-
- News
- Books
Featured Books
- smt007 Magazine
Latest Issues
Current IssueBox Build
One trend is to add box build and final assembly to your product offering. In this issue, we explore the opportunities and risks of adding system assembly to your service portfolio.
IPC APEX EXPO 2024 Pre-show
This month’s issue devotes its pages to a comprehensive preview of the IPC APEX EXPO 2024 event. Whether your role is technical or business, if you're new-to-the-industry or seasoned veteran, you'll find value throughout this program.
Boost Your Sales
Every part of your business can be evaluated as a process, including your sales funnel. Optimizing your selling process requires a coordinated effort between marketing and sales. In this issue, industry experts in marketing and sales offer their best advice on how to boost your sales efforts.
- Articles
- Columns
Search Console
- Links
- Events
||| MENU - smt007 Magazine
An Alternative Approach to Vertical Integration in Manufacturing
July 13, 2017 | Richard Kelly, MC AssemblyEstimated reading time: 5 minutes
Figure 2: High complexity wire harnesses from MC integrated partners being staged for next step assembly.
The expansive EMS corporate campuses we see in China today are the hyper-outgrowth of this vertical integration. In cities such as Shenzhen, vast industrial areas, walled-off and secured from the public eye dominate the landscape. Supporting employee populations larger than most cities in the United States, these manufacturing entities are the apex of vertical integration in the EMS world.
Figure 3: Fan assembly being integrated in enclosure from MC integrated partner.
Despite the bad press received over the poor working conditions of these mega-factories, the manufacturing model seems to be working particularly for high-volume consumer products where the repetitive manufacturing nature of the product and the ability to dedicate capital machinery to single product minimizes set up costs long term. Plus, the ability to stack margins on the multiple layers of the product bill-of-materials (BOM) enhances the overall profitability of the company and is less transparent to the end customer.
Figure 4: Enclosures and harnesses in queue at MC waiting final integration.
Vertical Integration in Low-Volume EMS
When you apply the same model to lower-volume manufacturing, directionally the results become much more problematic. The profitability equation for any capital-intensive manufacturing machinery is utilization and set-up minimization.
Figure 5: Supermarket at MC with enclosures waiting for pull by final assembly.
As EMS companies brought in vertical integration, the need to optimize the utilization of their newly gained machinery often outweighed the needs to support the required service level of the customer. Obviously, the practice of meeting customer’s needs unprofitably is a solution that is doomed for long- term failure for a business. Adding to this is the often-heard statement within these vertically integrated EMS companies: "My internal manufacturing teams that feed me components are my worst suppliers. You would think I have greater leverage since we wear the same badge but in reality, they are more driven by their own P&L and since I am a captive customer, they know I cannot fire them."
Page 2 of 3
Suggested Items
Real Time with… IPC APEX EXPO 2024: Tools, Training, and Trends in Manufacturing Engineering
04/25/2024 | Real Time with...IPC APEX EXPOGuest Editor Kelly Dack and Product Specialist Erik Bateham of Polar Instruments discuss Polar's latest technology, including their role in aiding manufacturing engineers. They highlight the advanced capabilities of Polar's tools and the critical role of signal integrity analysis, as well as the importance of accurate modeling in board manufacturing. Polar's unique training approach and demonstration contact details are also explored.
TTM Celebrates the Grand Opening of Its First Manufacturing Facility in Penang
04/25/2024 | TTM Technologies, Inc.TTM Technologies, Inc., a leading global manufacturer of technology solutions including mission systems, radio frequency (RF) components and RF microwave/microelectronic assemblies, and quick-turn and technologically advanced printed circuit boards (PCBs), officially opened its first manufacturing plant in Penang, Malaysia with an investment of USD200 million (approximately RM958 million).
Listen Up! The Intricacies of PCB Drilling Detailed in New Podcast Episode
04/25/2024 | I-Connect007In episode 5 of the podcast series, On the Line With: Designing for Reality, Nolan Johnson and Matt Stevenson continue down the manufacturing process, this time focusing on the post-lamination drilling process for PCBs. Matt and Nolan delve into the intricacies of the PCB drilling process, highlighting the importance of hole quality, drill parameters, and design optimization to ensure smooth manufacturing. The conversation covers topics such as drill bit sizes, aspect ratios, vias, challenges in drilling, and ways to enhance efficiency in the drilling department.
Elevating PCB Design Engineering With IPC Programs
04/24/2024 | Cory Blaylock, IPCIn a monumental stride for the electronics manufacturing industry, IPC has successfully championed the recognition of the PCB Design Engineer as an official occupation by the U.S. Department of Labor (DOL). This pivotal achievement not only underscores the critical role of PCB design engineers within the technology landscape, but also marks the beginning of a transformative journey toward nurturing a robust, skilled workforce ready to propel our industry into the future.
Fujitsu, METRON Collaborate to Drive ESG Success
04/24/2024 | JCN NewswireFujitsu Limited and METRON SAS, a French cleantech company specializing in energy management solutions for industrial decarbonization, today announced a strategic initiative to contribute to the realization of carbon neutrality in the manufacturing industry.