Girlie,
I gave a "hand waving" talk last July at local SMTA meeting, title
"Challenge of 90s". It was my personal opinion that the current business
environemnt, such as Merge and acquisition, has large impact on the
technical issues. The key points are:
(1) Product life expectancy v.s. components/material life cycles are widen
dramatically (sorry, the drama is not a technical word, but when you see the
obsolecense notification of a plat form of components/materials, it is a
dramatic experience...like "Ahhhh, beam me up").
- product life - non-destructive testing and computer modelling in the
nowadays allow the extention of the equipment beyond their designed
life...Particularly, the high price items, like airplane, train, major
electronic equipment, etc.
- components - change over every 3-5 years, including MFG locations,
(international Fab, moulding compound change (ionic content and alpha
particles, for example). etc.)
- material - change vendor location, regulation, industry change,
consolidation, Merge etc....Fast transition causes loss of expertise, data,
OEM, history.
(2) Large volume supply chain v.s. small volume usage
- JIT practice is carrying out in the material, components, supplying chain.
the market distribution is based on more and more on distributors and
sub-contractors (consolidation, merge, acquisition again).
- shelf life reduction as result of middle men (distribution layer) up to
50% (100% from MFG date, 50% from the distribution date=shipping date). the
practice with "minimum quantity" buying make small volume usage and "repair
and overhaul" supply difficult and costly.
- Large package size (super market style) instead of small individual
package make work life sensitive material difficult to kit to the
manufacture floor. e.g. one adhesive material used to be 1 lb kit and 12 lb
minimum buy... usage 1 lb per month with shelf life 1 year. The new
notification indicate that material is currently supplied as 12 lb kit with
work life of 90 min (moisture sensitive too...It is gaining weight when I
try to measure it by weight.). The supplier is not recommended repackaging
into small size kit on our location due to possible degradation when expose
to moisture...No recommendation for how to handle the material at repeated
usage environment (12 times per year)...One recommendation: "why not use
something else?"...(but no "drop-in fit", you need re-qualification!)
- after market issue... ware house supply after market materials with
limited known history and cost of testing are high if the test procedure is
documented (you are very lucky to get the test procedure).
There are other issues, like interface (someone want to commend on SRAM,
syn. vs. non-syn?), standard, mixed generation of components (fine pitch
device=upgrade beside PGA...).design flexibility... etc.etc...
Some of the cost saving measure done by the supply is transfer to the cost
of manufacturing, re-design and sustaining. It is testing the engineering
force to the extream to find solutions at business "new age" (jump over the
hoops. if you don't believe me, just try to change one of material in a
defined process/reliability product at final assembly level...).
As for my conclusion:
The environment of merge, acquisition, consolidation and others is a:
Marketing, CEO, MBA - "great opportunities"
Manager, Tech directors - "wonderful Challenges"
me - "Honest to God, Roger, we have problems!" (is any "Roger" out there
listening? Is any one feel my pain?).. (it is may be politically
in-correct.. but it is my true feeling...may be it is because I am not a
MBA, not even a "MBA to be";-).
Thanks God! 90 is almost gone...2000 is a new leaf...;-0
jk
At 03:23 PM 9/3/99 -1200, you wrote:
>Hey Guys,
>
>I just want to get your opinions regarding the business trend of merging
>and acquisition (acquiring of one company by the other company). What are
>the pros and cons, benefits?
>
>Any inputs will be highly appreciated, I just need those info on my
>research as part of my MBA program.
>
>Thanks
>
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