y Simon Hopkins
Our conversation reminded me of a client I once had, Fujitsu Microelectronics, who manufactured memory chips. The project was an interesting one that we need to complete within very tight deadlines, with shifting targets. At the successful completion of the project, as a “thank-you,” the project team was given a tour of the factory. This involved dressing up in “bunny suits” and taking an air shower for a tour of the clean room, which was in effect the whole or the upper floor of the enormous factory building. In a scene reminiscent of the bad-guy’s lair from a Bond movie, hundreds of color-coded engineers and assistants shuffled about, tending to machines, watching over robotic arms and chaperoning the precious silicon through it’s journey from near-sand to memory chip. I remember feeling that this truly was leading-edge physics meeting with leading edge production engineering. Upon sharing this thought with my host, he proudly stated that this was nothing compared to their new factory being built next door. Twice the area and half the number of engineers, made possible by increasingly sophisticated automation.
Alas, the story has a sad ending. Not that long afterwards, the global price of the DRAM crashed as supply outstripped demand. The second factory was cancelled, and then the first was closed. In writing this, I am still shocked that the economic forces can be so powerful to displace what was, at the time, a shining example of foreign investment in the UK.
It has taken me 15 years to fully digest what happened, but in speaking to my friend it finally became clear. Even though his business is small, in order to manufacture the devices, he employs a supply chain that incorporates California, the East Coast of the United States, the Philippines and Taiwan. In a capital-intensive industry like semiconductors, economies of scale are critical, and distributing work in this way is simply part of his business. The increased cost of transportation, management, and overheads involved with running a truly distributed manufacturing operation, pale in comparison with the greatly improved process costs offered by choosing the correct sub-contractor, regardless of geography. The benefits of vertical integration, that my client was attempting to create in the 1990s were quickly swept away when more cost efficient foundries sprung up that could service simpler devices.
This, to me, is dramatic proof that we are living today in a truly global economy. Consequently, for organizations to succeed in this environment, their business management software needs to be able to cope with the flexibility of a process that can span multiple countries, contractors, and currencies.
At another past client, I was attempting to teach warehousemen in Finland (some of the largest human beings I ever met), how to confirm receipts of shipments, on screens written in English. If Finnish is not the hardest language in the world to learn, then I don’t know what is, so my ability to communicate with these giants of men was limited. Pointing to a word (provided by a translator) “Määrä” and then pointing to the Quantity field on the screen and trusting them to make the connection was one of the most unusual tasks I have ever undertaken.
How much simpler would it be that people see text in their own language. At iBE.net, our belief in the globalization of business, has led us to make sure that multi-language capability is available as standard from day one. For my friend in the semiconductor industry; his Taiwanese partner can enter receipts and status in Chinese, while he can sit at his desk in the US and monitor progress. And for Finnish warehousemen, when they see “Määrä” they’ll know what to enter
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