Wednesday, February 11, 2015

The Future of Electronics Manufacturing for OEM’s and CM’s


The electronics manufacturing industry is undergoing some dramatic changes. Intense pricing pressures, pipeline challenges, increasing global competition and the constant need for even faster response times are all reshaping the decision making process for many Original Equipment Manufacturers (OEMs). Contract Manufacturers (CMs) will need to transform to keep up, and those that differentiate their service offerings and capabilities will retain customers and grow their business. As Glen Wayne, our CEO points out, “This is a highly competitive marketplace and CMs that adapt quickly will position themselves as market leaders.”

So what will technologies and process  look like in the future in the electronics contract manufacturing industry? The future technologies and processes will no doubt effect OEMs as well as their CM partners. Here are some interesting findings.
          • Smart CMs will play a proactive role in OEM forecasting by offering advanced tools for monitoring the Bill of Materials (BOM). Product life cycle monitoring, end of life alerts and lead-time monitoring is critical and can dramatically improve production lead-times. This high visibility view of raw materials can also help keep production running while protecting against expensive emergency redesigns
          • OEMs are outsourcing some of the engineering to their contract manufacturers to drive cost savings while improving quality. CMs that understand component level pricing from one brand to another can have a dramatic impact on production costs. Factor these savings over the life cycle of the product and it can dramatically help OEMs maintain a competitive advantage in their market place.
          • Smaller, more economically designed assembly machines such as pick-and-place machines that are automated with built-in flow solder systems offer lower costs than current more expensive machines. Look at this sample of the mini P&P machine of the not too distant future.
          • Compliance Challenges like ROHS, REACH, ITAR, and Conflict Minerals will most likely continue to develop. Helping OEMs to navigate these ever changing regulatory concerns has now become a permanent part of a contract manufactures service offerings.
          • Attending trade shows like Amcon (www.amconshows.com) can offer valuable input on a wide range of manufacturing topics.
          • Off-shoring has changed toward re-shoring, shifting manufacturing services back in favor of United States manufacturers and suppliers. In the past few years there has been a resurgence in US manufacturing with companies returning production to North America. Increasing overseas wages, quality concerns, and increased freight costs are all turning outsourcing back toward American manufacturers.
          • Supply chain technology investment will involve modernizing existing systems, while also trying new approaches.
          • Information Technology (IT) investments will continue to become a higher share of the overall technology investment portfolio.
    It’s a little unnerving to read about the things you know you will need to do to keep up, but it beats the alternative of getting left behind in this ever-changing game.
    We know there is a lot more information out there on this subject that we have not yet uncovered so share your tech knowledge and personal experiences by commenting below. Your opinions and ideas matter and can help us all stay informed.
    Have you attended a trade show recently?  Let us know which trade shows are valuable by commenting.

    Bart Sloan
    GSM, NAS Electronics Manufacturing

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