Standards & Regulations
Strategic vision and decisive execution: The keys to riding mega trends and mitigating major threats
E
arth shattering and surreal are certainly words and terms that reflect the collective experience of the world over the past three months due to the COVID-19 Pandemic. In a span of three months, the Economist Intelligence Unit’s forecast for global GDP growth dropped from 2.3 to -2.5 per cent. The IMF’s forecast has also saw a drastic downward trajectory from a rather optimistic 3.3 to -3 per cent. The coronavirus crisis has significantly affected the world’s economy, dampening demand and consumption and pushing us into possibly one of the worst recessions in recent memory. The COVID-19 Pandemic began in Wuhan at an inopportune time, right before the busy Lunar New Year Holiday. During the holiday, millions of Chinese typically travel and migrant around China and the world to celebrate. On January 23, the Chinese government announced the closure of Wuhan without warning to stem the tide of the coronavirus. Soon other countries in Asia began to see cases and shortly after, China began to expand closures to the rest of China. For the rest of the world, the impact was swift as China is the world’s manufacturing center. The closures blocked the flow of labor and transportation, causing many companies to lack raw materials and keep products in stock. After the Lunar New Year, DFI made initial communications regarding the status of its supply chain and its possible impact on customers, and situation regarding the safeguarding of its employees health and welfare. From the onset of the epidemic, later growing into a pandemic, DFI took steps to protect the health of its nearly 800 employees, including the implementation of travel restrictions,
the strengthening of preventive and hygiene practices, as well as communicating with each plant to gauge the situations there. Thus, without much hesitation, DFI adapted its corporate resources and operations to the meet the needs of the “new normal.” These encompassed improving internal work and communication processes to optimise information and communication transparency. They also included ensuring operational and financial resilience, such as lowering inventories, conserving cash resources, cancelling attendance at tradeshows to ensure employees’ health. DFI also upgraded its IT systems to support remote work operations and permit flexible modes of working according to local circumstances in the United States, Japan, Europe (Netherlands), and China. More importantly, to reduce the risk of relying on a single supply source, DFI had previous, due to the China-US trade war, relocated a sizable portion of its manufacturing capacity to Taiwan and Vietnam. This move has helped DFI better secure its supply chain as it faces the ongoing crisis today. “As a product and solution provider, DFI must ensure that capacity is not a concern for customers, and as a result we have diversified risk by spreading out our supply sources,” says DFI President, Steven Tsai.
Anti-pandemic operations accelerate new business opportunities Recently, DFI has seen a rise in orders for telephone and video systems as well as infrared sensing applications. DFI forecasted that market demand would contract and probably not return to levels seen before the crisis. However, upon the acceleration of the COVID-19 Pandemic,
DFI quickly focused on business segments that would likely thrive in a post-COVID-19 world, including medical (ultrasound and thermal imaging), smart automation, and transportation (in-vehicle solutions). “In the smart automation segment, we are leveraging our expertise to serve IPC customers as we foresee an acceleration in need for automated production lines capable of withstanding human labor-related risks. In addition, the current demand in transportation IPC (Nordic Europe) is still flat. Also, the demand for refrigerated storage vehicles with Wi-Fi, predictive fueling functions, and fatigue driving prediction functions will also continue,” says Tsai.
Apparently, this pandemic will also increase the growth of segments such as 5G, AI, and the Internet of Things, and enterprises in the mist of a digital transformation. The market won’t disappear but will be redistributed. “Now is the time for companies to deepen their future competitiveness in digital transformation. DFI will continually optimize the matrix of customers and suppliers in line with the new structure of its manufacturing capabilities and business development goals,“ said DFI President, Steven Tsai.
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Respond to market changes In the years prior to the COVID-19 Pandemic, most of the world had already been engaged in some form of change due to the trade war between the United States and China. Through a pragmatic management approach, the management team at DFI reached a conclusion that these were not likely temporary events, but rather once-in-a-generation mega trends worthy of our full dedication. For example, the demand for automation equipment may permanently change the proportion of human and machine collaboration in the future.
While the uncertainty is affecting global supply chains and manufacturing, corporations should always prepare for change and remain versatile. This includes improving internal work and communication processes, diversifying supply chains in order to reduce risks, adjust customer and industry profiles, and develop new business models. Thus, DFI completed the deployment of production back to Taiwan. In addition, with support from the Qisda Group, DFI can strengthened the company’s versatility by taking up a small variety of production lines in Vietnam. “Management is responsible for creating a clear vision and executing its vision. Through this, corporations can truly help build a society in which the value to stakeholders is not compromised. Our philosophy for stakeholder wellbeing inspires us to collaborate with the Taiwanese government for the production of surgical masks to help mitigate the COVID-19 contagion. DFI will continue its commitment to all stakeholders and together generate synergies within those megatrends for the wellbeing of the next generations,” concludes Tsai.
dfi.com
Components in Electronics June 2020 23
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