Most manufacturing firms I know (both EMS and precision engineering) are hiring right now. In many labor markets, that can be difficult. I continue to wonder how much of this is that the right applicants aren’t available versus that the right applicants don’t know manufacturing is a career option. Like many of you, I’ve sometimes beaten my head against the wall trying to explain to young people why factory work is great career option both in hiring back in my corporate days, and to friends and relatives entering the job market. My favorite example was when I was interviewing marketing manager candidates in Florida and one applicant looked around my rather spartan, windowless office and told me he really wanted a job that had a nicer office. Fortunately, the next applicant went out on the manufacturing floor and was amazed by the prospect of being able to work in a place that built electronics. SMT placement machines fascinated her. It was the same type of excitement that brought me to EMS in 1981–it is pretty cool to work in a place where you see new products ahead of the rest of the world.
That said, the message in my latest Circuits Assembly article is that the best “target” applicants may be mid-career folks looking for a change. The service sector (particularly hospitality) typically hires people with required skills rather than trains and promotes from within for supervisory and management positions. It can be physically demanding work. The end result is a pool of workers with little advancement potential looking for better options. The challenge is that those workers may not be looking at manufacturing jobs. Their vision of a factory may be a dark, dingy, noisy workplace. They may have heard that manufacturing jobs will all be replaced by robots (although in many cases they are more at risk of being replaced by kiosks in their current jobs–thanks to the fight for $15). They may simply assume that they don’t have the skillset to work in a factory. Or, they may not have a clue that these jobs exist.
The benefit of looking at this segment of workers is that they are experienced enough to appreciate concepts that younger workers may not. Where a younger worker overestimates their value; an older worker appreciates seeing a framework for advancement. Where a younger worker is looking for a cool workplace; an older worker appreciates benefits like health insurance, paid vacation and predictable hours. In short, workers who have enough work experience to understand the realities of their current career choice have the understanding to appreciate much of what a career in electronics manufacturing has to offer. Read the full article here.
I wrote an article that focused on TeligentEMS’ teaming efforts with Tallahassee Community College (TCC) to develop an educational program for SMT operators in SMT Magazine in May. I really enjoyed writing this article for two reasons. First, as much as the Gator alum in me hates praising anything in Tallahassee, TCC really has its act together. It is helping to change lives as well as provide an education to folks who either don’t have the time or the money to spend on a four-year degree. Second, I was able to interview a production worker who had changed her life by taking advantage of SMT training at TCC and then going to work at TeligentEMS. Much of that interview is in her own words and I think in many ways she reflects the sentiments of many 30-something workers who are trapped in service sector jobs and looking for a path to a job with advancement potential that doesn’t involve a long period of unemployment and retraining in order to make the switch. For EMS companies facing challenges in recruiting production employees, this article highlights a formula that seems to be working.
Some electronics manufacturing services (EMS) companies do a great job of differentiating themselves, but many don’t. If your company copied what your nearest competitors have on their websites, touts its equipment as its primary advantage, tells everyone it is the industry’s best kept secret or says it is customer-centric; it is really just screaming me too.
The reality is that within a specific size class most EMS companies have the same equipment and industry-standard processes. What makes a difference is the expertise of the team and the home-grown systems and processes that solve customer problems.
Yes, I used the word problems instead of the nicer euphemism, challenges. Companies rarely outsource manufacturing projects that have perfect design and quality metrics, well-understood demand trends and no surprises. When things run that well, they normally want to keep it in-house. Instead, they either outsource because they don’t want to be in the business of manufacturing or because that product doesn’t fit well into the mix of manufacturing they want to keep in-house. The end result is that EMS companies are in the business of managing controlled chaos. Outsourcing decision teams understand that and are looking for companies most likely to make them look good. When all competitors look the same, their safe choice is to make the decision on price. When one appears to have a better ability to address the issues that keep them up at night (and will get them fired if the contract manufacturer fails), that EMS company will likely get coached into meeting a reasonable target price.
So how do you package the secret sauce that makes your customers think your company is the best but isn’t obvious until they become your customers? There are two key steps. The first is understanding enough about your secret sauce to sell it (and yes, PMCI has tools for doing that), and the second is building a strong team sell. Prospects won’t understand that your team (engineering, production, program management, purchasing) has a superior solution, if they aren’t exposed to your team until after they are customers. Companies that successfully differentiate understand that and selectively engage team members with prospects throughout the sales cycle. Prospects aren’t sold on capabilities, they are exposed to the expertise of team members who discuss how the problems that keep them up at night are going to get solved if they select that EMS provider.
How do you turn your entire staff into that powerful a salesforce secret weapon? PMCI’s EMS Concentric Selling™ one-day onsite seminar can help. The course is designed for sales, program management and key staff members in engineering, manufacturing and purchasing. The goal is to provide a common framework of industry and selling process understanding to the members of your team who interact with customers and prospects. Case study breakout sessions are designed to help team members learn to develop specific account strategies and work together to close the sale. These sessions also help break down the disconnect that often occurs between sales and the technical staff in terms of what ideal projects look like. Request an informational brochure here.
As I write this at the beginning of February, President Trump is establishing himself as a man who follows through on campaign promises. Assuming that trend continues and there is a clear path to tax and regulatory reform, there will also be changes in OEM sourcing strategy. It may even be the level of shift seen when China devalued the yuan.
What does this trend mean for US regional electronics manufacturing services (EMS) providers? Beyond the immediate benefit of regulatory and tax reforms that has many of the EMS CEOs I know practically dancing in the streets, I think it will open the door to significant opportunities across the board. When OEMs outsource offshore, they tend to bundle all their projects. There are two reasons for this. First, a smaller supply chain is easier to manage at a distance and second, low cost labor markets typically have a higher percentage of “one size fits all” EMS providers. When OEMs outsource in the US, they tend to look more closely at the value of tailoring their outsourcing strategy. Niche projects may go to suppliers better interested in those volumes or technology associated with those projects. There may be interest in keeping new product manufacturing in close proximity to the engineering team. There may also be a desire to keep some manufacturing in-house and source production that is not a fit in close proximity. While these scenarios already exist today, tax and regulatory policies which incentivize re-shoring will ultimately increase the number of available opportunities.
The challenge is that if your company is the EMS world’s best kept secret you may not be on the bid list. So, from a marketing perspective, this is the right time to be developing a marketing strategy that will get your company’s name more widely known. It is also the right time to be reviewing existing accounts and looking for additional business opportunities either within the account or other divisions of that customer. The bottom line is that if the Trump Effect continues companies that weren’t on your company’s radar screen as prospects may be ready to buy your services. But they won’t be talking with you if they don’t know who you are. EMS providers that are upping their networking and marketing activities now, will benefit when those companies start re-evaluating strategy.
Powell-Mucha Consulting, Inc. specializes in helping companies develop marketing strategies that build market mindshare and highlight each client’s unique capabilities. This differentiation can be especially important in attracting OEMs pursuing niche outsourcing strategies.We also offer sales and program management analysis, coaching and training services, which can help your team quickly broaden their focus. Contact us if you’d like additional information.
My January 2016 article in Circuits Assembly looks at the Trump Effect and Manufacturing. The correct link is provided, but right now it appears to navigate to CA’s home page so look for the article on the left side of that page, if the link doesn’t take you to directly to the article. I look forward to a year of breaking paradigms and from what I’ve heard in conversations, a lot of EMS CEOs are hoping for the same thing. Read the full article: The Trump Effect and Manufacturing
My December 2016 article in Circuits Assembly looks at another management challenge: managing generationally, and asks the question: are generational differences impacting your program management team’s performance? Read the full article: Better with Age
My October 2016 article in SMT Magazine looked at the ways four different electronics manufacturing services (EMS) providers marketed and sold their services. The common thread in their strategies is listening to their customers and adapting their business model in ways that address those customer needs. However, the differences in their business models and the way they are sold demonstrates there is definitely more than one way to sell EMS. Read the full article: Choose Your Marketing Strategy.
One of the challenges of our shift to a service economy is that a lot of people have never been inside a factory. My October 2016 article in Circuits Assembly magazine looks at the challenges manufacturers encounter in recruiting and training people with no manufacturing experience. Interesting enough, this particular article seems to have hit a nerve, as I have gotten more unsolicited, positive feedback on it than on any article I wrote in 2016. Read the full article: The Service Economy: Today’s Training Challenge.
My June Circuits Assembly article looks at EMS systems strategy.
One of the most positive trends I’ve seen in the electronics manufacturing services industry over the past five years is the permeation of ERP, shop-floor control and related systems that truly do let businesses work smarter, even in small, one-site companies. I see this as a huge positive because the complexity of information that must be managed on a day-to-day basis continues to grow. Read more here.
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.