As a member of Medical Product Outsourcing’s Editorial Board, I share my views on 2018 and the year ahead in this article.
PMCI’s December 2018 article in Circuits Assembly looks at regionalization strategy:
As I write this, a trade deal with China that will eliminate the tariffs appears to be in development, but China is continuing to talk tough. The tariffs are causing significant pain to manufacturers in both the US and China, so I suspect some type of deal will happen eventually. In the meantime, the tariffs motivated many companies to look hard at the geographies involved in their outsourcing strategy. Some OEMs have moved or are in the process of moving some of their business, and a much larger number are thinking about it. I think it is important to carefully weigh the pros and cons. Read the full article here.
Your customer wants to grow. Are you ready for the transition?
One of the difficult challenges small electronics manufacturing services (EMS) companies face is the transition from a transaction-based job shop to a relationship-based, full-service EMS provider. There are a number of issues to consider prior to taking that journey. My June column in Circuits Assembly, looks at some of the issues a job shop should analyze in determining whether to make this evolutionary change. Read the full article here.
In EMS, program management is the “face of the company” to many customers. When those customers work with more than one facility, the challenge becomes ensuring that customers see consistency in the way their business is managed. This isn’t an issue for Tier One EMS providers, but can be for companies that have grown by acquisition or smaller EMS firms that are just starting to add facilities. My November 2017 article in Circuits Assembly looks at ways to address this. Read the full article here.
Does your company have issues in this area? PMCI performs customer surveys and program management assessments that can help identify specific areas requiring improvement. PMCI can also create program management handbooks and offer training designed to standardize the program management approach among all facilities.
Back in February I wrote an article for Circuits Assembly, titled “The Trump Effect, One Year Later,” where I highlighted some of the positive effects those policies have had. While the stock market has gone back to being more of roller coaster, I still feel we are looking at more positives than negatives. Tax policy really has improved for both individuals and small business. Jobs numbers look good. The economy has taken a slight dip because of the demand bubble created by last year’s hurricanes and floods, but most companies in the EMS sector are still reporting strong sales. Trade talk is still tough, but I suspect that will work itself out favorably. We’ve got ground to regain from past concessions.
The one car wreck I see still on the road is health insurance. My health insurance company conveniently informed me after open enrollment closed (and they raised premiums an astronomical amount) that they would cancel my policy at the end of the year. So, I’ll be shopping in the desert wasteland of HSA-compatible junk insurance policies at the end of the year unless Congress decides to actually do some work on healthcare before the mid-terms. While I carry individual insurance I know many smaller EMS companies struggle with this issue as well. Letting the market meltdown before initiating a fix is a slap in the face to small employers and responsible individuals who have been shaken down by insurers for decades throughout the U.S. Hopefully, that will change.
All that said (or vented), I still think the business community is in a better place right now. What do you think? Feel free to comment.
Susan Mucha will be giving a presentation at this year’s PCB West as part of their newly introduced EMS Management Conference Track. There is still time to register.
Five-and-a-Half Technical Services Marketing Myths
Wednesday, Sept. 13, 1-2 p.m.
My August column in Circuits Assembly focuses on getting to win-win in OEM-EMS negotiations.
One of the recurring themes I hear in electronics manufacturing services (EMS) is how challenging it is for many program managers and salespeople to negotiate with customers. I’m often told the industry has changed, but when I ask hard questions I tend to find that the biggest change is that the people doing the negotiation seem to know a lot a less about the business of building electronic products than their predecessors. And this isn’t just on the EMS side. Years ago, OEMs put highly technical senior people on the team that managed outsourcing efforts. While those people were tough negotiators, they negotiated based on strong knowledge of the processes and challenges inherent in electronics manufacturing. Similarly, EMS program managers (PMs) were often pulled from operations. If expenses were increasing, they had the knowledge to explain the reason a price increase was necessary. Read more here.