Garmin 2009 Annual Report Download - page 38

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nüvifoneproducts,whicharemanufacturedbyoneormorethirdpartiesaspartoftheGarmin‐Asusstrategic
alliance,andouraccessoryproducts,whicharealsomanufacturedbyoneormorethirdparties:
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Reducedtime‐to‐market.Utilizingconcurrentengineeringtechniques,Garmin’sproductsareintroduced
toproductionatanearlydevelopmentstageandthefeedbackprovidedbymanufacturingisincorporatedintothe
designbeforemassproductionbegins.Inthismanner,Garminattemptstoreducethetimerequiredtomovea
productfromitsdesignphasetomassproductiondeliveries,withimprovedqualityandyields.
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Designandprocessoptimization.Garminusesitsmanufacturingresourcestorapidlyprototypedesign
concepts,productsandprocessesinordertoachievehigherefficiency,lowercostandbettervalueforcustomers.
Garmin’sabilitytofullyexploreproductdesignandmanufacturingprocessconceptshasenabledittooptimizeits
designstominimizesizeandweightinGPSdevicesthatarefunctional,waterproof,andrugged.
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Logisticalagility.OperatingitsownmanufacturingfacilitieshelpsGarminminimizeproblems,suchas
componentshortagesandlongcomponentleadtimeswhicharecommonintheelectronicsindustry.Many
productscanbere‐engineeredtobypasscomponentshortagesorreducecostandthenewdesignscanbe
deliveredtomarketquickly.Garminreactsrapidlytochangesinmarketdemandbystrivingtomaintainasafety
stockoflong‐leadcomponentsandbyreschedulingcomponentsfromoneproductlinetoanother.
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Garmin’sdesign,manufacturing,distribution,andservicingprocessesinourUS,Taiwan,andUKfacilities
arecertifiedtoISO9001,aninternationalqualitystandarddevelopedbytheInternationalOrganizationfor
Standardization.Garmin’sTaiwanmanufacturingfacilitieshavealsoachievedTS16949certification,aquality
standardforautomotivesuppliers.Inaddition,Garmin’saviationoperationshaveachievedcertificationto
AS9100,thequalitystandardfortheaviationindustry.
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Garmin(Europe)LtdandGarminCorporationhavealsoachievedcertificationoftheirenvironmental
managementsystemstotheISO14001standard.ThiscertificationrecognizesthatGarmin’sUKandTaiwan
subsidiarieshavesystemsandprocessesinplacetominimizeorpreventharmfuleffectsontheenvironmentand
tostrivecontinuallytoimproveitsenvironmentalperformance.
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Materials
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AlthoughmostcomponentsessentialtotheCompany’sbusinessaregenerallyavailablefrommultiple
sources,Certainkeycomponentsincludingbutnotlimitedtomicroprocessors,certainliquidcrystaldisplays
(“LCDs”),andcertainapplication‐specificintegratedcircuits(“ASICs”)arecurrentlyobtainedbytheCompanyfrom
singleorlimitedsources,whichsubjectstheCompanytosupplyandpricingrisks.Manyoftheseandotherkey
componentsthatareavailablefrommultiplesourcesincludingbutnotlimitedtoNANDflashmemory,dynamic
randomaccessmemory(“DRAM”),GPSchipsetsandcertainLCDs,aresubjectattimestoindustry‐wideshortages
andcommoditypricingfluctuations.
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TheCompanyandotherparticipantsinthepersonalcomputer,mobilecommunicationandconsumer
electronicsindustriesalsocompeteforvariouscomponentswithotherindustriesthathaveexperiencedincreased
demandfortheirproducts.Inaddition,theCompanyusessomecustomcomponentsthatarenotcommontothe
restofthepersonalcomputer,mobilecommunicationandconsumerelectronicsindustries,andnewproducts
introducedbytheCompanyoftenutilizecustomcomponentsavailablefromonlyonesourceuntiltheCompany
hasevaluatedwhetherthereisaneedfor,andsubsequentlyqualifies,additionalsuppliers.Whenacomponentor
productusesnewtechnologies,initialcapacityconstraintsmayexistuntilthesuppliers’yieldshavematuredor
manufacturingcapacityhasincreased.IftheCompany’ssupplyofakeysingle‐sourcedcomponentforanewor
existingproductweredelayedorconstrained,ifsuchcomponentswereavailableonlyatsignificantlyhigherprices,