Supply Chain and Logistics

In 2020, McKinsey & Company surveyed senior executives about their supply chains. They found 85% of respondents struggled with inefficient digital technologies, and 75% reported problems with production and distribution. So it’s no surprise that 93% of respondents said they hoped to increase the level of resilience across their supply chain. Increasing resiliency, however, can be an elusive goal—especially without careful planning. Gone are the days when supply chain planning was as simple as logistics and inventory management. To succeed in today’s business environment, manufacturers must manage every aspect of the supply chain, from raw materials to product returns and recycling.

Why Supply Chain Planning is Essential

Effective supply chain planning is more than a logistical necessity; it’s a strategic imperative.

While an enthusiastic manufacturer may be tempted to skip the planning and “get to work,” inadequate supply chain planning can lead to higher costs, lower profits, and dissatisfied customers. So, when mapping out the flow of your goods from component sourcing to the end user, it’s crucial to carefully consider every step of your product’s journey. Doing so can help:

Improve delivery reliability and timeliness
Predict variability in demand
Identify and anticipate “what-if” scenarios
Standardize procedures
Reduce unnecessary waste
Lower manufacturing costs
Increase product quality
Enhance customer satisfaction

The 6 Stages of Supply Chain Planning

Gartner regularly recognizes companies like Apple and Cisco as masters of supply chain strategy, but you don’t have to be an industry behemoth to practice good supply chain planning. While it can be a complex process, keeping in mind the important stages below will help companies of all sizes improve their supply chain planning.

1. Product Planning

Before sourcing your materials, you need to start with product planning. What products should you bring to market? How many units will you need? How can you be as efficient as possible to avoid wasting time and raw materials, while still producing a high-quality product? One way to be efficient is to keep the manufacturing process in mind when you first design your product. Following design for manufacturability (DFM) principles will help you produce a higher quality product at a lower cost, and avoid supply chain disruptions. For example, by using DFM principles, an electronics manufacturer can avoid designing a device with nonstandard components, thus bypassing the need for hand soldering and eliminating material sourcing uncertainties.

2. Demand Planning

Accurately forecasting demand for your product is essential for maximizing profit. Your goal should be to have sufficient inventory on hand to meet your customers’ needs, while avoiding both shortages and excess inventory. To do this, you should take into account a number of factors. How will new technological developments and trends impact demand for your product? How are consumer preferences evolving? Effective demand planning allows you to quickly adapt to changing situations.

Inefficient demand planning can have serious consequences, as the automobile industry discovered a few years ago. When the COVID-19 pandemic first hit in 2020, many automakers saw a decline in cars on the road and quickly canceled or reduced orders for chips. Then, when consumer demand rebounded more quickly than expected, carmakers found themselves competing with other industries for a limited supply of chips.

While no company possesses a crystal ball to predict demand, good data can provide a close approximation. Good demand planning means keeping track of many things at once, including historical data, lead times, market trends, and even external factors such as weather and oil prices, which can impact the cost of transportation. Pulling all this together requires robust vendor and supply chain connections, real-time tracking of lead times, and strong planning processes that use precise material forecasting even for seasonal and peak-volume demand.

Demand planning can be especially important to electronics manufacturers, as their products often have short lifecycles. Companies that skip demand planning can become victims of the rapid pace of technological change within the industry. Those that embrace it are able to make informed decisions about production levels, inventory management, and resource allocation.

3. Supply Requirement Planning

Next, manufacturers need to plan for supply. How much inventory do you currently have on hand? What is your production capacity and that of your suppliers? Do you have good relationships with your suppliers? How reliable are your partners?

When planning the sourcing of your raw materials and components, you also need to be prepared for factors out of your control. For example, is your plan resilient and able to weather geopolitical turmoil, material shortages, disease outbreaks, and labor instability?

Success at this stage relies on having a well-established network of reliable, quality suppliers. To establish those relationships, supply chain planning strategies at this stage might include supplier market research, request for proposals (RFPs), contract negotiations, and supplier performance evaluations.

4. Production Planning

It may have a similar name, but production planning is very different from product planning. Whereas product planning is centered on the product itself, production planning is focused on how the product will be manufactured. For example, during this stage, you might create detailed schedules for manufacturing activities, such as the timing of production runs. This stage is also the time to plan your production methods based on your product’s characteristics and demand patterns. Your production plan should also consider the labor, equipment, and facilities that will be needed to manufacture your product.

5. Sales and Operations Planning

This executive-level process is an ongoing effort to synthesize demand, supply, and financial planning in order to forecast the profitability of a product over several years. This process incorporates input from post-production teams like marketing and sales so that operational teams can better meet a company’s organizational and financial goals. Traditionally, sales and operations planning (S&OP) was a quarterly process. In today’s world, however, S&OP can be conducted more frequently, thanks to technological advances that provide instant access to real-time data.

6. Reverse Logistics

Savvy manufacturers know that their product isn’t out of their hands just because it’s been sold and delivered, which is why they have a plan for reverse logistics. When it comes time to process a customer exchange or properly dispose of a product, companies with a plan in place can easily handle either scenario. In the case of returns, for example, forward-thinking companies are now using location technologies like RFID chips to aid in real-time tracking of returned items. Unlike traditional barcode systems, RFID tags provide automated data capture, reducing the need for employee intervention. These specialized tags can help companies automatically capture critical information about returned products, such as product condition, reason for return, and product handling requirements.

Digitally Transforming Your Supply Chain Planning

RFID chips aren’t the only tools transforming the supply chain. If you’re not taking advantage of technology, you are missing out. Not only have advanced technologies changed the way business is done, they’re also optimizing the end-to-end management of the supply chain. This is why industry leaders like Lenovo have implemented a wide range of technological innovations, including G5, AI, AR/VR, and IoT, which together have enabled the company to slash lead times, improve product quality, and reap a host of benefits throughout the supply chain.

As companies like Lenovo have discovered, effective supply chain planning is more than a logistical necessity; it’s a strategic imperative. A company that carefully focuses on each stage of supply chain planning—from product planning to reverse logistics—will enhance its resilience against disruptions, while cutting costs and maintaining quality. And as the manufacturing landscape grows more complex, companies that prioritize data-driven supply chain strategies will gain a competitive edge.

Are You Ready to Optimize Your Supply Chain?

Our responsive team has worked with companies of every size, and we know how to customize a plan to meet your supply chain planning needs. Whether you’re seeking to reduce material lead-times, cut inventory costs, streamline your shipping, or effortlessly track your products, we have the services you need. Contact us today to learn more.

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When the car was first invented, models were built slowly, one whole automobile at a time, just like every other manufactured product of that era. Then in 1901, Ransom Eli Olds introduced the first mass-produced vehicle, the Oldsmobile Curved Dash, which was built using a method developed by Olds—the stationary assembly line. Years later, Henry Ford added a conveyor belt to the assembly line, revolutionizing manufacturing and setting the standard for how products would be made for the next century. Now the industry is undergoing another revolution—digital manufacturing.

What is Digital Manufacturing?

The term “digital manufacturing” describes the integration of computer systems and digital technologies into the manufacturing process. It’s an approach that relies less on traditional manufacturing practices and more on emerging technologies such as robotics, artificial intelligence, and the Internet of Things (IoT). This confluence of new technologies has created such a buzz in the manufacturing world that Klaus Schwab of the World Economic Forum coined the phrase “the fourth industrial revolution” to describe this shift.

Digital Manufacturing Technologies

From design to delivery, digital manufacturing technologies are adding efficiency, flexibility, and productivity to the entire product lifecycle—yielding higher quality products while accelerating time to market. Here are six of the most impactful of these new technologies:

Digital Twins

Digital twins are virtual counterparts of physical objects or systems. These real-time digital replicas allow companies to test new products before they are built in the real world, and can cut the time it takes to go from design to finished product. Volvo, for example, uses digital twins of new vehicle designs to virtually test the aerodynamic properties of different materials and proposed design features. Using this technology, Volvo can improve vehicle performance and create more fuel-efficient models—even before the first prototype is built.

And Volvo is hardly alone. McKinsey & Company reports product development leaders are rushing to build their digital-twin capabilities, with the global market for this technology predicted to grow approximately 60% annually, reaching $73.5 billion by 2027.

From design to delivery, digital manufacturing technologies are adding efficiency, flexibility, and productivity to the entire product lifecycle—yielding higher quality products while accelerating time to market.

Additive Manufacturing and Rapid Prototyping

Additive manufacturing, also known as 3D printing, is the process of building objects layer-by-layer using a 3D printer that converts digital data into a physical object. With its ability to create complex shapes and customized products directly from design files, additive manufacturing allows device prototypes to be produced rapidly and cost-effectively. In addition to slashing lead times, this rapid prototyping gives manufacturers greater flexibility. For example, while it’s not practical to produce a small batch of PCBs with traditional prototyping, an electronics manufacturer using rapid prototyping can efficiently produce prototype batches of as little as five units.

Artificial Intelligence

Artificial intelligence (AI) is a specific field within digital technology that focuses on developing intelligent machines that can approximate human thinking. Using machine learning and natural language processing, AI systems can learn, reason, and make decisions—mimicking human reasoning while working far more quickly and processing much larger data sets than the human mind is capable of.

With AI, manufacturers can mine and analyze vast amounts of data to optimize product design, material choice, and other facets of production. Leveraging data can also help a manufacturer better navigate its supply chain, especially when managing inventory. And AI has even been used to help manufacturers determine when it’s more cost-effective to simply raise wages vs. hiring new staff.

IoT Technology

The Internet of Things (IoT) is a network of physical devices embedded with sensors, powered by software that allows communication across the internet. At home, this technology might help you control your lights or notify you when it’s time to put your laundry in the dryer. On the factory floor, IoT technology is transforming the way manufacturers make their products. For example, using electronic tags and sensors, manufacturers can track products throughout the supply chain; inventory managers can locate devices within a warehouse; and plant operators can service equipment before malfunctions occur.

Industrial Robots

Worldwide, there are approximately 3.9 million industrial robots, according to the International Federation of Robotics. Increasingly, these machines are helping manufacturers become more efficient. For example, German automaker Mercedes-Benz has entered into an agreement with robotics company Apptronik to test humanoid robots at select Mercedes-Benz factories. These robots—such as Apollo, a 160-pound, 5’8” bipedal robot—will be used to automate repetitive tasks, according to Mercedes-Benz and Apptronik.

Augmented Reality

Augmented reality (AR) uses computer-generated images, projected onto or near a real object or scene, to enhance our perception of the real world. From flight training to road navigation, this technology is changing our world. For manufacturers, AR has proven to be a productivity-boosting enhancement in production.

Traditionally, manufacturers share work instructions through physical or digital manuals. This requires workers to switch their attention from the product they’re working on to a book or computer screen. But with AR, important information is projected directly onto the work surface, eliminating switching time and decreasing the distraction and fatigue that workers can experience when required to constantly shift focus.

Some Key Benefits of Digital Manufacturing

Digital manufacturing technologies offer many benefits to manufacturers.

Increased Efficiency: Digital technologies allow manufacturers to create new efficiencies. In 2019, for example, General Electric discovered that using AR glasses at its jet engine manufacturing facility increased the productivity of the engine mechanics.
Faster Innovation Cycles: Advanced design tools and virtual prototyping allow products to go from design to finished product faster than ever before.
Improved Customer Satisfaction: Digital manufacturing technologies give manufacturers the flexibility to rapidly adapt to market shifts.
Cost reduction: AI systems are enabling manufacturers to streamline manufacturing processes to save time and reduce material waste. Access to detailed data also enables manufacturers to keep manufacturing machinery in peak operating condition through predictive maintenance, avoiding costly shutdowns and delays.
Better Quality Control: With real-time monitoring of manufacturing processes, product issues can be identified and corrected immediately. Manufacturing processes can also be more easily standardized, leading to higher quality products.
Greater flexibility: With advanced technology, manufacturers can now quickly reconfigure production lines for different products and varied batch sizes.

How to Start Your Digital Transformation

Given the many benefits of digital manufacturing, it may be tempting to dive straight into the process. But before starting your digital transformation, you need a plan. A blueprint, or operating model, will provide a clear vision of what your finished manufacturing system will look like once it is complete, and will help you stay on track during your transformation.

In order to develop a reliable blueprint, you need to first evaluate your operational value stream—the sequence of activities required to deliver your product or service to your customer. Once you’ve clarified your production steps, you can prioritize the business process improvements that will have the most impact. For example, if your goal is to cut production time in half, what process improvements will be required to reach that state? Can you eliminate steps or streamline a process through automation? Can you analyze data better to save time in the long run?

Industrial robots, augmented reality, IoT technology—implementing these digital technologies can be a daunting process. How do you figure out the right balance between new technology and your traditional processes? How fast do you transition? How much can you afford to spend on new technology? Fortunately, you may not need to stress over these difficult questions. A reputable third-party vendor will likely already understand how to deliver the services and products you need in the most efficient and cost-effective way. For many manufacturers, this approach is the right solution as they grapple with the best way to transition into the new world of digital manufacturing.

Reliable Electronics Manufacturing

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Hippocrates, famous for the Hippocratic Oath, urged doctors “namely to do good or to do no harm.” This admonition—routinely paraphrased as “first do no harm”—is also a good adage for medical device manufacturers to keep in mind, as the practice of medicine relies more than ever on the devices they make. But while most medical device manufacturers are careful to ensure that their products are safe and reliable, they don’t always give medical device packaging the same careful attention.

That oversight can have serious, even fatal, consequences.

7 Common Mistakes in Medical Device Packaging

There are two main purposes for medical device packaging: protecting a product so that it arrives intact and in good working order, and maintaining a sterile environment. Contamination is an especially urgent concern. According to the U.S. National Library of Medicine, viral and bacterial infections are among the ten leading causes of morbidity and mortality in the United States.

One way to prevent contamination—and the subsequent recall—of medical devices is with reliable, high-performance packaging. According to the U.S. Food and Drug Administration (FDA), packaging and labeling issues account for 13% of all medical device recalls, which is why some experts assert that medical device packaging is nearly as important as the device itself.

According to the U.S. Food and Drug Administration (FDA), packaging and labeling issues account for 13% of all medical device recalls, which is why some experts assert that medical device packaging is nearly as important as the device itself.

Now more than ever, healthcare organizations are working hard to reduce the number of hospital-acquired infections. And to help their customers achieve these goals, savvy medical device manufacturers have learned how to avoid the seven most common packaging pitfalls.

Mistake #1: Losing Sterile Integrity

Ensuring the sterility of medical devices is critical for reducing infection, yet it is the most common defect found in medical device packaging. Unfortunately, some medical device manufacturers fail to create a truly sterile barrier system (SBS) in which to encase their products for transport. This means that in some cases, when their products arrive at the point of use, they fail to meet the aseptic standards required by FDA and International Organization for Standardization (ISO) regulations.

While nonsterile packaging can be the result of contamination at the packaging site, often the issue is more fundamental—the design of the packaging itself. It’s important to keep in mind that packaging can only be made sterile on the inside. A package’s exterior will always arrive at its destination in a nonsterile state. This means it’s essential to design packaging that can be opened without introducing contamination.

So, how can you design your package to limit contamination? The National Library of Medicine found that pouches that had outward-curling seals had significantly lower contamination rates. In other words, if the exterior of a package curled away from the interior as the package was opened, it was far less likely that the outside of the package (the nonsterile surface) would come in contact with the interior’s sterile contents.

Mistake #2: Not Accounting for the Device’s Entire Journey

A sterile barrier system is only useful if it stays intact for its entire journey, which is why your package design must include protective material to shield the SBS from the time of assembly to the point of use. Many sterile packages are damaged due to pinholes, slits, cuts, and tears. To avoid these outcomes, wise manufacturers design an entire packaging system that protects the device—and its SBS—throughout the journey from factory to hospital. This means designing resilient packaging that can withstand exposure to road vibration during long hours of transportation. Packaging must also be strong enough to survive warehouse mishaps like a fall to the ground.

Mistake #3: Ignoring Best Practices for Medical Device Packaging

Whether you’re shipping something as simple as a box of bandages or as complex and delicate as a tracheotome, your packaging is critical. Both the United States and Europe have stringent regulations for medical device packaging. Yet not all manufacturers adhere to best practices and regulations when it comes to certain aspects of their product packaging.

Some manufacturers, for example, fail to get their medical device packaging properly validated. It’s true that validation is an extensive and at times complex process. But the regulations serve a purpose. Rigorously testing your proposed packaging will ensure that it provides an effective barrier against microbial ingress, moisture, and environmental contaminants. Furthermore, a good validation process does more than ensure your packaging meets regulatory requirements. It also guarantees that your device gets to your customer in sterile condition, able to perform as advertised right out of the box. This preserves your brand reputation, and eliminates liability headaches as well.

Of course, your efforts to comply with FDA and ISO regulations can be negated if your product is contaminated by a vendor. So, if you’re working with third-party contractors, be sure to screen them carefully to ensure they’re also adhering to best practices for medical device packaging and shipping.

Mistake #4: Using the Wrong Packaging Material

Many medical devices are packaged using thermoform trays—plastic trays that are made by heating plastic sheets and molding them into the desired tray shape. But there is a wide range of plastic available for this purpose, and choosing the wrong one can lead to packaging failure. For example, if you’re packaging a medical device with a lot of mass, you might need a high-impact plastic such as polycarbonate to reduce fracturing during distribution and handling.

The design of the thermoform tray is also critical. The tray or case must be tight enough to hold the medical device firmly in place. Otherwise, a loose product could jettison through the tray lid and fracture the plastic casing from the inside out. Conversely, packaging must have a bit of give, so that it doesn’t damage sensitive sensors or other high-tech components. A good package design strikes the right balance between these two extremes.

Mistake #5: Using the Wrong Container

In addition to using the right packaging material, you need to choose the right size and strength for your exterior shipping box. For example, if you are using an outer carton to protect your sterile pouch, you need to avoid squeezing the pouch into a too-small carton. You should choose a container that avoids any folding, wrinkling, or creasing of the ends of your sterile pouch. Otherwise, the vibrations of a moving truck could lead to pinholes at the junctures of the creases or folds of the pouch. Complex pouch folds are even more problematic, as they form a concentrated point of stress at the juncture of the materials.

When it comes to the sterile pouches themselves, however, bigger isn’t always better. Some research has found that increased contamination rates are associated with larger pouches versus smaller ones. Unfortunately, the reason for this is not entirely clear. One theory is that larger pouches require more hands-on repositioning to open, and that this increased handling offers more opportunities for contamination.

Mistake #6: Inadequate Testing

Just as it’s important to test and inspect your product, you need to test the effectiveness of your packaging material—and package design—to ensure that the SBS and the outer carton will protect the device as it travels from assembly to customer to storage.

Testing might reveal, for example, that a single sterile barrier is not sufficient to maintain a sterile environment for a product that might sit in a hospital storeroom for up to a year; instead, a double barrier is needed. Real-time aging testing like this will enable you to see how your medical device packaging holds up under storage conditions in which both temperature and humidity can fluctuate widely, especially over an extended period of time.

But what if you’re trying to beat a competitor to market? Or more importantly, get a life-saving medical device to patients as quickly as possible? That’s where testing via accelerated aging—elevating temperatures to artificially speed up the aging process—can be useful. For example, subjecting a sterile barrier system to 40 days of +55°C temperatures has roughly the same effect as storing the SBS at +23°C for a year. That’s a huge time savings.

There is a caveat, however. Using temperatures that are too high—in the hopes of cutting a few more days off the testing process—can cause a package to melt or warp in a way it never would under real-world conditions, negating the purpose of the test. So, exercise caution when applying accelerated aging techniques. Or work with a laboratory that specializes in testing via accelerated aging.

Mistake #7: Neglecting to Develop a Recall Protocol

In addition to protocols for testing, manufacturers should develop specific protocols in case the need for a recall arises. Such a protocol might involve plans for recall initiation, reporting, execution, and monitoring. Recall protocols are especially important right now, as medical device recalls are on the rise. Between 2012 and 2022, recalls increased by 125%. (And medical device adverse event reports increased by over 500%.)

Having protocols in place means you’ll be better prepared to initiate a voluntary recall, which will do less damage to your business reputation than a forced recall. That was the case for medical manufacturer Nurse Assist, LLC. In November 2023, the company issued a voluntary recall on its saline and other water-based products over concerns of compromised sterility. These included various bottles, spray cans, cups, and syringes. When the recall was initially released in November 2023, no adverse effects had been reported. And while the FDA has since received reports of adverse events, Nurse Assist’s prompt, voluntary action has enabled the company to mute the damage to its brand.

Diligence is Needed in Medical Device Packaging

As healthcare providers continue to prioritize infection reduction, and medical device recalls continue to rise, designing and deploying effective medical device packaging is more important than ever. Avoiding the seven pitfalls outlined here is the first step in making sure that your packaging performs in a way that increases patient safety—and enhances your company’s reputation.

A Packaging Partner You Can Rely On

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There’s no question that computing advances like artificial intelligence (AI), big data analytics, and the internet of things (IoT) have had a big impact on electronics manufacturing. These and related technologies have enabled manufacturers to streamline design and production, as well as tighten the supply chain through greater integration with suppliers and improved communication with customers. But these new technologies have also introduced new manufacturing cybersecurity risks. A 2024 report by ABI Research and Palo Alto Networks found that 25.7% of industrial enterprises have experienced shutdowns due to cyberattacks. And according to Statista, over a quarter of detected cyberattacks in 2023 were against manufacturing firms.

Of course, the answer isn’t to go back to the days of fax machines and proprietary data systems. But to make sure that the latest cyber technologies work for you, it’s important to take steps to safeguard your systems and your data—especially from malicious actors.

Why Cybercriminals Target Manufacturers

Today’s cybercriminals are sophisticated, often able to adopt the personas of co-workers to ask what appear to be routine, work-related questions in order to obtain sensitive information.

Many people assume that finance-related firms are a higher target for cybercriminals than manufacturers. But that’s not the case. The manufacturing industry has over 40% more attacks than the finance or insurance industries, according to Statista. And ABI/Palo Alto has found that 70% of industrial organizations experienced cyberattacks in 2023.

So, what makes electronics manufacturers such a prime target?

One reason electronics manufacturers are attractive to cybercriminals is their large repositories of valuable data. Manufacturers often have extensive databases filled with personal information. That’s a virtual gold mine for hackers, who can sell that data to unscrupulous third parties for a large profit. Manufacturers also have valuable trade secrets and other proprietary information that make them a tempting target for ransomware attacks.

Cautionary Tales

A number of manufacturing companies have been targeted for ransom in recent years. The 2020 ransomware attack against Foxconn may be the most famous of these cyberattacks. In that breach, cybercriminals infiltrated Foxconn’s data systems and demanded a ransom of over $34 million in Bitcoin to prevent the release of sensitive data. And in June of that same year, Honda was hit by a cyberattack that took manufacturing plants in Ohio and Turkey offline.

A 2023 cyberattack on consumer products giant Clorox took many of its automated systems offline, including systems used by the likes of Walmart and Target to order products, costing the company $356 million.

As these examples illustrate, the damage from a successful cyberattack can cost hundreds of millions of dollars—making cybersecurity a paramount concern.

Two Factors Contributing to Manufacturing Cybersecurity Risk

Hackers have been around as long as there have been systems to hack. However, recent advances in technology, coupled with the global pandemic in 2020, set the stage for a rapid escalation of cybercriminal activity.

When the pandemic first hit, there was a mass movement of workers from onsite offices to less-secure remote workspaces—a cybercriminal’s dream. Companies now found themselves vulnerable and ill-prepared for a shift that came on suddenly and had exponential growth. Few companies had robust plans that accounted for the specific security requirements of offsite work. Cybercriminals quickly took advantage of the situation, and ransomware demands skyrocketed. According to the Harvard Business Review, in 2020, the ransom amount paid to cybercriminals increased by more than 300%.

Another challenge to manufacturing cybersecurity is the introduction of more technology into the manufacturing process. While advances such as industrial robots and artificial intelligence can increase productivity and improve supply chain management, these technologies can likewise increase security risks. For example, the rise in connected devices within a manufacturing facility has given cybercriminals new points of attack. Now, if criminals can locate a vulnerability in one area, they potentially have access to a company’s entire interconnected landscape.

Five Ways to Enhance Your Manufacturing Cybersecurity

Cybercriminal activity has caught the attention of the U.S. government, which is trying to increase manufacturing cybersecurity by bringing chip production back home. The 2022 CHIPs and Science Act, for example, requires all semiconductor manufacturing facilities to be located in the United States in order to qualify for funding. The assumption is that facility-wide sabotage will be harder to conduct under U.S. laws and the watchful eye of U.S. counterintelligence officers.

The duty to combat cybercriminals, however, is not solely a government responsibility. There are many steps that companies can take to increase their own manufacturing cybersecurity.

1. Implement Zero Trust Architecture

Zero trust architecture (ZTA) is a security framework based on a simple concept: Don’t automatically trust any user or device, regardless of their location or network.

This strict approach to cybersecurity came about a couple of decades ago. At the time, the standard security model was based on a hardened perimeter around a corporate intranet. While there were protocols in place to ensure that only trusted users gained access to company systems, once inside a company’s online environment, a user could roam freely. This model worked well for a time, back when work was contained in a physical office building and employee devices were limited. But it proved ineffective once remote work became common. And even before the explosion of connected personal devices—i.e., tablets, smartwatches, and mobile phones—cybersecurity experts were getting worried.

One of the pioneers in solving the interconnected-device problem was John Kindervag, considered one of the world’s foremost cybersecurity experts. In 2009, he coined the term “zero trust model.” Its foundational principle comes from a Russian proverb—”trust but verify”—and it’s proven to be solid advice for many organizations. If you want to ramp up your company’s cybersecurity, be sure to adopt all three components of a zero trust model:

Ensure all resources are accessed securely regardless of location.
Adopt a least-privilege strategy and strictly enforce access control.
Inspect and log all traffic.

Many companies now employ this guilty-until-proven-innocent approach across functions and departments. Most employees encounter the zero trust model whenever they’re asked to engage in multifactor authentication (MFA), which requires users to verify their identity at least twice to gain access to systems. In fact, MFA is one of the simplest ways to safeguard against cybercriminals, and even small to midsized manufacturers can easily implement this protocol.

2. Go Beyond Information Security

A cyber-physical system is a one that integrates sensing, computation, control, and networking between physical objects and infrastructure—connecting objects to the internet and to each other. An example of a cyber-physical system would be driverless cars that communicate securely with each other on smart roads.

The increased connectivity among engineered systems is bringing more risk than just information theft—it also introduces the possibility of harm to humans and the environment. Case in point: AP News reported in 2021 that someone attempted to poison a water treatment plant in Oldmar, Florida. Using a remote-access system, the hacker tried to increase the level of lye in the water supply to a dangerous level. The attempt was fortunately caught by an astute supervisor, and the city has since disabled the remote-access system.

Because of these types of risks, Gartner advises companies to take appropriate precautions, pointing out that CEOs could potentially be held personally liable for cybersecurity incidents. “In operational environments, security and risk management leaders should be more concerned about real world hazards to humans and the environment, rather than information theft,” a Gartner researcher said in 2023.

3. Create an Incident Response Plan

Even the most secure systems face risk. The question is not “if” your company will be targeted but “when.” Therefore, every company should create a thorough incident response plan: a set of written instructions with clear details on what to do in case of a data breach or other cybersecurity incident. And the time to plan is beforehand—not after an attack when every minute is critical to containing the breach. With emergency protocols and backup systems in place, you won’t waste valuable time figuring out the best response or obtaining the necessary permission to act.

Gartner suggests that an incident response plan have four phases:

Preparation
Detection and Analysis
Containment
Eradication and Recovery

Putting a response team in place and creating a plan can seem overwhelming, but it’s important to recognize the journey towards security is an evolution. As Andy Ellis, former CISO at Akamai, has pointed out, “You don’t have to do it all at once.” The focus should be on having a well-thought, actionable plan, and implementing it step by step over months, or even years if that’s what’s required.

4. Provide Employee Education and Training

Imagine pouring millions of dollars into your cybersecurity systems, only to suffer a breach when an employee unknowingly responds to a phishing email. Unfortunately, many employees still associate “phishing” with obvious scams involving foreign princes. But today’s cybercriminals are far more sophisticated, often able to adopt the personas of co-workers to ask what appear to be routine, work-related questions in order to obtain sensitive information.

While you can’t eliminate all risk of user error, proper instruction and training on cybersecurity best practices will go a long way in decreasing your company’s cybersecurity risk. And this training must be repeated on a regular basis. For example, don’t just teach employees how to identify phishing emails; send fake emails on a regular basis to test employee responses. For those who fall victim to the bait, additional training and support should be offered. Other best practices, such as requiring a second type of confirmation for sensitive requests, can also increase security.

5. Choose Your Third-Party Contractors Wisely

No matter how locked-down your own systems are, you’re only as secure as your third-party vendors and contractors—a fact exemplified by the infamous Target breach that affected 41 million consumers. Initially, no one knew how the breach occurred, but it was later discovered the hackers accessed the Target gateway server by stealing credentials from a third-party vendor.

Lesson learned? Be diligent in your screening of third-party contractors. The security of your supply chain is just as important as your internal cybersecurity.

Manufacturers in certain industries must be especially diligent. As cybersecurity company Palo Alto Networks has pointed out, “manufacturers that build national security-related products face additional types of cyber threat actors and thereby additional urgency to protect their sensitive data.” For these manufacturers, it is especially important to do business with reputable third parties that have the proper registrations and compliance programs in place. For instance, a manufacturer of defense technology should verify that its contract manufacturers are ITAR registered and have appropriate internal controls in place to secure sensitive products and all the technical data associated with such products.

Another industry that requires enhanced security is medical device manufacturing, which is why the U.S. government is attempting to increase security in this area. With the passage of The Consolidated Appropriations Act of 2023, the FDA is now required to include cybersecurity as part of its review for medical devices that contain software, such as heart defibrillators and continuous glucose monitors (CGMs).

No matter your industry, it’s not enough for your own data to be strongly encrypted. So don’t just monitor your own systems—protect your supply chain by ensuring that your vendors are doing the same.

Putting Manufacturing Cybersecurity at the Forefront

According to Forbes, the operational technology (OT) and industrial control systems (ICS) of manufacturers have traditionally focused on speed and efficiency, while cybersecurity has taken a back seat. And unfortunately, a lot of manufacturers still rely on legacy systems and outdated practices that are ill-equipped to handle today’s cybersecurity threats. If this describes your business, then now is the time to act in order to avoid becoming another cybersecurity cautionary tale. The five steps outlined above are a good way to start.

A Secure Manufacturing Partner

At PRIDE Industries, we provide the highest levels of security, structure, quality, and expertise. We are ISO 9001 and ISO 13485 certified, ITAR registered, and have SMTPE-certified engineers on staff. Our customers know they can rely on us to keep their proprietary information secure and their supply chain protected.

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It’s no secret that artificial intelligence (AI) and machine learning are infiltrating the way we do business—as well as our personal lives—in multiple ways. Uber uses AI to forecast the number of ride requests for different locations. Social media platforms customize user content by applying AI algorithms. And manufacturers across a variety of industries are using AI to take predictive maintenance to a new level, analyzing historical and real time data to anticipate failures and repair or replace machinery before something breaks. So it’s no surprise that electronics manufacturers have found yet another use for AI: optimizing electronics packaging.

The global market for AI-facilitated packaging is expected to grow at a compound annual growth rate (CAGR) of 55.2 percent from 2021 to 2026, according to Global Market Estimates, a market research and consulting company. This rapid increase in the use of AI to optimize packaging is no surprise, as improved packaging offers many benefits, from better product protection to improved brand positioning.

Because electronic devices tend to be fragile and prone to damage during transit, AI can be especially useful in optimizing their packaging.

Important Considerations in Electronics Packaging

Because electronic devices tend to be fragile and prone to damage during transit, packaging must be optimized for specific products. So how does an electronics manufacturer choose the best packaging? Opting for the cheapest solution doesn’t always save money in the long run. Manufacturers have many factors to balance and questions to consider, including:

How well will the packaging protect the product?
Does stronger packaging justify a heavier weight and higher shipping costs?
Is there an acceptable level of returns for damaged products? If so, what is it?
What is the optimal balance between packaging price and performance?

In addition to the questions above, manufacturers need to think about customer perceptions, as people are becoming more concerned about packaging pollution. In a 2020 survey, McKinsey & Company found that 60 to 70 percent of consumers said they would pay more for sustainable packaging. AI can be used to analyze vast stores of internal and public data to optimize packaging so that it meets electronics manufacturers’ requirements for quality, safety, and sustainability, allowing them to quickly find the right balance between cost and effectiveness.

3 Ways AI is Improving Electronics Packaging

Successful electronics manufacturers are constantly evaluating new technologies and seeking ways to improve production. Across the nation, these savvy manufacturers are leveraging AI and machine learning to optimize their product packaging in three critical areas.

Design

AI can help companies optimize electronics packaging by analyzing data such as product type, weight, and fragility. It can also factor in other considerations such as company sustainability goals and shipping distance. AI can even be used to incorporate packaging considerations into the product design phase, helping engineers configure a product that costs less to ship and is more resilient in transit, resulting in fewer returns.

AI algorithms are now being used to customize packaging for a broad range of products. A TV, for example, may require a box with thicker corners for better edge protection. Other electronics packaging considerations include protection from falls, extreme temperature, vibration, humidity, sunlight, contamination, and water. To minimize vibration, containers sometimes include internal locking mechanisms. And to make product inspection easier, clear locking containers—such as those manufactured by U.S.-based Clamtainer—allow final inspection of a component without disturbing the packaging.

AI can also be used to determine the ideal packaging material for a particular product. This is especially important given the range of new materials available, which are far more diverse than traditional cardboard and polystyrene packing peanuts. Mushroom packaging, for example, is made from an organic material that’s literally grown to a precisely programmed shape using a process that takes just seven days. Other novel materials include bamboo, cornstarch, and seaweed—sustainable substances that win kudos from the general public, enhance a manufacturer’s reputation among consumers, and can even cost less than traditional packaging.

Another way that AI is impacting package design is by using 3D prototypes to speed up the time it takes to determine the optimal packaging for any given product. In the same way that 3D prototyping is used to test product designs, packaging options for the finished product can be tested and quickly modified using AI models and 3D printing technology—without the expense or time of producing the actual electronics packaging.

Sustainability

Optimizing a product’s packaging should be part of any initial product design, especially if sustainability is important to your company—the European Commission estimates that more than 80 percent of all product-related environmental impacts are determined during the design phase. However, leveraging AI for sustainability goes beyond design. It can also help reduce waste, decrease shipment damage, and lower shipping costs. Amazon has been using an AI model that learns from real-world customer complaint data to accomplish these goals. Applying their machine learning model to hundreds of thousands of packages, they have been able to reduce waste, cut shipment damage by 24 percent, and reduce shipping costs by five percent.

AI can also help manufacturers design packaging with recycling in mind. This not only helps companies meet their environmental, social, and governance (ESG) objectives, it’s also becoming an essential objective now that more and more local governments are enacting extended producer responsibility (EPR) regulations. For example, California passed a law in 2022 that imposes new regulations and fees on manufacturers of single-use plastic packaging. Other states—including Maine, Oregon, and Colorado—have also passed strict EPR laws. And while many of these regulations primarily affect the makers of plastic forks, straws, and bags, they are expanding to include packaging for all kinds of products.

Supply Chain Management

AI can also help in supply chain management, from production inspection to shipping improvements, enhancing or even replacing human efforts. Unlike a person, AI never gets bored or distracted—it doesn’t miss product defects. And unlike human brains, which have a tendency to fill in missing data and thus see things that aren’t there, an AI “brain” lacks this imagination, and so more accurately detects a product’s true state.

AI can even improve on the traditional “machine vision” technologies that are used for inspections. Many current visual inspection technologies are capable of spotting variations from a programmed standard, but can’t determine if the variation is acceptable. For example, in the case of date labeling on a package, if a date is in a different font, many current inspection systems will reject it as an error. Harry Norman, founder of OAL, a British automation and robotics company, likens traditional machine vision to having vision without a brain. Incorporating AI into the system gives the machine a “brain,” one that can be trained to account for variation. For example, a date stamp with a tilted “2” that would have been rejected in the past with traditional visual inspection technology can now be recognized as acceptable.

Yet another way AI is strengthening the supply chain is by streamlining the shipping process. Manufacturers now have access to data-driven shipping automation platforms that include packing algorithms. According to ShipHawk, a U.S.-based provider of automated shipping solutions, companies can lower shipping-related costs by more than 20 percent with data-driven shipping. Machine learning algorithms can also be used to assign packages unique RFID tags so that products can be easily tracked throughout the entire supply chain.

Don’t Set It and Forget It

Keep in mind that AI is only as good as those who design, program, and monitor the technology. So be cautious about taking a hands-off approach. But with the right oversight, AI can transform electronics packaging. The technology’s ability to improve design, enable the use of novel materials, and make recycling easier means that manufacturers will undoubtedly continue to use AI to optimize their product packaging for years to come.

Kitting and Fulfillment Services with a Positive Social Impact

PRIDE Industries offers comprehensive packaging and fulfillment services that incorporate sustainability practices tailored to each customer’s needs. Our flexible approach, backed by a dependable and inclusive workforce, gives our customers both reliable service and a unique social marketing advantage.

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October is National Disability Employment Awareness Month and, amid the manufacturing skills gap—there aren’t enough skilled workers in the country—it’s a great opportunity to call attention to one of the most underused talent pools in the country—people with disabilities.

It’s no secret that labor shortages and high turnover rates continue to plague the manufacturing sector, with about 40 percent of employees calling it quits yearly, according to the Bureau of Labor Statistics—44 percent in 2020, 39 percent in 2021, and 40 percent in 2022. Turnover is a drag on productivity and the bottom line, with recruiting, onboarding, and retraining costing from $3,500 to $10,000 per employee.

According to the 2023 Career Advancement in Manufacturing Report, 82 percent of manufacturing companies are experiencing a labor shortage. The numbers don’t lie. Earlier this year, the U.S. Chamber of Commerce reported 693,000 open manufacturing jobs. Even more concerning: A study by Deloitte and the Manufacturing Institute found that the manufacturing “skills gap” could result in 2.1 million unfilled jobs, costing businesses a trillion dollars by 2030.

Diversifying Talent Pipelines to Ease the Manufacturing Skills Gap

Deloitte’s solution? Turn to underrepresented communities.

A landmark Accenture study found that companies that actively include employees with disabilities achieve 28 percent higher revenue, double the net income, and 30 percent greater profit margins than those that don’t.

“It is deeply concerning that at a time when jobs are in such high demand nationwide, the number of vacant entry-level manufacturing positions continues to grow,” said Paul Wellener, Deloitte vice chairman and U.S. industrial products and construction leader. “To attract a new generation of workers, the industry should work together to change the perception of work in manufacturing and expand and diversify its talent pipeline.”

Finding Hidden Labor Pools

When it comes to diversifying its talent pool, InterMotive Vehicle Controls in Auburn, California, is ahead of the game. Co-founders Linda and Greg Schafer were searching for an outsourcing partner to manufacture some of the company’s PCBAs in 2008 when they discovered PRIDE Industries, a contract electronics manufacturer with a mission to create employment for people with disabilities.

“The company’s capabilities blew me away,” Greg said. “The people, the processes, and the technology are state of the art. But what sets the company apart are the people—I’d never seen a manufacturing floor where employees were so happy to be there.”

Fast forward 15 years, and PRIDE Industries now manufactures 46 parts for InterMotive—24 cable assemblies and 18 mid to high-volume PCBAs. Services provided include functional testing of PCBAs, using custom test fixtures designed and built by PRIDE Industries engineers. Testing time has been reduced from about six seconds to 2.5 seconds, and returned boards have all but disappeared.

Retention Benefits

“We have directly hired people with disabilities and outsourced to PRIDE Industries’ teams for going on two decades now,” Linda said. “When you take someone with an intellectual disability or a physical disability, and assess their skills and interests, give them the training and support they need, you’ll be amazed at what they can do and how much they can contribute.”

Hiring people with disabilities helps InterMotive bridge the manufacturing skills gap and increase retention. “I have employees with disabilities who started after high school and are now married and buying homes,” Greg said. “They love their jobs, show up on time every day, and are proud of their work. They really enhance our workforce.”

But the story doesn’t end there. Coincidentally, one of InterMotive’s flagship products is a wheelchair interlock—a mechanism that immobilizes wheelchair-accessible vehicles when the wheelchair ramp deploys. “Some of our employees come to work in vehicles with our products on board,” Linda said, “products they may have helped build.” InterMotive is the largest manufacturer of wheelchair interlocks in North America.

A Vast Labor Pool

More than 10 percent of people aged 16–64 in the United States—22 million people—have a disability. The employment ratio for this population—the percentage who are employed—hovers around 30 percent, while the rate for persons without a disability in the same age group is about 75 percent.

But that’s changing, fast. In recent years, the employment-to-population ratio for people with disabilities has risen to record highs, reaching more than 37 percent, according to the monthly National Trends in Disability Employment (nTIDE) report, published by the Kessler Foundation and the University of New Hampshire.

Still, that leaves about 14 million people available for work.

Proven Benefits

The business benefits of a workforce that includes people with disabilities are proven, if not well known. A landmark Accenture study found that companies that actively include employees with disabilities achieve 28 percent higher revenue, double the net income, and 30 percent greater profit margins than those that don’t.

Research published by the National Institutes of Health found that the economic benefits of hiring people with disabilities include: lower employee turnover, greater long-term retention; increased reliability, punctuality, and productivity; and greater customer loyalty and satisfaction.

Low Risk, High Reward

One of the reasons some employers cite for not including people with disabilities is the added cost of reasonable accommodations that the Americans with Disabilities Act (ADA) requires. That myth is long busted. A survey of 3,528 employers by the Job Accommodation Network (JAN) found that 49.4 percent reported that accommodating employees with disabilities “cost absolutely nothing.” The other employers incurred an average one-time cost of just $300 per employee with a disability.

Meanwhile, the Society for Human Resources Management pegs the average cost of replacing an hourly worker at $1,500 each—far more than the cost of accommodating an employee with disabilities.

Keys to Success

Another reason some companies cite for not recruiting people with disabilities is simply a lack of knowledge about how to work with them. Again, this concern is unfounded, as the folks at InterMotive well know.

Keys to InterMotive’s success with employees with disabilities are consistent assessment, training, development, and feedback—processes the company has invested in for employees of all abilities for decades. “In many ways, these employees are just like any others that walk through our doors,” Linda said. “We identify their skills and interests, find the right role for them, and give them the training and support they need to be successful and find a career path here.”

InterMotive began hiring employees with disabilities long before DEI became trendy. “We aren’t doing this because someone told us we had to,” Greg said. “We’re doing it because it makes us a better business.” And he cautions companies against hiring from underrepresented communities simply to “check a box.” He said it requires investment, but once you make it, “you realize you are more alike than different.”

“They want to work. They want to contribute,” Linda said. “Their joy is a gift.”

Solve Your Manufacturing Skills Gap with PRIDE Industries

PRIDE Industries offers state-of-the-art facilities and a full suite of electronics manufacturing, packaging and fulfillment processing, and supply chain management services. And our inclusive workforce—about 50 percent of our employees have a disclosed disability—means that working with us allows you to make a positive social impact with your business spend, while meeting consumer demand for products made in the USA.

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