Value-Added Services In Electronic Manufacturing Part 1


The OEM hi-tech/electronics industry is undergoing dramatic change. Pricing pressures, ever-evolving new technologies and increasing global competitions are reshaping the way these companies operate. Electronic components manufacturers, as a key ally to the OEM’s, are transforming themselves to react to the changing electronics/IT landscape.

Having leading manufacturing capabilities, competitive production costs, and total commitment to quality are becoming a prerequisite to compete in the marketplace. Consequently, electronic manufacturers differentiate themselves by offering a number of value-added services to retain customers and grow their business. Some of the value-added services are becoming a trend in quality electronic manufacturing in Asia.

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High-Mix-Low-Volume Customized Orders

Evolving consumer behaviors have dramatically impacted the way OEMs deliver products. As consumer preferences have become more personalized and complex, OEMs are asking their manufacturing partners to deliver more products, with complex configurations and in
smaller volume, faster and more often. This means high-mix-low-volume, low minimum order quantity (MOQ) customized orders and tighter delivery windows.

“Paradigm shift” in Off-Shore Electronic Manufacturing

There are two misconceptions about off-shore contract manufacturing. First, foreign manufacturers are only interested in high-volume production. Secondly, foreign manufacturers often quote a longer lead-time than its domestic peers.

It is true offshore manufacturers have quite an investment in capital equipment, and they don't like to take their machines down too frequently, because they have to amortize that cost. Over the past 10 years or so, however, some foreign manufacturers have adapted the ability to change over product requirements and convert assembly lines in a faster manner. As a result, they are better able to offer high-mix, low-volume production services to the OEMs.

Its also true that product variety and fast response times can increase the costs associated with material handling, setup, test and other processes. Nevertheless, to excel at high-mix, low-volume assembly more and more quality off-shore manufacturers have acquired the skill set of scheduling, inventory management, and process control. The real payoff comes in the form of reduced lead times, which brings us to the next value-add service.

Inventory Control and Supply Chain Management

Market globalization requires both OEMs and component manufacturers to operate in a wide and complex market by matching agility and efficiency. A growing new strategy in the hi-tech/electronics industry is to postpone the customer specific configuration of the product as late in the supply chain as possible. This means electronic manufacturers are to implement better raw material inventory control and supply chain management.

To accurately fulfill more complex, customized orders, service-oriented electronic manufacturers are requiring their supply chain providers to practice principles such as continuous improvement, standardization, and quality control into their operations.

Design for manufacture (DFM) engineering services

Engineering Design

To tap into the valuable manufacturing resources of an electronic manufacturer, more and more OEMs opt to involve the engineering team of an electronic manufacturer at the outset of new product introductions. Increasingly, the engineering designer group of an electronic manufacturer becomes an extension to the OEM engineering organization.

Various electronic services are also welcomed by the OEMs throughout the entire manufacturing processes. In addition to engineering designs, design-for-manufacture (DFM), which is a process of designing so that development cycle can be shortened and products can be manufactured at the optimal costs, has seen its popularity gone up substantially.

In our next blog we will discuss other value-adds provided by quality component manufacturer such as design-for-manufacturing (DFM) and manufacturing integrations.

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