Mentor's Oren Manor on Automation Business Adjustments



Audio Summary

Oren Manor, director of business development at Mentor, a Siemens Business, shares an update with Barry Matties on the recent COVID-19 outbreak. Manor describes how Mentor's automation business operations have adjusted, including:

  -- All online automation training for customers is free of charge for the next 30 days
  -- Additional virtual support options
  -- More collaboration tools available to interact and troubleshoot customer installations
  -- Plans to accelerate cloud infrastructures

Manor also provides some projections on how manufacturing may need to adjust as the global economies come out of this time.

Manor is the author of The Printed Circuit Assembler’s Guide to… Advanced Manufacturing in the Digital Age. Visit I-007eBooks.com to download these and other free, educational titles.

I-Connect007 continues to deliver original reporting and coverage of the electronics design, electronics manufacturing, and contract manufacturing industries, including up-to-date information from the companies, associations, and supply chains globally. Find the latest news and information at www.iconnect007.com, and on our new topic bulletin board, “Industry Leaders Speak Out: Responses to COVID-19 outbreak.”

Transcribed audio:

Barry Matties: Welcome. Today, I'm speaking with Oren Manor. He’s the director of business development for Mentor Siemens business. Oren, why don’t you start by telling us how this virus outbreak has changed your business.

Oren Manor: Sure. Thank you for having me. Obviously, this is having a significant impact on the Mentor and Siemens business. This, of course, will probably have an effect for many years to come. We are probably only at the beginning of this change, and this will create a revolution in a lot of different aspects of our life, and one of them is also how people deploy software around factories and how they design them and implement them. We can’t just change all the business models in one day, so that does have a limit. But what we have done, first of all, is to offer all of our online training free of charge. We understand that we cannot go on-site to train customers.

And since we are, we work physically with our manufacturers, and we typically do a lot of training face to face and on-site. And people like that, the training comes in five days, he builds the relationship. Of course, this is completely impossible now. And that’s why we’ve really taken a lot of our online training, which we sell as a subscription and we’re giving it at the moment 30 days free of charge for all of our customers. If they have any questions, they can get it there. If they were planning training, they could get it there. And also if the capacity has gone down a little bit and maybe they’re breathing now and to have some spare time they can get online and get better at using our product. And we’re also giving much more virtual support. So obviously we can’t send our application engineers and support engineers on-site either.

We’re doing much more virtual support, and we’re using different kinds of collaboration tools to try and get a common language with our customers. Because, traditionally, you would go in the shop there, and you would say, “Okay, this machine is causing the problem.” Now, we can’t do that. But we can create some simulation of the factory and use that as we do with that. And we’ve been developing products for the cloud. Everybody is; it’s not a big secret. I think this is a big sign that we have to accelerate, right? If we had many more cloud platforms, we could easily support our customers now with installations, with upgrades, with modifications. The fact that a lot of this software is installed on-premise, on traditional servers and runs in factories, when these things happen, it’s very challenging. I think this is going to cause us to invest even more in the very short future in bringing more and more tools to the cloud.

Matties: What message would you like to share with the customer of the industry right now?

Manor: Well, we’ve been talking to our customers, and there’s a mix. Our customers in China always seem to be ahead of the curve, they’re up and running. And they’re up and running at about 80–90% capacity. We’ve been closing deals in the last couple of days in China even, which is completely extraordinary. There, the message is, “We’re with you. We’ll support you remotely, and we can’t come to it now, but we’ll give you all the support as you ramp up production, and you start getting everything and going, and we’re going to be helping you.” Some of our other customers in Germany and Italy have been much more hit by this and are down to 20–30% capacity or even closed for a week or two.

Our message is, “Stay safe, and Siemens as being a big company probably has the capacity to withstand this kind of a crisis. We’ll be there for you, we’ll work with you, and we’ll help you.” And then we have the mixed customers where production is down to let’s say 50%, and they’re up from 10 lines to five lines. They have fewer people in the factory and everybody who can work remotely, they do bring the essential people in and then we’re supporting them. I imagine we’re going to see a big decrease in the number of new product introductions once this is over because none of us are going to run now and buy a new iPhone, right? Or none of us are going to go and change our smart television once this is over because we all understand that you know there is economic uncertainty. So consumers are going to probably stay a little bit behind and also companies are going to probably ramp up production of existing designs, but I don’t see a lot of NPI. But because of all of the impacts of this virus on the supply chain, we are expecting a significant shortage of components.

So, that means that if I was making my device using some capacitors, I might not be able to get them anymore, and the capacitors available might be very similar but not identical. So I expect an increase in product revision. I expect customers are going to have to do the fine tweaking and are going to have to put a lot of effort into strategic sourcing to get enough components and have to probably mix multiple suppliers and vendors in order to get to the volume that they want. This means changes in engineering and bringing these revisions to production, making the tweaks and the different program, and if you want to stay with the same level of quality, that does require some effort. And we have the engineering tools; we have specific wizards that were being developed for this type of new product revision to make it very smooth and not have to create the full NPI cycle because you’ve just switched a couple of components and might have made a couple of changes in order to accommodate that.

I also believe we’re going to see our customers have to go for higher mix because again, if I was going to make 10,000 of these products, but I simply can’t get the components, then I’m going to have to make a batch of 2,000 or 5,000, and I’ll make a batch today and a batch in 10 days when I do get the components. Even our customers in the industry, which has been more on the high-mix, low-volume, high-mix, mid-volume are probably going to have to go into, and they’re going to have to go into lower volumes, and more mix, which means again changeovers and that is always a hard transition for anybody to go from low-mix, high-volume to do a production with more changes. And if you want to keep the process intact and you want to make sure that the quality isn’t impacted, you have to deploy smart manufacturing solution, stuff around Industry 4.0 so we’re going to work with our customers who want to do that to do more digitalization of the shop floor, and we’ll probably have an opportunity to engage with additional customers who until today didn’t really have the need and who would work with us.

It’s probably not going to be an issue about capacity. I don’t see capacity as such a big impact that for the first time as we come out of these lockdowns, but it’s going to be an issue of how you’re more agile, you can mix production and stuff like that. I think this type of epidemic has shown us that you have to be agile, and you have to be able to move production around because just as China was going into lockdown, you wanted to move all the production away, maybe initially to Southeast Asia. Then as the coronavirus approached Malaysia, Thailand, you probably wanted to move it to Europe. Now, suddenly, you can’t really manufacture in Western Europe, so you want to move it quickly back to China. But we know that even if you tried to, production environments are never identical.

And so you need digitalization tools which allow you to quickly move these products between the factories. I mean, I think our customers in the industry have to understand that these types of things can happen. And if you have five factories globally, you can probably continue capacity quite well if you have the ability to move the products between the different factories in a very efficient way. If you don’t have to repeat the NPI cycle, then you don’t need to contact personally the different people because they might not be available for the first couple of days as they’re migrating from working in the office to working at home and stocking up on supplies, and stuff like that. I think we all have to understand that we need to deploy these types of digitalization solutions because we need to be more agile and be able to move the production globally as these things kind of transition through the different countries and different continents.

Matties: Oren, we certainly appreciate your insight and your time today, and we’ll look forward to some future updates. Thank you very much for spending your time with us today.

Manor: Thank you.

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