Business Workshop Report 9 
- Telecommunications Products

Connections to the international phone network will exceed 1 billion by 2003 and the mobile phone market is a worldwide growth market. Any manufacturer in this market will only succeed through innovation, high-tech styling and growing the market. The UK market is largely a ‘youth’ oriented market and over 50% of 7 to 24 year olds already has a mobile phone. This is the fastest growing market sector and one that demands high style products with significant value added through decoration and accessory products.

Suppliers to the automotive industry with spare capacity may see this as an easy alternative market. However, the markets are very different and the entry requirements such as investment in new technologies, flexible and extensive capacity and a highly variable demand are difficult to achieve.

In the mobile telephone market a new product has approximately three months to make significant amounts of revenue. After this, revenues decrease significantly due to new product competition. This makes the ‘time to market’ a key factor for success. In the past, products have taken up to 2.5 years to develop but rigorous project management techniques have reduced this development time to 10 months with further improvements to be made.

The key time is not the development time for one product but the total time to the customer in volume quantities. There is a huge difference between the conventional measurements and measurements based entirely on market pressures. To achieve time to customer reductions the supplier and customer must work in a close and collaborative partnership. It is important that gaining new business with technology companies is not seen simply as the responsibility of a salesman. The ‘sales team’ needs to consist of product designers, mould makers, materials specialists and all the other people who can add value to the sales and development process and reduce costs. In fact, the concept of ‘customer’ and ‘supplier’ is becoming outmoded in this environment, it is now a team process and only by working together will either succeed. To be effective the team development process needs free access and communication throughout the team (wherever they are located), particularly between designers, toolmakers and other technical staff. It means that all design offices are opened up to the team. The suppliers and the mobile phone companies must work hand-in-hand to provide tool designers with full information. This means that any concerns in the development process are identified early in the project and dealt with to avoid later concerns with the project.

The mobile phone company purchasing manager acts as a project manager (with absolute control over the development process) and all information and requests for decision-making should be funnelled through the project manager before any action can be taken. This provides clarity of information instead of confusion in the product development process and allows identification of the specific milestones and tollgates to be achieved before a project is allowed to pass to the next stage.

The three key factors in a successful development and sales process in the telecommunications market are cost, quality and capacity and all need to be correct for the project team to succeed.

A barrier to many companies entering the market is the highly variable demand and the fact that it is impossible to accurately predict the demand at the start of a project. Good moulders can build and commission tooling and mould the products but a major concern is the need to commit resources at the start of a project to meet rapid and variable changes in demand. Suppliers must have the capacity for the highest possible demand to avoid problems when products succeed. This means that suppliers must invest in the technology and not outsource to third parties.

After design is completed a single, pre-production tool can be used to produce 20,000 products for approval, after which, a commitment is made to multi-cavity tooling and ramp-up begins. This requires up to 200 cavities to be fully SPC approved and this can be a bottleneck if concerns with tight tolerances and cosmetics are allowed to stack up. This can cause delays if the team is not adequately prepared. The ‘available to ship’ stage must be reached at least 4 weeks before launch and ‘ready to launch’ requires the capacity to meet the peak volumes.

When a new product can sell 35 million items and there are up to 60 control dimensions on an individual product then tooling control is a vital part of the ramp-up process. This a particularly true when a production line stoppage costs thousands of pounds per hour!

This competitive market needs new skills to appeal to technologically sophisticated consumers and to reduce costs. Examples are:

• The desire to personalise phones and appeal to the market has created a need for the use of in-mould labeling.
• Dual hardness moulding applications are growing as designers assume that processors have the capability.
• The need to improve quality and reduce costs has made robotics and automation essential. Anyone can build a mould tool and mould from it - what is needed is optimised automated assembly to meet the demands. This is not simply part removal from the mould but is complete process automation. Manual handling always costs money and gives quality problems. Putting the phone together and adding value is a prime skill needed in suppliers to this market and they must invest in automation for future success in this high volume market. It is accepted that some companies may not be able to make the initial leap to fully automated production and there can be assistance in obtaining and commissioning automated assembly equipment.
• Colour matching in a style conscious market is critical and colour trials need must be on production equipment and at production volumes. Trial samples are neither reliable nor acceptable.
• Recycling of internal material is encouraged for non-visual parts but visual parts need the highest visual quality and the use of virgin material is required.

This Business Workshop Report is based on the results of a PiP Business Workshop held in November 2000. The customer viewpoint at the Workshop was presented by Mr. Jerry Graham, a purchasing manager with many years experience in the telecommunications industry.

December 2000