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When you now apply the same model to the high-mix/low-volume (HMLV) manufacturing environment, directionally, the results become dismal. This is the environment that MC Assembly matriculates as does most EMS mid-tier companies. Strict dedication of capital-intensive manufacturing machinery is impossible.
Figure 6: A worker can be seen inspecting the final boards for quality.
Our customer base values flexibility and responsiveness. They look for EMS partners instead of EMS suppliers and seek supply chain solutions that integrates their consumption with the EMS partner’s production.
Vertical Integration in Mid-tiered EMS
Curiously, vertical integration has seeped further and further into the EMS world, even to some mid-tiered EMS companies. Not understanding their business plans, it is difficult to judge this move as right or wrong.
Instead of trying to be the best in every manufacturing technology, it’s preferable to develop suppliers who are best-in-class for their respective technology. Even within specific technology groupings, differentiations such as press size, cosmetic capability, labor costs, and site locations are factors that differentiate one from another. Ultimately, this “virtual” integration may probably be a better solution for the mid-tier EMS companies versus a “vertical” integration solution.
This article was originally published in the July 2017 issue of SMT Magazine.
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