Reshoring Electronics Manufacturing and Supply Chain

Electronics Products
Manufacturing Beyond COVID

Reshoring Electronics Manufacturing
Harinderpal (Hans) Hanspal

hans@thing.company
(c) Thing Company llc | hello@thing.company | @llc_thing

The global electronics sector will reach USD 7.3 Trillion by 2025
Customers Distribution Original Equipment

Suppliers
(Buyers/Users) Channels Manufacturers
Source: https://www.euromonitor.com/top-10-countries-to-drive-global-electronics-production-over-2017-2025/report

Electronics are everywhere and impact every aspect of our lives, and
the future is full of bazillions more
Consumer Automotive Medical IT Equipment Internet of

Electronics $625B by 2030 Devices $52B by 2021 Things
$366B in 2020 $602B by 2025 21.5B Devices
by 2025
https://www.statista.com/outlook/251/100/consumer-electronics/worldwide#market-onlineRevenueShare
https://www.statista.com/statistics/1101442/iot-number-of-connected-devices-worldwide

Investments in hardware startups increasingly take a larger share of
total VC dollars
https://about.bnef.com/blog/hardware-startups-see-revival-vc/

Most hardware startups fail, others go down in flames wasting a lot of
money, rarely getting to SCALE manufacturing
Only 24% raised a second round compared to 46% for all tech companies
https://www.cbinsights.com/research/report/hardware-startups-failure-success/

Life of an Original Equipment
Manufacturer (OEM)
Electronics Development and Production Process

Buyer expectations of B2B and B2C products and services are shifting
regardless of industry
Privacy and Security Frequent Product

Updates
Planet Friendly and

Sustainable Personalized Products
CUSTOMER
EXPECTATIONS
"Set and Forget" No Ownership or Single

Operations SKU Purchasing
Rapid Deployment Direct from

Manufacturer

Buyer expectations are driving OEMs to new BUSINESS MODELS that
require many things to come together, bound by TIME and FUNDING
Building & Servicing Finding & Keeping

Products Customers
Products Customers
Original
Equipment
Balancing Revenue, Manufacturer Building & Integrating
Capital (OEM) Ecosystem
Funding & Expenses Ecosystem
Resources
Accessing
Talent &
Technology
Building a PROFITABLE business to respond to buyer expectations
requires significant changes to OEM’s legacy innovation, industrial
and commercialization processes
Product Development & Production Delivering Customer Value And Outcomes

Product Design Purchase-to-Retirement Customer Experience
Engineer Prototypes Direct-to-Customer Digital & Offline Storefronts & Sales
New Product Introduction
Products Customers
Deployment, Productivity, Availability and Uptime Product Experience
Test & Certifications Warranty, Maintenance, Repair, Operations Service Response Time
Scale-Up Production Cyber & Physical Security
Aftermarket Services Original
End-of-Life services
Equipment
Manufacturer Building & Integrated Ecosystems
Capital (OEM) Ecosystem
Component, Fabrication & Assembly Supply Chain
Balancing Funding, Revenue & Expense Models Go-To-Market Channels
Transactional vs Recurring Revenue Models Freight and Logistics Partners
Product vs Services Margins Aftermarket Service Providers
Commercial & Open-Source Technology Providers
Talent Data Integration Partners
Financing Partners
Accessing Talent & Skills

Hiring Employees
Sourcing Contractors
Skills (Materials, Mechanical, Electrical,
Software, Agile, Lean Development, Lean
Production, etc)

Buyer expectations of product PERFORMANCE, operating Expenses, and
LONGEVITY requires OEMs to build SMART products, enabled by electronics,
advanced connectivity, software, algorithms, APIs and new ecosystems
Source: https://hbr.org/2014/11/how-smart-connected-products-are-transforming-competition

Electronics products create a lot of waste, 80% of which is never recycled,
leading to new regulations requiring OEM to track and manage e-Waste
recycling from source to retirement
All laws except California and

Utah use the Producer
Responsibility approach, where
the manufacturers must pay for
Flow of electronic waste worldwide in 2018, by disposal method recycling.

Not all electronics products are created equal
SENSOR WATCH PHONE TURBINE AUTOMOBILE AIRPLANE

< 10 components 10s components 100s components 1000s components 10,000s components 100,000s components
Low Mix/Complexity High Mix/Complexity

High Volume Low Volume
1-10 Year Product Lifespan 10+ Year Product Lifespan
Low Product Unit Cost High Product Unit Cost
Low Customization High Customization

Getting from Idea to FIRST CUSTOMER SHIPMENT of PHYSICAL
PRODUCTS takes upfront WORKING CAPITAL & significant TIME to
market
Pre-Seed Seed Post-Seed

< $500K < $2M $2M-$4M+
Founded: 2002
Time 12-18+ Months 18-24+ Months Launch: 2007
Founded: 2013
Launch: 2016
Design & Prototype & Pilot Small Batch

Idea Scale
Engineer Test Product Run Ramp Up
Founded: 2012
Non-Recurring Engineering & Tooling Expenses Launch: 2014
Expenses
Inventory Expenses (Raw, Work-in-Process, Finished Products, Spare Parts)
Physical products require many components that need to be
DESIGNED, SOURCED, FABRICATED and ASSEMBLED
MECHANICAL COMPONENTS ELECTRICAL CONNECTIVITY SOFTWARE PACKAGING

Metal, Plastic, Fabric, Sensors, Screens, Integrated Circuits, Ports, Antennae, Embedded, Edge, Branding, Materials,
Wood, Glass, Cables, Printed Circuit Boards Wired, Wireless Mobile, Cloud, Interactive, Flexible,
Composite Semiconductors External Data Sources Smart
Power Sources,
Storage, Batteries

Getting to profitability requires managing costs across multiple areas in
addition to reducing “UNIT COST” of finished product
Freight-In &
Raw Duties & Tariffs
Freight Out
Fabrication
Materials &
& Assembly
Components Selling,
Warehousing
General &
& Fulfillment
Administration
Production
Reworking &
Labor &
Scrap Defects & Financial &
Overhead Returns Billing Fees

Buyer ownership preferences are shifting from bulk purchase and ownership
to on-demand, single SKUs paid for by subscription, usage or delivered
outcome, shifting operating expenses to deploy, maintain, operate, repair
and secure products to OEM
Customer Responsible Everything-As-A-Service (XaaS): OEM

for Delivering Outcome Responsible for Delivering Outcome -
Pay-Per-
Buy/License Lease Subscribe Pay-Per-Use
Outcome
COSTS to Deliver Outcome = Product Costs, Product Deployment, Operations, Maintenance, Repair, Security

Smart products create new monetization opportunities for OEMs to
increase customer/asset/contract lifetime value using any
combination of TRANSACTIONAL, SUBSCRIPTION, PAY-PER-USE and
PAY-PER-OUTCOME revenue models
Legacy
Hardware
End-User responsible for + Smart Smart
Warranty Product Connected
product CAPEX and Product + Product
+ Product
deployment & MRO OPEX Parts + Condition + System
to deliver outcome + Monitoring Monitoring Multi-Asset +
Aftermarket Service Service Support Partner
Service License License License Services
Smart
Smart Product System of
Product Connected
Product System Systems
Product
XaaS
OEM responsible for Subscription Subscription Subscription Subscription Subscription

Or Or Or Or
CAPEX for product and Pay-Per-Use Pay-Per-Use Pay-Per-Use Pay-Per-Use
Deployment & MRO Or Or Or
OPEX to deliver outcome Pay-Per-Outcome Pay-Per-Outcome Pay-Per-Outcome

XaaS and ON-DEMAND business models take longer to get to
profitability and require UPFRONT CAPITAL for Asset deployment and
operating expenses
Customer Customer Asset

Customer
Acquisition
Support Costs Lifetime Lifetime
Costs Value Value
Asset Asset Average Average

Acquisition Deployment Revenue Per Revenue Per
Costs Costs Customer Asset
Finished Asset Customer Asset

Product and Operating Retention Retention
Parts Inventory Costs Rates Rates

XaaS business models impact every aspect of an OEM’s business
Products designed for Customer engagement with

eXcellence with frequent products and product utilization
release cycles and deployments determine success
Products Customers
Original
Equipment
Customers and products
Manufacturer Ecosystem impacts product
monetized over a period with Capital (OEM) Ecosystem unit, customer/asset acquisition
significant upfront investment in and cost-to-serve costs
product and customer operations
Talent
Talent in every functional group

in product, customer and
revenue operations is impacted

Recurring Revenue Models require continuous improvement, efficiency and
agility across PRODUCT, CUSTOMER and ECOSYSTEM operations
Customers & Distribution Channels Product (OEM & Suppliers)

Awareness Design
Devices/Assets
Retire Engineer
Customers Product Inventory
Billing & Rev Parts Inventory
Rec Lifetime Value Acquisition
Acquisition Costs Deployment
Fulfillment Costs Maintenance
Recurring Revenue Repair
Retention Rate Overhaul
Cost-to-Serve Operations New
Service Remote Support Product
Field Service Introduction
Customer
Support &
Fulfillment
Service Scale
Operations Production

CONTINUOUS IMPROVEMENT, AGILITY and EFFICIENCY across product
DEVELOPMENT and PRODUCTION cycles reduces product unit costs
Scrap & Rework

Design
Overproduction
Retire Engineer Waiting

Learn Build Product Underutilized Talent
Lifecycle Transportation
New
Service Product Inventory
Measure Introduction
Talent Motion
Scale
Production
Over Processing
Continuous
Improvement Agility Lean

Half of US and European Hardware startups manufacture in China
https://blog.hardwareclub.co/5-things-you-didnt-know-about-hardware-startups-28291bb2da16

Outsourced electronics manufacturing is growing and will continue to grow
as OEMs focus on product design and their customers
$ For Year Source
Printed Circuit Boards Prismark

$62.4B 2018
(PCBs) Partners
Electronics
New Venture
Manufacturing Services $542B 2018
Research
(EMS and ODM)
Reed
Electronic Equipment
$1,892B 2018 Electronics
(Including Components)
Research
https://newventureresearch.com/the-worldwide-electronics-manufacturing-
services-market-2020-edition/

Outsourced & offshore supply chains can create massive delays and
cost overruns
https://www.supplychaindigital.com/scm/boeing-787-dreamliner-tale-terrible-supply-chain-
management
https://www.seattletimes.com/business/boeing-787rsquos-problems-blamed-on-outsourcing-lack-
of-oversight/
Source: https://www.compositesworld.com/columns/aerospace-
composites-in-the-more-for-less-era
https://www.strategy-business.com/article/19984?gko=c8d43

Concentrated manufacturing of electronics, far from customers
creates additional roadblocks and has been an ongoing problem
Source: Electronic Design
Source: US Census
Source: EE Times Asia
Newsweek

Offshoring requires more CAPITAL, TIME, and TALENT to resolve
roadblocks in manufacturing
Ensuring quality
Designing
manufacturable product
Financing production
Scaling production
Managing supply chain
Finding contract
manufacturer
Source: http://hardwareclub.co/pages/hardware-startup-report

Climate, Cybersecurity and Digital Inequality are the biggest short-
term risks to global business beyond COVID requiring OEMs to be
lean, agile and resilient
Long-Term Risks
(5-10 Years)
Short-Term Risks
(0-2 Years)
Medium-Term Risks
(3-5 Years)
The Global Risks Report 2021 | World Economic Forum (weforum.org)

Many industries have been reshoring before COVID, lead by
Transportation Equipment and Computer & Electronics products
Transportation Computer & Electrical Chemicals Plastic & Rubber

Equipment Electronics Equipment, Products
Products Appliances &
Components
Source: Reshoring Initiative 2018 Data Report

Primary drivers for reshoring go beyond “LANDED UNIT COST” of the
finished product
Offshoring Negative Factors Domestic Positive Factors
Quality, Rework, Government Customer

Freight Costs Total Cost Skilled Workforce
Warranty Incentives Proximity
Supply Chain
Delivery Inventory Made in USA
Optimization
Source: Reshoring Initiative 2018 Data Report

The case of GE Appliance: The lean “startup” that reshored
Lean Development – Jet Engine Blades to Algorithms Lean Production – Enabled by Reshoring and Automation
“With FastWorks we’re learning that speed is our competitive advantage.”
Source: https://hbr.org/2014/04/how-ge-applies-lean-startup-practices
Source: https://www.theatlantic.com/magazine/archive/2012/12/the-insourcing-boom/309166/

Lean Manufacturing @ GE’s Appliance Park in Louisville, KY
https://www.youtube.com/watch?v=ajhIRz61zxU&feature=emb_logo

Final assembly close to customers enables OEMs to leverage agile and lean
methodologies to move fast, reduce product development and production
costs, and free up working capital resulting in a CHEAPER product
Before After
Made in China
5 Weeks
-20% -25% -30%
Number of Material Equipment
Made in USA
30 Mins
Factory- to- Parts Costs Costs Factory- to-
Warehouse Warehouse
Months 6 Days
Inventory Turn
-50% -50% -30%
Cycle Development &
Inventory Turn
GE GeoSpring™ Time Resources Production Costs

Hybrid Water $1599 $1299
Heater
The Insourcing Boom - The Made in America Movement
GE Opens Hybrid Electric Water Heater Plant, Says 'Lean' Helps Make U.S. Manufacturing Competitive | IndustryWeek

Talent and Skills
Idea-to-Scale Manufacturing Expertise

EVERY OEM is becoming a “full-stack” hardware AND software TECHNOLOGY
company requiring new processes, tools, skills and talent
40% of the on- board

components in car are Software represents 10% of
estimated to be overall vehicle content
electronics based. (Frost & today for a large car
Sullivan) (Mckinsey)
Average share
of software is expected to
grow at a compound
annual rate of 11%, to
reach 30% of
overall vehicle content in
2030 (Mckinsey)
https://www.cbinsights.com/research/industry-market-map-landscape/#unbundling%20the%20car

It takes more SKILLED TALENT to build hardware products compared to
software-only products
Software Hardware
Mobile Software Frontend Software Backend Software

Engineer Engineer Engineer Industrial Designer Materials Scientist Mechanical Engineer Electrical Engineer
DevOps Engineer Embedded Software Manufacturing Testing & Certification

Supply Chain Manager
Engineer Operations Engineer

Legacy OEM business operations are siloed, XaaS business models require
cross-functional teams to maximize lifetime value and recover acquisition
costs quickly
Legacy XaaS
One-time purchases | License Fee | Parts |Maintenance Services Subscription | Utility | Outcome
Product Products & Services

Products & Services
Billing & Revenue
Marketing Awareness
Awareness Recognition
"XaaS" Products
Sales & Legal Acquisition

Acquisition Product
Operation & Marketing
Deployment
Logistics Fulfillment
Fulfillment Engagement Sales
Logistics
Customer Success
Customer Success Deployment
Deployment Legal
Finance
Finance Billing
Billing & Rec
& Rev
Rev Rec Fullfilment Awareness
Customer Success Aftermarket

AS Services Acquisition

Productivity gains in US have shrunk China’s labor cost advantages,
but low labor cost is NOT the reason why China dominates electronics
manufacturing
“The truth is China

stopped being the low
labor cost country many
years ago. For us, the
number one attraction is
the quality of people.”
Tim Cook, CEO, Apple
https://www.bcg.com/publications/2018/china-next-leap-in-manufacturing.aspx

US manufacturing jobs peaked in the 1970s but have been steadily
increasing since the Great Depression (2008) and still nowhere near
the peak
All Employees, Manufacturing – 1939 to present
19.6M
17.3M
2008-2009*
16.5M
1981-1982*
2001*
1953-1954*
12.9M
1960-1961*
1990-1991*
1973-1975*
1970*
1948-1949*
1958-1959*
11.4M
1980*
11.5M
1945*
9M
*Recession Period https://fred.stlouisfed.org/series/MANEMP

Employment in the US Electronics Sector was steadily growing until COVID
Electronics Sector Employment 2019 Employment

(1000s) 25,710 17,790
1120 26,750
1100
1080
1060
1040
1020
115,200
1000
980 Computer hardware engineers
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Electrical and electronic engineering technicians
Jan Feb Mar Apr May Jun Electrical and electronic equipment assemblers
Jul Aug Sep Oct Nov Dec Semiconductor processors
https://www.bls.gov/iag/tgs/iag334.htm

HIRING skilled MANUFACTURING professionals is challenging due to skills
shortage, takes time and puts billions of manufacturing GDP at risk
https://www2.deloitte.com/us/en/pages/manufacturing/articles/future-of-manufacturing-skills-gap-study.html

Competing for hardware and software talent with big tech companies
is challenging as OEMS shift to “full-stack” hardware and software
products
https://adage.com/article/btob/ge-debuts-owen-ads-oscars/302844

Manufacturing & Supply Chain
Contract Manufacturing Services and Supplier Networks

OEM supply chains are multi-tiered, global and involve many
suppliers and contract manufacturers
https://s3-prod-europe.autonews.com/s3fs-
public/CA5426991.PDF?adobe_mc=MCMID%3D084
19304579124193301202501356805438831%7CMCOR
GID%3D138FFF2554E6E7220A4C98C6%2540AdobeOr
g%7CTS%3D1596560996
https://www.researchgate.net/figure/Immedi
ate-suppliers-in-Dells-global-laptop-supply- https://www.predictiveanalyticstoday.
network-Barnes-2008_fig2_236658896 com/iphone-supply-chain/
https://www.seattletimes.com/business/boeing-aerospace/boeing-to-cut-
management-layers-in-streamlining-of-supply-chain/

Electronics Manufacturing Services (EMS) companies are tiered based on
revenue, and offer a range of services to help OEMs address skills shortage
and reduce the idea-to-scale timeline
Tier 2
Tier 1
$500M -
$5B+
$5B
Design & Prototyping & Supply Chain revenue
Engineering New Product Management revenue
Services Introduction Services
Tier 3 Tier 4
$100M to < $100M
$500M revenue
revenue
Finished Product Warranty, Build-to-Order
Manufacturing Repair & Fulfillment
Refurbishment Services
Services

EMS providers have their struggles, also driven by B2B and B2C buyer
needs, and require economies of scale to improve margins
Short Product Lifecycles
Uncertain Demand
Complex Global
Supply-Chains
Supplier Quality
Management
eWaste & Sustainability

Regulations
Shrinking Operating
Margins

China, the World’s Electronics Factory
World Bank Manufacturing Output 1990-2018 ($)

4.5
TRILLIONS
China
4 China enters China accounted for an estimated
WTO
3.5 37% of electronics production in
2018, up from 2.6% in 1995 while
3
low-cost geographies overall
2.5 USMCA
EU
accounted for 71% of the total in
2 USA 2018 (25% in 1995). In the same
period production in the mature
1.5
Japan geographies has fallen to 29% from
1 Germany 75% in 1995
0.5 UK
Canada http://www.rer.co.uk/image/data/Downloads/Yearbook%202019%204%20Page.
0 pdf
2001
1990 1995 2000 2005 2010 2015

Printed Circuit Board (PCB) fabrication and assembly is highly fragmented
with 1800+ companies globally
Global PCB Manufacturers & Fabricators USA PCB Manufacturers and Fabricators
600 480 200

489 542 162
500
400 150
300
100
200 121
100 41 50 55
0 9 3 20 72 59 90 1 13 1 11 6 26
0 6
2 1 2
Source: http://www.pcbdirectory.com/

US Manufacturing CAPACITY UTILIZATION peaked in the 1970s, has been
stable since 2015, but has dipped to historically low levels due to COVID
Manufacturing capacity utilization in US factories – 1972 to present Manufacturing capacity utilization in US factories – 2015 to present
1981-1982*
88%
2008-2009*
84%
2001*
79% 78%
78% 76%
2020*
1990-1991*
1973-1975*
71%
68% 71%
1980*
63%
60% 60%
https://fred.stlouisfed.org/series/TCU/
*Recession Period

North American Electronics industry growth is slow, but positive with
surging demand thanks to COVID
Source: https://www.ipc.org/ContentPage.aspx?pageid=Current-Industry-Trends http://www.ipc.org/ContentPage.aspx?Pageid=IPC-Releases-PCB-Industry-Results-for-April-2020

Majority of EMS providers in the US cater to High Mix, Low-Volume and
High-Margin products with Low Mix High Volume located in Asia
Mostly Domestic
Very Few Mostly
in Asia
https://www.rbbsystems.com/blog/bid/301811/why-high-mix-low-volume-does-not-equal-small-batch-job-shop

There’s more to reshoring than just picking up and moving production
from China
https://www.jsonline.com/story/news/2017/07/26/scott-walker-heads-d-c-
trump-prepares-wisconsin-foxconn-announcement/512077001/
“But exporting Foxconn’s Chinese

strategy is virtually impossible. “Rather than employing a
manufacturing workforce, the Foxconn
The global supply chain for Wisconsin facility is now focused on
electronics remains firmly rooted engineering and research, which are
in Asia, where advantages like resources that are already in high-
low-cost labor and an demand and low-supply.”
abundance of skilled engineers
https://www.forbes.com/sites/daveevans/2019/01/30/lear
have been crucial to the region’s ning-the-right-lessons-from-wisconsins-foxconn-
https://www.theverge.com/2017/8/10/16125792/apple-foxconn- development as a manufacturing deal/#262b59a170ef
wisconsin-deal-jobs-profitable-2043
base.”x
https://www.nytimes.com/2017/09/20/business/foxconn-
trump-wisconsin.html

Enabling Technology & Industrial
Automation

Open-source and commercial IoT and Industry 4.0 technology
enables efficient, agile, and continuous improvement for OEM’s
INNOVATION, INDUSTRIAL and COMMERCIALIZATION processes
Enabling Technology OEM Processes

Building & Finding &
Servicing Keeping
Products Products Customers Customers
New Materials & Additive Hardware Dev Kits, Sensors Power Sources & Battery Device & Edge
Manufacturing & Electronics Technology Connectivity Technologies
Original
Equipment
Balancing Manufacturer
Embedded & Edge Device-to-Cloud IoT
Embedded, Edge & Cloud
Human-Machine
Revenue, Capital (OEM) Ecosystem Building &
Funding &
AI/ML Platforms &
Software Platforms Platforms
Applications
Interfaces
Integrating
Costs Ecosystem
Talent
Cloud Computing Robotics Autonomous Systems Computer Vision Accessing

Talent &
Skills

Manufacturing is behind many industries in the adoption of digital and
automation technologies
https://www2.deloitte.com/us/en/insights/focus/industry-4-0/digital-leaders-in-manufacturing-fourth-industrial-revolution.html

Commercial and Open Source hardware & software technologies are
enabling OEMs to build prototypes and finished products FAST, COST
EFFECTIVELY and full of RICH (SMART) FEATURES
Device & Edge

New Materials & Hardware Dev Kits, Power Sources & Battery
Connectivity
Additive Manufacturing Sensors & Electronics Technology
Technologies
Embedded, Edge &

Embedded & Edge Device-to-Cloud IoT Human-Machine
Cloud AI/ML Platforms &
Software Platforms Platforms Interfaces
Applications

Open-Source Hardware and Software facilitates a community-driven
approach to solving challenging problems and democratizing access
to enabling technologies

Mechanical parts can be manufactured using TRADITIONAL
(SUBTRACTIVE, FORMATIVE), and ADDITIVE Manufacturing Methods
Subtractive Manufacturing Formative Manufacturing Additive Manufacturing

Making objects by removal of material by Uses processes like injection molding, die Process of joining materials to make objects
milling, drilling, grinding, carving, etc., from a casting, pressing, and stamping to form from 3D model data, usually layer upon
bulk solid to leave a desired shape materials into the desired shape. layer.

Additive Manufacturing (AM) uses different forms of raw materials and
binding processes to build physical products layer by layer
AM Materials AM Binding Processes

Powder
•Laser Fusion/Sintering, Electron Beam Melting,
Binder Jetting, Powder + Laser
Metals Plastics Polymers Glass

Liquid
•Laser Polymerization, Light Projection
Polymerization, Material Jetting
Filament
Fabric Wood Ceramics Bioink
•Fused Deposition, Wire + Electron Beam
Sheet
•Ultrasonic bonding, Laser Lamination
Bone Medication Skin Food

Additive Manufacturing eliminates many constraints in getting from
idea-to-scale manufacturing using traditional methods
Traditional Additive
Manufacturing Manufacturing
Production Time Long Short
Mass Production Yes No
On-Demand No Yes
Material Waste Increased Reduced
Complex Structures No Yes
Customization Low Infinite
Prototype Costs High Low
Finished Product Costs Low High
https://www.slideshare.net/GEKorea/how-to-uncover-successful-
Labor Costs Increased Reduced
additive-applications-that-lead-to-profitable-growth
Part Inventory Needs High Low

Part Consolidation No Yes
Weight and Durability Improved No Yes

3d printing applications exist at every stage of the product lifecycle
and across industries
Prototyping ELECTRONICS ORTHODONTICS SPACE HELMETS
Tooling
MEDICATION SHOE SOLES CERAMIC ART
Functional Parts
FOOD JET ENGINE NOZZLE HOUSE

Additive Manufacturing ecosystem enables agile and lean product
development and production process for prototypes and finished products
3D Printing Machine Post Processing 3D Scanning

Material Suppliers
OEMs Equipment Equipment
Design-to-Scale AM
Service Providers Marketplaces
Software

Digital end-to-end: Software – from design to QA – manages the
manufacturing and quality process for Additive Manufacturing
•3D Geometry Design •Optimize Design for •Part Orientation •Manufacturing •Process Monitoring •Data Protection
•AM-specific CAD AM •Support Generation Execution Systems •Inspection •Encryption
•Generative Design •Optimize •Near-net shape •Enterprise Resource •Traceability •Rights Protection
Manufacturing Process expansion Planning
•Finite Element Design •Nesting •Product Lifecycle
•Computational Fluid •Slicing and Toolpath Management
Dynamics Generation
Quality
Design Simulation Pre-Processing Manufacturing Security
Assurance
Manufacturing
Software
Additive

“Manufacturing-As-A-Service” marketplaces and service bureaus provide
supply chain resiliency and elasticity for fabricated parts by leveraging
spare capacity in existing factories
SHEET METAL INJECTION URETHANE PRINTED CIRCUIT

3D PRINTING CNC
FABRICATION MOLDING CASTING BOARDS

China has more Industrial Robots than Japan, USA, Rep of Korea,
Germany and Italy put together
https://ifr.org/ifr-press-releases/news/record-2.7-million-robots-work-in-factories-around-the-globe?

Automotive and Electronics Industries lead in Robot deployments
https://ifr.org/downloads/press2018/Presentation_WR_2020.pdf

Robotics in manufacturing like it’s 1985, but we’ve had a national
Robotics Roadmap since 2009!
Industries and Use Cases Roadmap Research

Manufacturing Architecture & Design
Logistics Mechanism
Transportation Grasping & Manipulation
Food Production Sensing & Perception
Quality-of-Life Planning and Control
New Services Multi-Robot System
Healthcare Learning and Adaptive Systems
Security and Safety Human-Robot Interaction
https://www.therobotreport.com/wp-
content/uploads/2020/09/roadmap-2020.pdf

Incentives & Investments

“Made in China 2025” is China’s answer to “Industry 4.0”, and China’s
investment (as % of GDP) in advanced manufacturing technology has
been outpacing US
Comparing Global Industry 4.0 Readiness
High-end numerically
New information Aerospace
controlled machine
technology equipment
tools and robots
Ocean engineering High-end rail

Energy-saving cars
equipment and high- transportation
and new energy cars
end vessels equipment
New materials, such

Electrical equipment Farming machines
as polymers.
Bio-medicine and
high-end medical
equipment.
https://industrytoday.com/comparing-global-industry-4-0-readiness/
http://english.www.gov.cn/policies/latest_releases/2015/05/19/content_281475110703534.htm

Revitalize American Manufacturing and Innovation Act of 2014
convened public-private institutes under one umbrella, supported by
NASA, the NSF, and Departments of Commerce, Defense, Education,
and Energy

Future of Manufacturing Initiatives are not unique to China or the US
https://ec.europa.eu/futurium/en/content/digitising-european-industry-catalogue-initiatives

COVID! COVID! COVID!

Manufacturers are expecting COVID-19 to have a massive impact on
their business
78.3%
Anticipate financial impact
53.1%
Anticipate change in operations
35.5%
Facing Supply Chain Disruptions
Source: National Association of Manufacturers Survey Feb/Mar 2020

COVID-19 has increased interest in reshoring of manufacturing
Source: Forbes
Source: Boston Herald
Source: Financial Times Source: Thomas Publishing Company

Computer & electronics sector accounts for almost half the drop in US
imports from China due to COVID and is leading the charge to
reshoring
Percentage Drop in Imports Sectors Driving Reshoring
Source: Rabobank calculations, Macrobond, US Census Bureau.

COVID-19 was a showcase for additive manufacturing and the
benefits of decentralized and local manufacturing at scale

Are we ready?
Source: New York Times

Reshoring questions to ponder…
Talent Gap How do we train, retrain and upskill talent to fill the manufacturing skills gap?
Short Supply What would it take to reconfigure the existing electronics manufacturing ecosystem to support locally
manufactured low-mix products?
Chains
Manufacturing Is there capacity available in existing electronics manufacturing infrastructure to support reshoring?
Capacity
Technology What infrastructure upgrades and automation is needed to modernize existing electronics
manufacturing and supply chain infrastructure in the US to support reshoring and can manufacturers
Gap afford them?
Incentives and What incentives, investments, and public-private partnerships do we need to encourage OEM’s to
reshore and are these enough to quickly scale-up talent, ecosystem and manufacturing & supply
Investments chain infrastructure?

Thank You
Feedback?
Harinderpal (Hans) Hanspal
hans@thing.company

Reshoring Electronics Manufacturing and Supply Chain

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Reshoring Electronics Manufacturing and Supply Chain

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Electronics Products

Manufacturing Beyond COVID

Harinderpal (Hans) Hanspal

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Customers Distribution Original Equipment

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Consumer Automotive Medical IT Equipment Internet of

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Electronics Development and Production Process

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Privacy and Security Frequent Product

Planet Friendly and

"Set and Forget" No Ownership or Single

Rapid Deployment Direct from

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Building & Servicing Finding & Keeping

Product Development & Production Delivering Customer Value And Outcomes

Accessing Talent & Skills

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All laws except California and

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SENSOR WATCH PHONE TURBINE AUTOMOBILE AIRPLANE

Low Mix/Complexity High Mix/Complexity

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Pre-Seed Seed Post-Seed

Design & Prototype & Pilot Small Batch

MECHANICAL COMPONENTS ELECTRICAL CONNECTIVITY SOFTWARE PACKAGING

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Customer Responsible Everything-As-A-Service (XaaS): OEM

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OEM responsible for Subscription Subscription Subscription Subscription Subscription

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Customer Customer Asset

Asset Asset Average Average

Finished Asset Customer Asset

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Products designed for Customer engagement with

Talent in every functional group

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Customers & Distribution Channels Product (OEM & Suppliers)

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Scrap & Rework

Retire Engineer Waiting

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$ For Year Source

Printed Circuit Boards Prismark

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Source: Electronic Design

Source: EE Times Asia

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Managing supply chain

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The Global Risks Report 2021 | World Economic Forum (weforum.org)

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Transportation Computer & Electrical Chemicals Plastic & Rubber

Source: Reshoring Initiative 2018 Data Report

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Offshoring Negative Factors Domestic Positive Factors

Quality, Rework, Government Customer

Source: Reshoring Initiative 2018 Data Report

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