-
- 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
Does My Outsourcing Project Fit with the EMS Provider's Strategy?
September 14, 2017 | Neil Sharp, JJS ManufacturingEstimated reading time: 5 minutes
Once a decision has been made to outsource your electronics manufacturing, the next step is to find a suitable partner. As an original equipment manufacturer (OEM) there’s certainly a lot of choice; according to the latest Reed Electronics Research report, there are around 250 electronics manufacturing services (EMS) providers operating in the UK.
So, finding an EMS partner for your outsourcing project should be easy, right? Not necessarily. Much depends on what you are hoping to achieve from your outsourcing project and whether these expectations match with the EMS provider's strategy.
In this article, we highlight some of the questions, checks and balances a good EMS company will carry out before deciding to quote or partner with an OEM. Hopefully, by providing this insight, you will be better placed to find the right supplier for your outsourcing project.
Start with Why
One of the first questions an EMS provider will try and answer when you make contact is why. Why have you sent this enquiry to them and why now? These may seem like strange questions to ask but unless they are overstaffed or desperate for work (both of which should probably ring alarm bells), the EMS provider will want to make sure they direct their quote resource in the right areas.
So, let’s look at the why. Have you made contact with the supplier following months of detailed research? Have they been on your shortlist of potential suppliers and you have now satisfied yourself that they have the capabilities you are looking for? Or have you sent the same enquiry out to the first twenty suppliers you found and whoever submits the cheapest price will win the business?
How much of your supply chain, manufacturing and test operation are you planning to outsource? Which elements will you retain and why? What does outsourcing ‘success’ look like to you? Is it so you can focus more on product design, sales and marketing? Or are you looking to consolidate vendors, improve on-time in full deliveries and product quality? Perhaps you have outgrown your existing premises and don’t want to invest in new buildings, equipment or staff?
Whatever the reason, a good EMS provider will want to understand where they sit in your outsourcing strategy, the timescales involved and how you came to find them.
Money in the Bank
A key thing for OEMs to check when researching potential EMS providers is financial stability. If you’re about to hand over part, or all of your supply chain, manufacturing and test operation you want reassurance they can finance your project. And the same rules apply to EMS providers when potential new clients approach them.
Before committing to any partnership, the EMS provider will run credit checks on your company when an enquiry lands. If they spot any anomalies in your accounts, don’t be surprised if they probe you a little further before committing to starting work on your project.
High or Low?
The majority of UK EMS companies are set up to manufacture in low to medium volumes; although a few have access to low cost region facilities and can offer higher production runs. A quick scan of the EMS provider’s ‘About us’ page should tell you where their ‘sweet spot’ lies and whether or not they have the capacity and experience to manage the volumes you are looking for.
Some EMS companies are set up to support prototype quantities and will be very happy to produce small quantities while you establish the product on the market. However, once your product takes off they might struggle with the production volumes and fail to meet your new expectations.
Other suppliers might prefer to get involved with an OEM once the design is a little more stable and the prototypes have been proved out in the market. That’s not to say they won’t be able to help in the early stages, offering Design for Manufacture (DfM) support for example, but will have set their organization up to consistently deliver quality product on a monthly basis.
When contact is first made, the EMS provider will want to understand how established your product is and an indication of the volumes you are planning to sell, both now and in the future.
Market Match?
On receipt of your enquiry, the EMS provider will check what market sector you sell into. The majority of EMS companies advertise on their websites the sectors they have experience supplying into. Some focus on a relatively small number, others cast their nets far and wide.
Our advice to OEMs has always been to partner with an EMS provider that can demonstrate to you they have working knowledge and experience in the same market sectors as you. That’s not to say EMS companies that don’t have existing customers in a particular area can’t help, it’s just that the ‘fit’ might not be quite as good.
It’s Not You, It’s Me
Sometimes, relationships don’t work out. It’s no one’s fault, it just wasn’t meant to be. And it’s often better to find this out early on before either party commits time and effort trying to get things moving. Outsourcing is no different. Although you may think you have found the perfect EMS provider, your business or long terms goals may not fit with what they are looking for.
The best EMS providers will be clear with you upfront. They will explain why they don’t feel your outsourcing project is right for them. If they can’t see how they can add real value to your business, it doesn’t make much sense to continue things further. Although this might not be the response you were originally hoping for, you now have the opportunity to move forward and find someone else that can help.
Hopefully, this insight into some of the questions, checks and balances good EMS providers carry out has been useful. In such a competitive environment, it’s hard for any EMS provider to turn away business. But business is business, just that, and turning down an outsourcing project is never personal. And of course, as with any relationship, things change over time. That one company that originally declined to bid because they couldn’t add value to your business might be exactly what you now need to take things to the next level.
Good luck in finding that perfect partner. There are plenty of assembly providers out there, so hopefully it won’t take you too long to find one.
This article originally appeared on the JJS Manufacturing blog, which can be found here.
Suggested Items
Record Numbers of Exhibitors to Showcase Products and Services at EWPTE 2024
04/25/2024 | IPCWHMA/IPC announces that 215 exhibitors spanning over 50,000 nsf of exhibit space will introduce new product technologies, innovations and demonstrations of the electrical wire harness, wire, coil winding and cable processing industries’ newest advancements at Electrical Wire Processing Technology Expo (EWPTE) to be held at Baird Center May 14-16, 2024, in Milwaukee, Wis. This marks the largest number of exhibiting companies in the event’s history. More than 3,000 attendees are expected to attend this year’s event.
Orbex Secures £16.7m Investment for Rocket ‘Ramp Up’ Period
04/24/2024 | OrbexThe UK spaceflight company Orbex has received £16.7m from six backers in an update to its Series C funding round.
Robin Hayes Selected to Lead Airbus in North America
04/23/2024 | AirbusAirbus SE has announced that C. Jeffrey Knittel is retiring as Chairman and Chief Executive Officer of Airbus Americas, Inc. effective June 3, 2024, after serving as the region’s top executive since 2018. He will remain with Airbus through a transition period. Robin Hayes, former CEO of JetBlue Airways, has been selected to succeed him.
Zentech’s Board of Directors Announces the Return of Matt Turpin as President and CEO
04/22/2024 | Zentech ManufacturingTurpin draws upon over 35 years of experience in the electronics industry and has an 18-year history with Zentech. He previously served as President and CEO from 2006 to 2019 after which time he has remained active in the EMS industry as an advisor to Zentech and other industry organizations.
Altair Acquires Cambridge Semantics, Powering Next-Generation Enterprise Data Fabrics and Generative AI
04/22/2024 | AltairAltair a global leader in computational intelligence, acquired Cambridge Semantics, a modern data fabric provider and creator of one of the industry’s leading analytical graph databases.