-
- News
- Books
Featured Books
- smt007 Magazine
Latest Issues
Current IssueBox Build
One trend is to add box build and final assembly to your product offering. In this issue, we explore the opportunities and risks of adding system assembly to your service portfolio.
IPC APEX EXPO 2024 Pre-show
This month’s issue devotes its pages to a comprehensive preview of the IPC APEX EXPO 2024 event. Whether your role is technical or business, if you're new-to-the-industry or seasoned veteran, you'll find value throughout this program.
Boost Your Sales
Every part of your business can be evaluated as a process, including your sales funnel. Optimizing your selling process requires a coordinated effort between marketing and sales. In this issue, industry experts in marketing and sales offer their best advice on how to boost your sales efforts.
- Articles
- Columns
Search Console
- Links
- Events
||| MENU - smt007 Magazine
The Year that Was
January 23, 2013 | Richard Ayes, I-Connect007Estimated reading time: 4 minutes
Editor's Note: This article originally appeared in the December 2012 issue of SMT Magazine.Paul Blom, executive vice president, operations, at SMTC, details the biggest trends that occurred in the EMS industry in 2012. He tells I-Connect007's Richard Ayes how these trends, including environmental compliance, onshoring, and labor issues, will impact the industry in 2013.Richard Ayes: What would you consider to be the biggest electronics manufacturing trends of 2012?
Paul Blom: Customer requirement for new product launch support and speed to market continue to dominate our discussions. This, coupled with a somewhat uncertain end-market demand, drives the need for high levels of procurement and manufacturing flexibility. Although these business pressures are not new, they continue to grow in importance as we provide service to new and existing customers.
Environmental compliance and the selection of component materials, which comply with environmental requirements, are growing as a focus area as we work with OEM customers. We continue to invest in training for our staff in these areas to remain current with environmental directives.
Also, as more OEMs shift their focus from factory exit costs to total cost of ownership, we see growing opportunity to demonstrate the benefits of a global sourcing and manufacturing model. I see this as a very positive trend.
Ayes: What labor issues have you seen over the past 12 months, particularly in markets such as Brazil or China? Blom: I am pleased to share that we have seen an excellent level of stability in our China workforce with reduced turnover rates, particularly with higher skill level positions. This has helped SMTC to increase the level of technical complexity we bring into our China operations.
Ayes: What key issues do you see impacting the EMS industry in 2013?Blom: I fully expect to see continued uncertainty in global end-market demand. This will increase the value OEMs place on our ability to provide solutions and practical approaches toward demand management and overall supply chain flexibility.
Ayes: What key industry segments pushed growth for the EMS industry in 2012? Do you see an emerging market segment for 2013?Blom: We’ve been pleased to see growth in the medical and energy markets with continued growth in the industrial and communications segments. Our focus is on increasing the number of OEM partnerships we have in these areas.
Ayes: What about the onshoring activities? Do you see this continuing next year?Blom: I see this continuing for mid-sized OEMs and for larger OEMs with specific product sets, which benefit from local North American sourcing. In most cases, the benefit to the OEM comes from proximity to the design and new product introduction teams or from proximity to the next stages of the supply chain.
This is not a one-size-fits-all trend. I see our role as providing geographic manufacturing alternatives, a global migration path, and an analytical approach which helps our OEM customers with their sourcing decisions.
Ayes: How would you describe the EMS industry currently in terms of competition? How has business been so far this year?Blom: With a slower global economy as a backdrop, EMS players are dealing with a lower level of EMS spending globally. Europe has been particularly impacted. I see OEM customers using this as an opportunity to consolidate their EMS spending. This has led to revenue growth at SMTC, as customers shift an increased number of products to us.
Ayes: What challenges currently exist for the industry?Blom: Cost and technology transfers and technology deployment continue to be important and dialogue and work on environmental regulations continues to grow.
Ayes: How is your company addressing such challenges?Blom: We are working with an increasing number of customers to ensure they are well positioned to meet environmental requirements and deal with hazardous materials compliance and other materials sourcing related requirements. We have increased our investment in customer value engineering and in commodity management, allowing us to address these customer needs. Regular reviews with our customers also allow us to understand how each customer’s needs are evolving in these and other areas.
Ayes: Do you think a return to the vertically-integrated OEM is possible?Blom: I just don’t see it. I expect you’ll continue to see attempts at this model from time to time; however, it has too many flaws in the long term. The level of supply chain and manufacturing expertise which exists with EMS players, coupled with the global sourcing and fulfillment flexibility the EMS model affords the OEMs, will continue to trump the OEM in-sourced model. The vertically-integrated OEM model can show short-term attractiveness on paper, but will typically fail to provide much needed flexibility as OEM requirements evolve.As Executive Vice President, Operations, of SMTC Manufacturing Corporation, Paul Blom is responsible for engineering, manufacturing operations, and supply chain management on a global basis. Prior to joining SMTC, he was a founding executive of Celestica and served as Senior Vice President, Global Supply Chain. Blom holds a Bachelor of Science in Mechanical Engineering from the University of Toronto and a Master’s in Business Administration from the Rotman School of Business.