SCOTT VOSS USED TO WORK AS director of engineering at a semiconductor plant in the Philippines, where the turnaround time to his U.S. customers was 25 days. That plant fell on hard times, and Voss now is at a smaller operation in Manteca, Calif. "Our customer base is the same, but we're closer to them," says Voss, vice-president of operations at Indy Electronics Inc., where turnaround time averages 10 days.
Many U.S. industries have focused on labor costs and quality control to fight foreign competition. But now some of them have found another weapon, one that favors them: fast turnaround. Speed is becoming a high priority in industries as diverse as semiconductors and apparel.
"The pressure is on," says Robert Clary, a consultant in Los Altos, Calif. "Semiconductor companies are trying to turn around new products much more quickly." That's because the battlefield is shifting from standard to custom chips. U.S. companies have practically surrendered the market of high-volume memory chips to the Japanese. But the fight for the customized chip market, which could soar to $10 billion by 1989, is still raging. Such chips, which are mass-produced and then tailored to specific needs, are used in products from cars to microwave ovens.
Making custom chips requires frequent calls between a manufacturer and customer. They have to be made quickly but with great precision, giving domestic makers an edge. One custom-chip maker, LSI Logic Corp., in Milpitas, Calif., expects sales to jump 60% this year. And Indy, a contract assembler with half its business in custom chips, is profitable despite the industry's slump.
Staying unfashionably stateside can also be profitable in apparel, due to recent changes in the industry. About one-third of all clothes are imported, but some domestic makers are flourishing. The Cherokee Group, of North Hollywood, Calif., is taking advantage of an unpredictable fashion market. "If Cherokee has a hot product that sells off the shelf, there's a much shorter pipeline for reorders," notes Thomas Caraisco, a vice-president at Paine Webber.
Also, sluggish retail sales are breeding conservative buyers. "Buyers are buying in lower volumes," says Pamela Morris, president of Gioia Couture Inc., a domestic knitwear marker. "When an item gets hot, it's not feasible to get fast reorders from overseas."
Some companies are streamlining the 66 weeks it takes for a garment to reach retailers' shelves. "Most garments spend 55 weeks waiting between processes or waiting to be processed," says Peter Harding, manager of textile industry services at Kurt Salmon Associates Inc. "Working smarter has to be the real key to our survival."
PRINT THIS ARTICLE