EMS is a low-margin industry, and overhead cost must be reduced through the most efficient practices. Complexity in this rapidly growing industry is a constant battle for many reasons, which we’ll discuss here. These complexities arise from different sources and must be dealt with efficiently and quickly. The market is tough, with new innovations constantly causing a race to keep up with the introduction of new products.
One of the foremost challenges is the customization of supply chain services and gaining competitive advantage through supply chain. This area is very complex, and the provider must possess the integrated ability to monitor response to client demand. The revolutions in process, technology and partners have given us many new supply chain proficiencies:
- In the area of process, the forerunners have elected to use demand-driven supply chain processes, i.e., inventory managed by the vendor, warehouse cross-docking and late-stage postponement.
- Regarding partners, these large businesses have started outsourcing to specialized service providers that offer economies-of-scale, process excellence, and cost advantages not as effectively attained in-house.
- Technology is a major influence and is changing day-to-day. Cost savings and performance efficiency can be gained using these new technologies.
Another of the foremost complexities faced by the EMS industry is demand forecasting. Sharing Point-Of-Sale (POS) data is popular for improving demand forecast accuracy in the retail industry. In sectors like high tech, automotive, and aerospace consumption is frequently communicated in inventory positions.
New product design, production, and introduction is becoming more and more important as buyers demand customization and latest technology now. This complexity in the industry turns the race to provide innovative products into a sprint for the newest and greatest. Flexibility and technology are required in a partnership between the OEM and the EMS provider as well as immediate information and continuous communication. The OEM and the EMS provider must have good long-term visibility into new products and capabilities that require alterations. Volume production is easier to manage than project launch, as a number of variables must be watched.
The constant, and stringent changes to industry regulations is another aspect the industry faces in this war against complexity. The EMS provider must remain compliant and ensure that the product is also approved and regulation compliant. As the guidelines multiply, this facet intensifies the complexity of the EMS business. It is easy to understand why your EMS provider must constantly be aware of the changes to regulations and their requirements.
What is it that you want? It seems that customers require:
- Support in traceability and quality data collection requirements for medical & automotive customers;
- Remote access; and
- EDI/Portal Support
SMC can meet all customer and regulation requirements at a reasonable cost and with complete efficiency and timeliness. Our longevity in business proves that we have overcome the complexities of the industry.
We will help you enlist specialized outsourcing providers and new technology platforms in this battle against complexity. Manufacturers that master the complexity in their demand chains will be the long-term winners in the marketplace.
Give us a call. Or, arrange a meeting to discuss our capabilities and your needs. We await the opportunity to serve you.