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Electronics Production | May 20, 2010

Many companies view regionalisation as a ‘Good Thing’

Would it be best to manufacture electronic products in the region into which the product will be sold? An overwhelming majority says 'Yes'.
Market researcher & analyst company Charlie Barnhart & Associates has been commenting on the benefits of a regional manufacturing solution for the past 3 years. "We define regionalization as an OEM’s decision to manufacture electronic products– whether internally or through an EMS/ODM relationship– in the same region into which they will ultimately be sold", states Eric Miscoll.

While recognizing that this is not necessarily the best approach for all products, especially smaller commoditised products, regionalisation does offer certain benefits in terms of lower inventory and logistics costs, faster delivery times, and lower support costs, he believes.

In the first ever Charlie’s Pulse survey, visitors were asked to share their views on regionalization. It was asked if respondents thought it best to manufacture electronic products in the region into which the product will be sold. The vast majority of respondents (84%) agreed with this view to some degree, while only a small percent (16%) disagreed.

Respondents then were asked if their companies were currently utilizing a regional approach to electronics manufacturing. The majority of respondents (80%) indicated that they were pursuing such a solution to some degree, while the minority (16%) said they were not. Of those indicating they were not, the majority (75%) had indicated in the first question that they did not agree with the regionalization approach, so they were acting in accordance with their beliefs.

"We realize that the issue of manufacturing solutions for electronics products is a complex process that addresses many crucial variables and that there is no one size fits all that applies to all OEMs. The results of this survey support the notion of a regional manufacturing solution, and seemingly companies are pursuing just that", the analyst concludes.

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