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Alive and kicking!
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23/03/2007
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At present, the electronics manufacturing sector remains challenging, but rather than stand still, many cems are focusing not only on the ways in which they can fight against a backdrop of fierce global competition, but also on the opportunities that emerging markets bring.
And while offshore manufacturing may have polarised opinion on whether the UK is still economically viable, for low volume/high value new product introductions (npi) at least, cems have the opportunity to exploit many niche sectors.
Faced with the decision of when to outsource and where, oems must decide what drives their business and what their core competences are. Unless they have a business model that can sustain a fully fledged in house manufacturing facility and keep this investment up to speed, justifying the cost can be difficult – if not impossible.
Instem Technology Services’ chairman and ceo Kerry Brown begins: “The aim of the oem should be to concentrate on the sales and marketing and conceptual design of the products, leaving the cem to manage the ‘sinusoidal wave of demand’ affecting people, machinery and/or materials. Investment in manufacturing plant is expensive and the oem will find that the utilisation of this equipment can be low. It’s the classic make versus buy decision.”
According to Brown, the optimum time to outsource is at the npi stage and let the cem use their knowledge of manufacturing to ensure that at the design stage ‘product assurance’ and costs are taken into account. As to where to outsource, he says it depends on the technology, the volume and the management levels required to ensure the product is available in the marketplace at the right performance levels.
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Author
Mike Richardson
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