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VO 2006 Electronics Contract Manufacturing Industry Survey Reveals Valuable Insight

SAN JOSE, Calif. – August 28, 2006 – Venture Outsource, helping technology companies worldwide make smarter business decisions, announced today some of the findings from its online, industry survey, Eyes on Electronics Outsourcing Industry 2006.

Several hundred respondents from technology original equipment manufacturers (OEM), electronics manufacturing services (EMS) providers and original design manufacturing (ODM) companies, and suppliers to these companies, worldwide, completed the survey. Some survey findings reveal:

  • Majority of OEM survey respondents provide products or services to the Industrial Electronics; Networking Infrastructure Electronics, Consumer Electronics, Military & Defense Electronics, Avionics & Aerospace Electronics, Automotive Electronics, and Medical Electronics end-market segments. Many of these segments are among the fastest growing outsourcing segments in industry.
  • Electronics OEM survey respondents are segmented into OEM companies currently outsourcing and OEMs not/yet outsourcing, at 63.7% and 36.3%, respectively. The majority of OEM survey respondents hold either managerial or director-level positions.
  • Electronics OEM survey respondents identified ‘reducing the amount of time it takes to introduce new products into the market’ as one of their key business objectives.
  • EMS and ODM companies OEM survey respondents indicate they are currently engaged with include Solectron, Flextronics, Foxconn, Celestica, Jabil Circuit, Benchmark Electronics, Plexus, Nam Tai Electronics, Sanmina-SCI, Elcoteq, Pemstar, among other providers ‘written in’. Other portions of the survey ask OEM respondents to rate these EMS and ODM companies across certain criteria.
  • Many of the EMS/ODM companies polled indicate they understand their OEM customers’ market cycles and product technologies. However, a portion of the OEM survey respondents in certain end-market segments agree with this while other OEMs (serving different end-market segments) do not.
  • Some of the technology applications identified as currently in use by OEM, EMS/ODM, and supplier companies include Internet portals; manufacturing floor management systems, ERP applications, customer relationship management (CRM) tools, and product lifecycle management (PLM) software. Based on this, respondents (by end-market segments served) indicate which applications they are not currently using but may plan to do so within the next twelve months.
  • The survey assesses the impact of China-based vendors in company supply chains. Additional geographies (other than China) attractive to OEMs and EMS/ODM providers for outsourcing electronics design and manufacturing are also identified. India rates high as a source for outsourcing electronics design while Mexico rates higher than India for manufacturing. Additional countries evaluated for these two service areas include Vietnam and Thailand, among others.
  • OEM survey respondents indicate they believe the percentage added to an outsource providers’ procurement services (i.e., profit) is higher than what outsource providers survey respondents indicate. Survey respondents engaged in this segment also respond to a number of questions pertaining to specific management practices by EMS and ODM services and, how EMS and ODM companies differentiate from one another.
  • Survey respondents from EMS and ODM companies cite ‘finding new business opportunities’ as the number one challenge they face. Differentiating their organization in industry also rates high on the list of challenges identified for EMS and ODM companies.

Other areas in industry the survey examines closely include identifying periods throughout the year when OEMs (by industry end-market segment) engage more heavily in request for quote (RFQ) and request for proposal (RFP) activity with outsourcing partners or, potential partners.

Additionally, the importance of lean manufacturing as a service offering provided by outsource providers and, its importance as it relates to OEMs when selecting an outsource provider is also examined, and more…

For more information, or to request an Executive Summary of this year’s survey, contact Venture Outsource.

Venture Outsource

Venture Outsource helps companies worldwide make smarter business decisions.
Internet: http://ventureoutsource.com




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