How Contract Electronics Manufacturing might look in the future

contract-electronics-manufacturingAs I drove home from a weekend away, my wife and I were discussing how we needed some new dining chairs. During the next 50 miles she was able to choose from a selection of over 100 styles on her iPad, order the ones she liked and pay for them. A couple of minutes later she got a text message confirming the tracking number and the name of the delivery driver.

Twenty years ago a lady with a catalogue would come round to your house once a week, take your order and then deliver the goods two weeks later – at least half of which you would send back because they looked nothing like the picture in the catalogue!

Whilst companies like Amazon have blazed the trail for consumer buying changes, the business-to-business world has seen similarly dramatic patterns. Twenty years ago the fax replaced the telex, only to be superseded by email accelerating the time from enquiry to order. The internet has given more open access to costs forcing transparency on commercial transactions. And seemingly ‘innocuous’ features like Street View in Google Earth have made it easier than ever for buyers to find out that, despite the impressive website, ‘Global Electronics Inc.’ is actually based in a flat above a Chinese takeaway in Dartford.

In Contract Electronics Manufacturing (CEM) all these things apply. The standardisation of information and electronic transmission means we can now send enquiries to make almost anything, almost anywhere. The uniform use of the US dollar and the Euro make price comparison and currency risk easier to manage. Automated assembly and test along with industry-wide quality standards make quality more predictable whilst the wider use of air transport has made delivery much faster.

Can we expect a similar pace of progress in the world of electronics manufacturing services (EMS) in the future, and if so, what might that progress look like?

Here are some of my predictions and best guesses:

  1. The need for a Request for Quote (RFQ) will become obsolete. Instead Bill of Materials (BOMs) and build packs will be automatically loaded by the Original Equipment Manufacturer (OEM) into the EMS company’s quote programme. This will also allow new designs to be costed instantly by the OEM using the pre-agreed costing model.

  2. Traditional purchase orders will disappear. Agile EMS suppliers working to complex supply agreements will anticipate demand based on real time access to forecasts and demand from their customers, and build goods accordingly.

  3. Engineering updates and change requests will be communicated directly via web portals from the customer into the manufacturing plant and production line, or cell, building the product.

  4. Wearable technology, such as Google Glass, will be used remotely by the engineering teams within OEMs to oversee the manufacturing process taking place within the EMS provider’s factory. This will enable them to interact directly with the production and engineering teams now making their products, on critical projects such as New Product Introduction (NPI) builds, where collaboration between both organisations is often required.

  5. Customers will be able to track more complex builds via apps linked directly into the EMS company’s manufacturing systems - giving real time updates on build progress along with timed deliveries.

  6. Bespoke products will become customisable ‘mid build’ as specifications change, with gating points identified when critical decisions need to be made. Customers will be contacted electronically advising them of the decisions they need to make and by when.

  7. Customers will have online access to progress reports against each of their product builds. A simple colour coded system will show green, for example, when everything is on plan, amber when issues are identified and red for serious concerns. Any issues will be clearly identified with an owner and timescale for resolution or next report.

  8. Shipments will be made directly from the EMS factory building the product to the end user, bypassing the need for the OEM to ever touch their own products. This will, of course, be transparent to the end user as they will still receive the goods in the OEM packaging along with OEM despatch paperwork.

  9. Finished goods could be shipped by autonomous aerial vehicles like the Google Project Wing drones. Instead of receiving a text message with the name of the delivery driver, on-board HD video footage and telemetry data of the flight will be sent directly to the end customer’s smart device.

  10. OEMs will monitor the overall performance of their EMS provider through Service Level Dashboard apps. Details of historic quote and order pricing, delivery and quality performance, as well as progress towards agreed cost reduction targets will all be available.

Whilst a couple of my predictions may seem a little fanciful, the fact is much of this is already possible, and some even happening now. The question is what else should OEMs come to expect from their Contract Electronics Manufactures? How will EMS providers of the future evolve the services they offer so as to continually add value to their customers? Personally I think it’s a fascinating subject and I’d love to hear your thoughts!

Image by Lee Jordan

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Written by Neil Sharp

Neil has over 25 years’ experience in Electronics Manufacturing Services and Component Distribution. During his career, Neil has held a range of leadership positions in sales, marketing, and customer service. Neil is currently part of the ESCATEC Senior Management Team and is responsible for setting and delivering the overall Group Marketing strategy. Neil heads up the marketing department and is responsible for both the strategy and the implementation of innovative marketing campaigns designed to deliver high quality content to those seeking outsourcing solutions.