. CalcuQuote sends out the part requirements to suppliers for quotation by actual salespeople. Supplier responses are returned by CalcuQuote to the Sonic API procurement system which then attempts to buy from the new data. This brings Sonic’s automation up to about 65 percent.
  5. The final 35 percent gets turned over to the Sonic purchasing team. “While automation works beautifully for most parts, the last few percent takes an increasing amount of experienced sourcing, hand holding and collaboration with suppliers,” Ginsberg says.

Digital Future

While speed is obviously important on prototyping and new product introduction, it is also highly advantageous in volume production. “Our median delivery for turnkey electronics – buy, build, test, ship – is under 30 days after receipt of order, while the competition is typically at two to four months,”

Ginsberg says. “Shorter lead time means our customers can continuously adapt to actual market demand while holding less inventory. The best improvement to forecast accuracy you can make is lead time reduction; customers know demand for next month far better than the following quarter.” Ginsberg says a digital supply chain is easier to implement than most people think. Sonic’s digital supply chain does not require artificial intelligence, big data, robots or data scientists. As a mid-tier business Sonic contracts with Orbweaver for data transport and CalcuQuote to integrate human quotes with the API process.

“It’s very low cost and very high payback,” Ginsberg says. “We are always developing new API capabilities, and as our entire industry goes digital, our mutual call for new APIs will bring them to market faster. Digital is an industry- wide solution and collaboration is to our own advantage.”

Sonic certainly is better off for going digital. The company has been able achieve these results without the typical overhead costs of production scheduling, material planning and cost accounting. Shortage meetings are also a thing of the past. “All factory data and supply status are available from the desktop as immediately known,” Ginsberg says. “Why meet? Managers drop by throughout the day if they need an exception escalated.”

He adds, “Nothing is faster, more cost-competitive and higher in customer satisfaction than digital, so this is where the market is going. The quality and automation of transactional data are the keys to success.”

Originally posted at http://www.scw-mag.com/sections/manufacturing-distribution/1194-sonic-manufacturing-technologies-2

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sonic mfg

Digital Transformation in Action

We’re entering an age where data and information will dictate how we run our businesses. For the companies that embrace this reality, the speed of data acquisition—and the ability to utilize this information to work smarter, better, and faster— will serve as a differentiator between one organization and its competitors.

Read the full Digi-Key white paper Breaking Down the Walls Between Procurement, Engineering, and Design: 5 challenges and how you can solve these problems using a digital platform.

Chapter 8 – Digital Transformation in Action

(excerpt from page 11)

Headquartered in Fremont, Ca., Sonic Manufacturing Technologies provides in-house board layout, prototyping, and New Product Introduction (NPI) through full production in as little as five to 10 days. That speed to market necessitates a digital procurement strategy that not only enables a streamlined supply chain, but also supports good internal communication and collaboration.

Every week, Sonic orders about 1 million parts to support its production line. “If we order them Monday, we have one- half-a-million parts on our dock by Wednesday,” says David Ginsberg, VP of supply chain. “Those are just not speeds that people can move at; this has to be done with automation.”

Rolling Out the Digital Supply Chain
Using Digi-Key’s APIs and cloud-based procurement platform, Sonic has been able to automate 50% of its purchasing activity without having to add staff. The staff that it does have can now focus on more important activities—mainly, selecting the best sources for the 60,000 line items that the company buys annually; coordinating with engineering and design departments; and maintaining high customer service levels.

In total, Sonic’s cost to place an order (i.e., total landed cost) was reduced from a previous $40 to a current $9. Not every company is going to achieve 60% savings, of course, but
the one that saves 20% to 30% (a more common target) on procurement costs of $400,000 a year can rack up significant savings right out of the gate (and over time).

Ginsberg sees real value in the company’s digital supply chain, noting that it’s much more efficient than its predecessor. “It’s a lot cheaper to move data around than to move physical assets around,” he says, “and much quicker to move information via automation, vs. making phone calls and sending emails.”

When Procurement and Engineering Align
In terms of intracompany collaboration, Ginsberg says the platform is helping Sonic break down some of the issues that have plagued purchasing departments for decades. “Operationally, if you’re on the team that’s getting product to customers and meeting their expectations,” Ginsberg explains, “and all while engineering is designing a difficult BOM filled with sole-source parts, there’s obviously going to be a problem in our here’s-your-product-the-next-day world.”

To solve these issues, Ginsberg says engineers and designers have to take supply chain issues (e.g., price, availability, lead time) into account before locking into a design and expecting it to be built within two weeks. “Generationally, anyone who has grown up in the past 20 years just knows next-day delivery,” Ginsberg points out. “They don’t even know what the word ‘lead time’ means.”

To help break through some of these traditional barriers and get procurement and engineering working from the same playbook, Ginsberg expects more companies to adopt digital supply chain mindsets. “It’s definitely catching on because the cost drivers are dictating that adoption,” says Ginsberg. “It’s simply impossible to compete effectively using a manual, human-centric supply chain anymore.”

But that doesn’t mean humans will be replaced by automation; quite the contrary, in fact. For Sonic, Ginsberg says the goal is to get to a point where 65% to 75% of processes are fully automated, with staff members solving problems, managing exceptions, and handling other intuitive tasks.

“The more you collapse your delivery lead times, the more exceptions you have,” he explains. Reducing a 12- week timeframe to 10 weeks, for example, translates into two weeks of sourcing, problem-solving, and exception management. Collapse that to four weeks, Ginsberg notes, and those human-centric tasks now span eight weeks.

“In the digital world, human expertise will be used to work together on sourcing, problem solving, exception management, and everything else that buyers really need to be focused on,” says Ginsberg, “not the repetitive ordering that a computer can do once we’ve already agreed on pricing and sourcing.”

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3 Internet of Things Examples

3 Internet of Things Examples That Show Just How Connected We Really Are

Remember when the internet was only on computers?

Whether you’re aware or not, you probably come in contact with several connected devices during your daily routine. In fact, there will be an estimated 26.6 billion Internet of Things (IoT) devices by the end of 2019.

Three Unique Internet of Things Examples That Are Becoming More Common

From your watch and fitness tracker to refrigerators and mirrors, it seems everything is connected now. Up to 70% of consumers already own a voice-activated system, such as Google Home or Amazon Alexa. But what about the next great IoT innovations?

Here are three Internet of Things examples that show just how far the technology has advanced.

1. Internet of Things and Medical Devices

Healthcare and medical manufacturers are experimenting with IoT technology to improve patient care and monitoring.

Personal fitness trackers that will monitor basic health functions like your pulse when you work out have been around for years. Some manufacturers are now developing devices that will keep a record of specific health functions, like blood pressure, oxygen levels, and even brain waves.

Right now, patients with these devices need to visit a doctor in order to download the data. However, it won’t be long before this information can be accessed remotely so medical professionals can monitor their patients in real-time and potentially receive advanced warnings for a serious health issue.

Devices like this will have a major impact on the quality of patient care and controlling certain healthcare costs.

2. Internet of Things and Cars

All of those driverless cars you hear about on the news rely on connectivity and real-time analytics to function. And it’s not just robot cars that use Internet of Things.

Modern vehicles today can gather important environmental information, like temperature, weather, and even road conditions. Based on this data, systems in these cars can make modifications or adjustments to improve performance and safety for occupants. The amount of data these vehicles are collecting is growing by the day. Cars are expected to produce 350 MB of data per second by 2020.

In the near future, IoT-enabled vehicles will send performance information straight to car dealerships so technicians are better able to diagnosis the problem and prepare for a fix. Some cars are already doing this. Techs might even be able to remotely tweak your vehicle’s systems so you can avoid a visit and long wait at your local dealer’s service center.

3. Internet of Things and Smart Toilets

One of the most unique Internet of Things examples today is found in your bathroom.

Kohler has introduced the Numi Intelligent toilet. This throne of thrones features customizable ambient lighting, a heated toilet seat, foot warmers, and automatic flush. And, of course, it connects to Alexa to play your favorite music while you do your business. Plus, it can be programmable to individual users.

All jokes aside, we’re not far away from a time when your toilet can analyze your waste and make recommendations to your diet to live a healthier lifestyle.

Turn Your Idea into the Next Great Internet of Things Example

These examples all started as just ideas, and there are plenty of other great ones out there in Silicon Valley. It’s up to developers to take their visions and find a way to incorporate them into daily life and other connected devices to provide a benefit to the user.

Do you have a great IoT idea, but need logistics and design for manufacturability assistance? Contact us to learn how we can help you turn your dream into a reality.

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