Moving From Job Shop to Full Service EMS Provider

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.

Myth Busting: Integrated Marketing Plans vs. One-Off Activities

One of the ways companies mistakenly think they are saving money is to allocate marketing budget to one or two activities with the idea that if sales increase they will up their marketing budget. This is false economy for two reasons. First, it often results in money spent on activities that never reach their full potential. Second, it often results in money spent inefficiently.

For the first example, let’s look at a trade show. I’ve lost count of the number of companies that tell me trade shows don’t work. The truth is that some shows don’t work for some companies. Years ago, McGraw-Hill ran an ad that had a mean-looking decision maker sitting in a chair saying: I don’t know you. I don’t know your company. I don’t know your product. Why should I talk to you? Trade shows are networking activity. If you do one or two shows a year and just show up with a pop-up booth and no other prep, a trade show is unlikely to achieve your lead generation goals. Worse, if you a pick a show because someone called and had a last minute corner booth, you may be at the wrong show.

In the second example, let’s look at marketing materials. When marketing materials are done as one-off projects all of the creative activities typically must be repeated for each project. That means a photographer may be brought in for several project-specific shoots instead of one slightly longer shoot designed to provide needed imagery for the next 12 months. Graphic design may not reflect a common theme (particularly if different firms are handling different projects). And, pricing discounts achieved by coordinating all printed collateral at one time may be missed.

An integrated marketing plan is a roadmap that ties everything together. Core messaging strategy is evaluated and the best mix of no/low cost activities is paired with higher cost activities to ensure an effective promotional strategy that aligns with budget. Activities are done on a schedule which helps ensure that periods of high sales activity don’t automatically mean lack of marketing activity. And because a plan normally looks at a 12-18 month schedule, outside service utilization can be planned more efficiently.  However, the best part of this marketing approach is that it helps ensure that full value is achieved from higher cost activities.

Let’s get back to the question of why trade shows don’t work. The main reason is because even when the right show is chosen attendees are often focused on the companies who did the best job of telling them who they are and why it is worth an attendee’s time to learn more before the show. This is where an integrated marketing plan really shines. A person needs to see a message 3-7 times before he/she remembers seeing it. One pre-show mailing may not be enough. An integrated marketing plan that times social media outreach, industry articles, pre-show mailings, conference presentations and/or advertising to align with key shows delivers the message consistency needed to attract qualified attendees. And, most of that promotion effort is low or no cost. It also provides for mindshare maintenance of prospects who come in as leads, but aren’t in a ready-to-buy mode yet. These prospects often get thrown away when marketing is done in an less organized fashion.

This year, in particular, is an important year to look at utilizing an integrated marketing plan because there is uncertainty in U.S. policies toward manufacturing and a lot of decision teams are looking at new options. Electronics industry trade shows traditionally have greater attendance when there is uncertainty in the market. Having consistent and timely messaging being distributed on regular basis is the best way to get more value for the marketing dollars spent in this year’s trade show activity.

Not sure how to implement a good integrated marketing plan? Powell-Mucha Consulting, Inc. can help. Visit us at www.powell-muchaconsulting.com.

 

Revisiting the Trump Effect: Dealing with the Fear Factor

My latest article in Circuits Assembly looks at the conversation many contract manufacturers and Mexican shelter companies are having with their customers: what happens if a border tax is implemented? From a sales and marketing standpoint there are definitely steps to reassure customers and formulate contingency plans that should be taken now. Read more here.

Leveraging the EMS Business Model

One of the interesting dynamics I’ve observed during my career in electronics manufacturing services is the evolution of sourcing strategy. In the ’80s, outsourcing was a risky decision that involved the highest level of the OEM organization. Final decisions looked not only at the immediate need, but at the ability of an EMS provider to support the business needs longer term. Today, outsourcing is more of a commodity decision, and sourcing teams are often staffed by people with far less knowledge of the manufacturing process or the softer issues in the total cost equation. My April 2016 Circuits Assembly article focuses on way to achieve lowest total cost.

Negotiation Tips and Tricks for Program Managers

Over the years I’ve noticed those new to program management often find negotiating with customers challenging. So, in my February 2016 Circuits Assembly article, I highlighted strategies for improving negotiation outcomes.

It is important to understand the role of the program manager has two parts: First, a program manager is the face of the company to their customers. Second, the program manager is charged with keeping the program on track within the contractor’s business model. In some cases, this role may include managing profitability. In other cases, it is simply keeping program metrics in line with the contractor’s model.

The reality is that if the program doesn’t make a profit or becomes a nightmare that causes chaos in materials or the production area, that customer most likely will be disappointed. Addressing project issues early ultimately contributes to increased customer satisfaction, smoother production flow and greater program profitability. The article lists seven strategies to improve negotiations.

Program Management Models

Strategic vs. tactical: which makes more sense?

EMS program management models can vary by provider or even by facility or program team. No one model is ideal for all account types. However, typically program managers can be divided into two groups: tactical and strategic. Tactical PMs focus more on day-to-day activities, while strategic PMs tend to take more of a leadership role relative to their accounts. While many organizations consciously make the decision as to whether their PMs should be tactical or strategic, in some cases it just evolves one way or the other. The downside to lack of defined program management focus is the lines of authority and responsibility can become blurred. In my December 2015 Circuits Assembly article, I looked at both models and discuss the drivers that make one or the other appropriate.

Establishing an Operation in Mexico Means Evaluating Tradeoffs

In my latest column in Circuits Assembly, I look at the challenges associated with establishing an operation in Mexico. The increased cost competitiveness of Mexico’s manufacturing, migration of automotive and aerospace clusters, and a lessening of the violence that has plagued the country for much of the last decade have incentivized a new wave of US-based regional manufacturers to look at the benefits of opening operations there as a the next step in their expansion plans.

That said, Mexico remains a country full of complexity when it comes to establishing a viable operation. There isn’t one right answer for best location or business structure. This month we look at some of the tradeoffs to consider when establishing a small operation in Mexico. Read more here.

Manufacturing Matters

Recently, I watched my local City Council lecture a manufacturer looking to relocate about the fact that they didn’t feel his wages were high enough to receive incentives and it really got me thinking about how detrimental the current political grandstanding around wages is. Part of that reason is that we’ve been focused on becoming a service economy so long that many of our politicians simply don’t understand how transformational manufacturing jobs can be. A manufacturer paid for my Master’s degree back when I made $5/hour in my first job of out college–that was a great tradeoff that has paid dividends my entire career. In virtually every manufacturer I’ve worked for, I’ve watched other people increase their skills and earning power through the training, tuition refund programs and career advancement opportunities. I focused my Circuits Assembly article in April on that topic. Feel to send copies to any elected officials that you feel are in need of enlightenment about the contributions your companies make to our society as a whole.

Powell-Mucha Consulting to Support STEM Event in El Paso

I’ll be out at the 5-Star S.T.E.M. Competition at Ft. Bliss, Sat. March 21st with a table talking up manufacturing engineering career options. The event is focused on Middle and High School students. Officials from Ft. Bliss will be judging their science projects. I’ve had a lot of support from SMTA and IPC. A couple of clients are allowing me to use photos of their manufacturing operations in a slide presentation and a local client has loaned PCBAs. Marie Cole over at IBM was very helpful suggesting a list of resources that both younger students and college-bound kids should consider. The one tip she had that I thought was particularly brilliant was to suggest that as part of college tours, that kids stop by the Career Center and see what internship or co-op/work study programs were being offered by employers through that center and factor that into their college choice plans.

Why support an event like this? The big reason that if kids aren’t exposed to manufacturing as a career path, they probably aren’t going to think about it and there are engineering shortages. And, I want to give a little back to an industry that paid for my Master’s degree and has kept relatively nice roofs over my head for the last three decades. To me, manufacturing is an economic engine that provides jobs that help people grow skills. I don’t see the same breadth of opportunities for growth present in the service sector. I think Henry Ford had it right when he pointed out that he was paying good wages to his factory workers because he could afford to build more cars than the rich could buy and he wanted to help create a middle class that would consume his company’s products. I’ll blog more about the resource links I share at the event and the feedback I get from the kids. Bottom line, if there are S.T.E.M events in your area, consider sharing a presentation about careers in manufacturing. The best way to attract the next generation of engineers is to talk about manufacturing when they are still thinking about what they want to do in life.

The Death of the Knowledgeable EMS Salesperson

There is no question the electronics manufacturing services industry is evolving. One aspect of that evolution is actually hurting the industry, however. As outsourcing has become more commonplace, its salespeople have become less technically competent. At the same time, as outsourcing “experts” at OEMs have retired, they have been replaced by less-experienced personnel. The result is a commodity sale focused on price.

My February Circuits Assembly column looks at ways to change that dynamic.