EMS Success: Moving Forward in Tier I

Estimated reading time: 9 minutes

With the success of its equipment distribution business in the Asia market, WKK expanded into the electronics manufacturing service (EMS) sector in 1986. Under the stewardship of CEO and chairman Senta Wong, WKK Technology Ltd. (WKKT) gained steam in the market year-over-year. This article looks at how this provider has achieved and maintained growth in an exceedingly competitive market.

It’s no secret that China is becoming the center for activity in electronics manufacturing due to low-cost labor and a booming domestic market. The consumer electronics industry in that region is expected to climb from $71.5 billion in 2006 to $167 billion in not-too-distant 2010.1 There are still concerns, however, with manufacturing in that region; such as overall product quality and intellectual property (IP) retention. Management in such businesses often are plagued with high employee turnover rates, resulting in the need for continual employee and operating training. In light of this, one EMS provider has continued a successful reign, received, and continues to receive awards globally from the industry and its customers, and has, on average, a five-year employee retention rate.

WKK (Holdings) Ltd. has become one of the largest electronics industrial equipment distributors in Asia. Its EMS business, WKKT provides electronics manufacturing services to customers throughout the U.S., Europe, and Asia Pacific. The provider holds International Certifications, which are critical to ensure that common standards are in place for quality and systems control when working with global customers who, in turn, are involved in global markets and distribution networks throughout more than 200 cities. Most of WKKT’s global customers have awarded the provider ship-to-stock (STS) certification, waiving customer inspection prior to shipment to their end users.

WKK expanded into the EMS sector in 1986, a natural move considering their long history in electronics, and having the infrastructure - electronics business knowledge, business contacts, human resources, technology - to grow their business. Within 21 years, the company climbed the ranks, reaching 23rd position in EMS businesses in 2003 and 17th in 2005.2 As of publication, 2006 rankings were not disclosed pending a company annual report. (See WKKT Profile.)

FIGURE 1. Testing facilities.

In 2002, the company invested in the WKK Technology Park in the Dongguan, Guangdong province of China. The facility has obtained several industry accreditations, including ISO 14001 for its environmental management system. WKKT holds claim as the first local company to comply with lead-free soldering requirements since 2002. Currently, the manufacturing facility supplies product in compliance with the EU’s RoHS Directive, having reached compliance in 2005. Being the first in the region to comply took some time and effort. The most important element for successfully implementing the program was advanced planning, and having a well-defined plan and procedure in place. For the process itself, WKKT assigned both engineering and quality departments as co-leaders, and implemented no-clean processes - doing away with cleaning assembled boards; however, cleanliness testing using an Omega meter is done, per customer specifications (Figure 1).

Customer Relations

In its nearly 21-year history, WKKT has established long-term customer partnerships by offering a range of vertically integrated manufacturing services - from supplier certification, electronics purchasing, and acquisitions to manufacturing, testing, burn-in testing, box-build assembly, final testing, and quality assurance. Each new service emerges in response to customer requests. The company now manufactures a range of end products, including computer servers; telecommunications; industrial and appliance products; electronic financial systems; and automotive, consumer, and medical electronics.

WKKT’s business model has helped position the company as a global EMS provider and original design manufacturer (ODM). The company motto, “The best for you,” portrays the customer-centric attitude that management takes to achieve lowered costs by manufacturing in China and using the flexibility management concept, while ensuring high-quality products and engineering value-added solutions. New product introductions (NPIs) in the manufacturing facility are focused on achieving a quality level that often exceeds customer standards.

While there is a common concern in the China market regarding IP piracy, WKKT has a strong commitment to protecting its customers’ proprietary products and designs, and only performs ODM services for its existing customers - stepping carefully as customers’ trust and request levels increase. The company also recently received the 2006 Hong Kong Award for Industries - Productivity and Quality Grand Award, which encourages and recognizes Hong Kong enterprises that demonstrate improved and continual productivity and quality - with more than 308 applications.

Manufacturing Competencies

North American manufacturing generally is considered high-mix/low-volume (HMLV), with frequent product changeovers, while the lion share of low-mix/high-volume (LMHV) manufacturing, often of consumer products such as cell phones, occurs in China. Contrary to this, WKKT currently builds both HMLV and LMHV products. Because of the high product mix and their high-speed production needs, WKKT looked to placement machines that offer flexibility and speed. Therefore, the provider has outfitted nearly all of their SMT lines with Yamaha placement machines (Figure 2).

FIGURE 2. Workers on one of WKKT's 80 assembly lines at the Dongguan facility

WKKT manufactures a range of products within several industry segments. By forming different project teams consisting of sales, engineering, quality management, and manufacturing, the firm gives customers the focus and professional support they require throughout the entire manufacturing chain. They produce a range of board sizes - from simple, single-sided boards measuring 20 mm2 to complex, multi-layer boards measuring up to 520 mm in length. The company also plans to expand its SMT lines by increasing daily placement capacity to 26 million chips and 1.8 million QFP and BGA components.

While the manufacturer serves a variety of end-user markets, the team considers industrial, medical, and automotive applications the most difficult to assemble because of the technological expertise and quality they require. End products that the company manufactures include Bluetooth transmitters/receivers, electronic games, communications base stations, automotive electronics, and consumer products. They do not manufacture military products. As with most EMS firms, WKKT is involved in high-volume assembly of complex boards incorporating flip-chip, chip-scale, and wafer-level packages, as well as other odd-form components. They also build product using flex-rigid boards for an undisclosed customer. Embedded passive and active designs are being implemented into communications devices, with plans to extend this emerging technology into other applications. In this highly competitive market, WKKT has established an extensive engineering and test staff that attempts to stay ahead of the curve, solving problems and designing new systems and manufacturing processes. The company does rely on outside suppliers for some materials, using plastic injection houses, metal shops, and cable and harness shops. As a rule, all suppliers are selected on the principle that their factories be located within two-hours travel distance from the WKKT Technology Park.

Keeping Them on the Line

One widely publicized issue in manufacturing facilities throughout China is staff retention. It is common practice for assemblers to move from one facility to the next within a month, or even a week, of beginning in their first position. Despite this, WKKT boasts that the average length of service for their employees is about five years; some employees have been with the company for more than 10 years. (See WKKT Workforce.)

Employee training at WKKT consists of technical/job and regulatory training. New employees undergo extensive regulatory training, which covers company and local labor laws. Both new and experienced employees receive technical training, allowing them to hone their skills in various areas within the manufacturing environment.

FIGURE 3. WKKT Dongguan campus.

Because staff retention is a difficult facet of electronics manufacturing in Asia, WKKT made significant investments in its Dongguan-based Technology Park, which offers employees a range of benefits on the self-contained campus, including dormitories, canteens, a 24-hour medical clinic, sports and recreational facilities, a 200-person capacity theater, TV rooms, a barber shop, bank and ATM machine. The 120,000-square meter site, a veritable self-managed city, also incorporates wastewater treatment facilities, solar energy systems, and its own power plant and fire station (Figure 3). The benefits of keeping employees satisfied in their positions on the manufacturing floor trickles up to the management level. In its rapidly growing business, WKKT believes in a strong commitment to people, and a mutually beneficial partnership with customers and suppliers.

Business Practices and Direction

Electronics manufacturing in China shows no signs of slowing. It is predicted that by 2026, China will overtake the U.S. as the world’s largest economic power.3 However, stories of North American manufacturers shifting jobs back on-shore because of shipping costs and quality issues exist. Still, China is the force to be reckoned with regarding high-volume electronics manufacturing. To be a responsible corporate citizen, WKKT believes that it is necessary to strike a balance between being competitive in business, seeking profit, and considering the needs of employees, customers, suppliers, and the environment. To be continuously successful, WKKT focuses not only on the product, but also the people. They feel their biggest challenge in the next 5-10 years will be the readiness of advanced technology to serve customers. WKKT also has an aggressive roadmap and plans geared specifically to its customers’ needs.

References

1. “In-Depth Analysis: Electronics Manufacturing in China,” In-Stat, September 2006.
2. “Top 50 EMS Providers,” Manufacturing Market Insider (MMI) newsletter, 2005.
3. Wade, Charles; “Electronics Manufacturing Migration: The Rush to Judgment,” Technology Forecasters Inc., 2006.

Senta Wong is chairman and CEO, WKK (Holdings) Ltd. Bengie Kwong is an executive director of WKK (Holdings) Ltd., and president of WKKT. For inquiries, call (852) 2357-8888. Gene Weiner, consultant, Weiner & Associates, may be contacted at (203) 797-9103; e-mail: geneweiner@earthlink.net. Michelle M. Boisvert, managing editor, SMT, may be contacted at (603) 891-9310; e-mail: mboisvert@pennwell.com.

Engineering and Customer Service in North America

Located outside of Rochester, N.Y., lies SenDEC, a fast-growing company that builds its success on a commitment to customer service and support throughout all aspects of the contract electronics manufacturing (CEM) business. Embedded in the organization’s culture is the belief that helping their customers succeed will ensure their own success. SenDEC also offers seminars on design for manufacture (DfM), design for assembly (DfA), and design for test (DfT) to share input with customers on forward-thinking design services. The seminars and subsequent evaluations have helped improve the manufacturing process and reduce costs for customer designs.

In design engineering and prototyping, SenDEC keeps their customers’ interests in the forefront. Having in-house design and prototype services gives customers feedback to a more streamlined and economical manufacturing process, while giving SenDEC a strategic marketplace advantage. Using their knowledge and experience in this facet of manufacturing, the team works with engineers, reviewing their bare board layout, bills of materials (BOMs), component placement/geometry, and test guidelines to help optimize manufacturability and test. This allows customers to focus on ensuring that their design works and to rely on SenDEC to optimize the design for manufacturability. The company believes that providing DfM, DfA, and DfT capabilities can pay dividends over a product’s manufacturing life cycle.

Through customer partnerships, SenDEC earned the 2006 Vision of Excellence Supplier Award from Hand Held Products, Inc., a worldwide manufacturer of image-based data collection systems. The award recognizes suppliers who demonstrate continuous quality improvement, rapid customer service, timely root-cause and corrective-action response, and who institute long-term preventive actions to build quality into products or services. The value of an experienced design-engineering and prototype organization that partners with companies and provides feedback for PCB assembly optimization is becoming vitally important in the competitive global economy. Combining that with customer service can help EMS providers thrive in a time when competition and pricing strategies are fierce.- Michelle M. Boisvert