How to keep your consumer electronics profitable and competitive

There are nearly 4,000 consumer electronics manufacturers globally, and that figure has grown yearly since 2013, except for 2020. As the number of competitors increases, it’s critical to become as cost-efficient and customer focused as possible. Here, Emily Newton an industrial journalist, looks at some steps to keep your consumer electronics profitable and competitive.

Target a specific niche

One of the most critical strategies to succeed in a crowded market is to target a specific niche. Offering more generalised products will give you a larger potential audience, but it also means you have more competitors to stand out against. A particular focus may narrow your audience but make them more likely to buy your products.

Target a niche by defining your skills and experience. What does your company have that no other manufacturer can match? Compare this to consumers’ underserved needs and neglected but easily segmented markets to find your ideal target audience.

You can also target a niche by focusing on a specific value or ethical statement. Consumers seeking products that align with their values account for 44% of all buyers today, making them the largest segment.

Research competitors’ prices before manufacturing

Pricing presents another opportunity to stand out in an increasingly competitive market. Naturally, more affordable electronics will appeal to consumers over less accessible options, but you also want to avoid selling at a loss. You can balance these needs by researching competitor prices before starting the consumer electronics manufacturing process.

Most of a manufacturer’s savings opportunities come from internal processes like materials, workflows, and workforce requirements. It’s far easier to form these around a specific price goal than to adjust manufacturing later to reduce end prices.

See what manufacturers of similar products sell their items for, then analyse material sources and manufacturing methods to determine how to cut costs and offer lower prices. Data analytics engines and design software will make this analysis easier and more effective.

Use efficient manufacturing processes

After this price analysis and market research, you can boost profitability by minimising operating costs. One of the best ways to do that is by using more efficient manufacturing processes to reduce lead times and energy consumption.

Consumer electronics manufacturing doesn’t involve as much heavy equipment as other production segments, but there are still opportunities to boost efficiency. According to an article from Quincy Compressors, air compressors offer high energy conversion efficiency and are an ideal way to power robotic arms or PCB cleaners without significant power consumption. You may also be able to consolidate steps in the production line to minimise movement, shortening lead times.

Internet of Things (IoT) systems can monitor and reduce energy consumption in HVAC systems and other facility operations. These savings may seem minimal by themselves but add up over time, letting you sell electronics at a lower price and still be profitable.

Employ machine learning to find inefficiencies

Consider using machine learning to help find more efficient manufacturing processes. ML models can analyse your workflows to highlight inefficiencies, showing you how to improve and reduce operating expenses.

One of the most straightforward ways to approach this is through throughput yield (YPT) analysis. These equations divide your production throughput by your starting resources, highlighting your scrap and rework figures. Applying machine learning to this process reveals the causes of that waste, informing effective changes.

Digital twins offer a more in-depth analysis. These virtual recreations of your facility and workflows can run simulations to see where errors arise and what theoretical changes yield the best improvements. This insight can help you maximise efficiency with minimal trial and error.

Implement predictive maintenance

Predictive maintenance is another important technology for improving consumer electronics manufacturing. This approach uses IoT sensors to monitor equipment health and alert you when it needs repair. Basing your maintenance schedules on these precision tools lets you minimise downtime and repair costs, enabling higher profit margins.

More than half of all businesses run machines to failure, but this creates significant downtime and high repair costs. Preventive maintenance avoids these costly breakdowns but can lead to unnecessary downtime from unneeded repairs. Predictive maintenance improves both by simultaneously avoiding breakdowns and ensuring machines only get the necessary repairs.

Address common supply chain issues

Another way to keep your consumer electronics profitable and competitive is to revisit your supply chain. Supply chain woes have affected virtually every manufacturer. Working past common issues helps you become more resilient and impress consumers when your competitors struggle.

Improving supply chain visibility through IoT tracking and continuous communication with suppliers and 3PLs is an important step. This transparency will help you see and adjust to incoming disruptions faster. It will also avoid unknowingly contributing to ethically dubious processes and sources, the fallout from which wiped half a trillion dollars from US companies’ value between 2015 and 2019 according to an article in MIT Sloan Management Review.

Another issue to address is single dependencies. If you have multiple suppliers and logistics partners, an unforeseen disruption like a factory shutdown won’t impact your supply as heavily. That can help you avoid shortages and delays that affect competitors, letting you appeal to their dissatisfied customers.

Stay on top of consumer trends

Bolster your consumer electronics manufacturing by staying up to date on market trends. Today’s consumer markets shift dramatically, especially in fields as fast-moving as electronics, so predicting and responding to these changes is essential to boosting sales and minimising losses.

Use machine learning models to analyse past demand cycles to more accurately predict future ones. Similarly, you can use sentiment analysis tools to monitor how consumers’ attitudes toward certain products or business practices shift. Understanding these movements enables you to respond faster and more effectively to meet shifting expectations.

Consumer electronics manufacturing is a competitive field

Consumer electronics manufacturing will become increasingly competitive as the home electronics industry grows. Succeeding in this crowded market means minimising operating expenses while maximising your understanding and responsiveness to consumer demands.

These steps will help you adapt to changing needs and take more control over your manufacturing processes. You can then stand out in the consumer electronics field to remain profitable and competitive.

Emily Newton is an industrial journalist with over six years of experience writing technical articles for the manufacturing, engineering, and electronics sectors.