The evolving relationship between OEM and EMS

JJS Manufacturing InsightsThere is little doubt that manufacturing in the future will look very different to what we have now. In this insightful article on the Future of Manufacturing, Becky Morgan suggests that manufacturing will evolve into two separate models; one capital intensive, and one that is not.

This might fit very nicely with the idea of OEMs concentrating on product design and marketing, with EMS providers performing the physical manufacturing operations. However with OEM’s faster reaction to market demands and reduced product life-cycles, it would seem to make sense for EMS providers to improve their prototyping and pre-production services such that they are fully prepared to quickly take on the ‘volume’ manufacturing quantities when the time comes. The relationship between OEM and EMS then becomes ever more symbiotic.

Increasing speed, flexibility and effectiveness are obvious. But what does that mean in strategy and execution? Put simply, every single aspect of a manufacturing business must be faster, more flexible, and more effective next year than it is this, and even more so the year after.

Let’s be specific.

Manufacturing will evolve into two fundamental models: one characteristic of those businesses that must be capital intensive, the other of those that do not need to be capital intensive. The two models will deal with the same challenges, but differently. The latter will lead with cutting edge thinking, processes and relationships, while the former will benefit from observing and adapting.