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In light of changing economic and global factors, many of our clients are asking, “Are we manufacturing electronic products in the right regions?” “How can our product-distribution paths and modes of transport be more efficient?” “Are we outsourcing manufacturing in optimal ways?”

As we answer these questions, we look not only at trends and best practices inside the electronics industry, but also at how macroeconomic and environmental trends are changing other industries (apparel, automotive, finance, etc.). For today’s blog entry, let’s look at a process familiar to all of us: food preparation. See the cycle of local to global to local “manufacturing” and other parallels with the electronics industry.

The digital-electronics industry began in the 1940s-50s, and most major companies at that time manufactured components and then assembled them into complete products. In home kitchens during that era, most people started with raw ingredients they grew and/or bought, then combined them into meals. Both the electronics-production and meal-preparation processes could be described as “in-house, vertically-integrated manufacturing.”

In the 1960s, in developed countries, most time-constrained families bought mixes and other easy-to-prepare meals from their local markets, shunting the “vertical integration” model. Similarly, most electronics companies by then purchased components from suppliers, instead of fabricating them in-house before the assembly operation; IBM, Motorola, and Texas Instruments were among the few remaining vertically-integrated electronics companies.

When the electronics contract manufacturing industry began in the USA in the 1970s (with military/aerospace and computer companies outsourcing circuit-board assemblies to SCI), so too did fast-food restaurants gain popularity: families “outsourced” meal production to growing national chains.

And in the late 1980s and 1990s, when US companies started sourcing electronic assemblies from Southeast Asia, Mexico, Scotland, and other then-low-cost regions, US supermarkets and restaurants sold food shipped in from Latin America for access to year-round “seasonals” and lower prices (often owing to less-regulated labor and pesticide practices). Also fostering global production and long-distance transportation of both electronics and food was the explosion of stock-keeping units (SKUs), yielding more variation in manufactured products than imaginable decades earlier.

Now as we enter the last year of the first decade of the 21st century, electronics companies look to improve their financial health by designing more efficient products, moving production closer to customers, and using less air transport (also reducing carbon footprints). And families that are health-conscious (and who want to reduce their carbon footprints) are choosing locally-grown, lower-on-the-food-chain, organic foods.

The trend toward lighter-impact products and regionalization—now practiced primarily by proactive companies and individuals — will bloom in the next decade, changing the way we design, source, manufacture, and transport all kinds of products.

Here are some sources about the early digital electronics industry, the electronics industry’s environmental leadership today, Latin American food imports, and the fast food industry’s growth and impact.

What industries do you see evolving along with the electronics industry, and what can we learn from these parallel trends?

Posted by Pamela J. Gordon, January 2nd, 2009