Two trends make choosing the right EMS provider crucial: a short product life cycle and mass customization. Soon, competition will be supply chain versus supply chain not merely company versus company. In this quickly changing arena, the EMS provider must respond almost immediately. Being first to the market is critical for a company’s survival.
EMS providers are a kind of extended endeavor – a group of partnerships between product developers and experts in components, distribution, retailing and manufacturing. The result can act like a single, virtually integrated company, whose strategies can cut time and costs from the supply chain. OEMs can meet and exceed growth expectations since their EMS partners are capable of meeting demand spikes and effectively managing inventories.
EMS providers have continued to improve and increase their production capabilities.
Through investments in the latest technologies, EMS providers have expanded the services they offer. OEMs have discovered it is better to outsource the majority of their components.
The right EMS partner can facilitate strategic supply chain management.
Today, EMS providers are able to provide integrated supply chain solutions for
OEMs. The supply chain services include product design, demand forecasting, managing suppliers, and direct fulfillment to the end customers. Many EMS partners have dedicated procurement teams to help OEMs with new product development concerns, and increase and execute supply strategies. EMS providers are increasingly performing material procurement and management. Their expertise in identifying sources and leveraging the amount of common components across many customer parts can result in pricing advantages. Given the fact that EMS providers are rapidly growing larger, they have more control in the purchase of raw materials. This purchasing power can result in lower component costs to the OEM.
By identifying with registrations of EMS providers and collaborating with the customers, the price to part ratio can be reduced. An EMS provider should be cost savings-centric.
The goal is to automate the transactional part of purchasing, to speed up procurement cycle, and to lower overhead costs. These elements assist in the reduction of overall costs and advance efficiency in a supply chain.
Kanban supply chain is a system of production developed by Toyota for efficiency. It has since been adopted by many manufactures. It centers on the idea of Just-In-Time manufacturing. That is, each component of a product is complete just in time for the next production stage. No component is over produced, because each stage produces only what the next stage can handle, meaning there is no excess inventory (an no cost for maintaining that inventory).
The right EMS provider can speed up procurement cycle time while reducing cost, including procurement, inventory, component and overhead costs. Maybe it’s time you considered outsourcing and begin your search for the right EMS partner?
For the complete solution for your EMS, Wire Harness, and Systems Integration needs, we invite you to check with SMC. We have separate engineering groups for Custom Engineering support, Test Engineering, Process Engineering, and Systems Integration. We are ISO 9001-2008, ISO 13485-2003 Certified, and FDA Registered. We manufacture to a Certified IPC-A-610 Rev E.