Manufacturing companies within the Irish electronics sector believe they must adapt to change within the industry and establish an advantage over their global counterparts.
Manufacturers here also feel vulnerable to forces outside their control, according to the findings of a survey of 180 of the 400 electronics and engineering companies currently operating in Ireland and employing more than 70 people.
The findings formed the basis of the agenda of a forum in Dublin yesterday which was attended by more than 150 senior executives from Ireland's electronics and engineering companies. Among them were representatives from multinationals including 3Com, Motorola, Intel and Dell.
A series of strategy workshops was convened to consider how to build a long-term manufacturing strategy in the industry in Ireland against a background of fundamental change. The traditional standalone company conducting its entire manufacturing process is transforming into a logistical operation which outsources and synchronises its functions with partners.
This trend enables large manufacturers to relocate practically overnight by establishing relationships with outside suppliers in other markets and, according to the survey is leaving Irish manufacturers feeling vulnerable to forces outside their control. Previously, only the companies with low-value assembly operations were affected, but increasingly the more capital-intensive companies are exposed. Bigger Irish operations have started addressing this chink in their armour by developing, or excelling in, key areas.
According to Mr Donal Connell, vice-president of 3Com Technologies, which employs 1,300 people in Dublin, subsidiaries should pick on certain segments of the international business and concentrate on excelling in that area.
"Take specific manufacturing or distribution processes and focus on being world class in that area. By establishing a centre of excellence within their corporation, companies establish a position of strength." Mr Connell says there are key areas of manufacturing activity which can be finely honed to make subsidiaries more indispensable.
A close working relationship between design and manufacturing engineers helps produce new products already tailored to fit the manufacturing processes this cuts out sizeable product implementation costs.
3Com Technologies benchmarks itself against other 3Com subsidiaries and external subcontracting companies by aiming to always be at least 8 per cent more competitive on a cost basis.
Sixty per cent of the companies surveyed reported that finding and retaining staff was presenting difficulties which impeded the development of key areas. This is frustrating their efforts to win new responsibilities, particular in the area of product design and R&D.
Hewlett-Packard has moved to address this by conducting computer training programmes with Tallaght RTC, and funding third-level courses for staff.
According to Ms Una Halligan, public affairs manager with Hewlett-Packard, where a product or manufacturing line isn't doing well the company won't close down, but a new line will be introduced instead.
"The entire industry is changing, and companies are no longer doing start-to-finish manufacturing. We believe success lies in sticking with core competencies, and for us that is the high-technology sector. We need a high-technology, high-skills market, and that is not available in the Asia-Pacific region," she says.
The survey was carried out by the International Business Development Group which hosted yesterday's industry forum.
