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How to select EMS providers: Factory tours, smoke, mirrors

By VentureOutsource.com

Parking lots reveal a lot about EMS company management execution but EMS performance metrics don’t mean a thing. Understanding geographic value added revenue (VAR) models can help OEMs get the best price.

You’re now approaching the electronics manufacturing services (EMS) factory. As you do so, pay close attention to the outside surrounding area. Notice the condition of the grounds surrounding the EMS facility. You might ask: What’s a parking lot got to do with the manufacturing floor?

From the moment the OEM drives onto the EMS property there are clues to how or whether the EMS provider will or can perform when trying to meet or exceed quality, delivery and price requirements demanded by OEMs.

These clues, if the OEM is observant, can be seen in the parking lot and can set the stage for an entire OEM site visit.

Yes. The parking lot can make or break a site visit even before the OEM steps one foot in the EMS provider’s front lobby.

Enter Walt Wilson
Walt Wilson, a high-level Solectron executive and Company board member in the late 90s (Solectron was acquired by Flextronics, 2007), once stood before our entire Solectron sales force and told our group how important overall perceived appearances should be to EMS providers large and small. Walt was not talking about fancy, plush buildings and bleeding-edge equipment on shiny factory floors.

He was talking about parking lots.

Citing specific examples for us, Walt talked about the numerous times when he would exit his car in the mornings and see paper and trash scattered about on the Solectron lots.

In most cases, executives of Walt’s caliber simply walked past the trash. Sometimes they called maintenance personnel, telling them to pick up the litter.

Not Walt.

Walt would grab a garbage can and proceed to walk around the parking lot, bending over to pick up each piece of trash with his own hands. Some might think: what does this have to do with an OEM’s EMS site visit?

 

SEE ALSO
Understanding the EMS provider mindset in partner selection (video/speaker)
Managing EMS-OEM relationships and EMS performance (video/speaker)
Outline for selecting EMS partners

 

This is significant. For one thing, keeping parking lots free of trash conveys to others the EMS provider cares about appearances and organization outside the building. This attention to detail outside can most likely be construed as the EMS provider also carrying about effective management of people and processes inside the building.

For another thing, if company executive personnel are willing to police trash outside, they’re also likely to engage themselves more easily in other areas of concern – like directly responding to pressing needs communicated by their OEM customers.

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As anyone in industry really knows, electronics manufacturing is more art than science. It’s riddled with challenges. OEMs want to know EMS executives are not going to pass the buck. OEMs want to know EMS providers will address their needs in times of urgency — even if whatever supportive or corrective action taking place occurs at the EMS executive level, when in fact, it should have taken place one or two levels below but, for whatever reason, whatever needed to be done was not executed or at least it wasn’t done properly.

The bottom line is, it’s not about the EMS provider who has the best state of the art SMT equipment or, who has the fanciest buildings, it’s about the people and processes behind the equipment and building façade.

From top company management, to hourly employees working on the manufacturing floor, these individuals and the processes they put in place are the most important topics the OEM should be asking questions about once inside the building.

Matching EMS business model to OEM needs
Some OEMs may require a path-to-volume from alpha and beta build plus scalability into production. Do the EMS provider’s capabilities support this type of path? Can the EMS provider build initial new product introduction (NPI) prototypes and then scale to OEM volume production?

If the OEM needs help with front-end product design or design help post production launch does the EMS provider have an adequate engineering department that can help? If the OEM only needs a portion of these services does the EMS provider provide that particular portion?

Finding the right business model and manufacturing services match is paramount when choosing the right EMS provider. OEMs should not get engage EMS providers only to later find out they cannot meet certain product demand or price points the OEM feels it must be at to be competitive in their marketplace, whether in the initial NPI stage or in the full, low-cost production stage.

But, let’s say you have a short list of EMS providers that might be a good match. Now what?

The site visit.

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