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Electronics Production | July 03, 2006

OEMs not satisfied with what the EMS delivers

According to a study made by Technology Forecsters Inc. the the OEMs are not getting what they want when hiring EMS companies.
The main reason why the OEM companies are using the EMS companies services is to reduce the total cost of ownership. Far from all of the EMS providers are actually delivering the desired reduction in costs, according to the study.

The OEM companies agree on that the best way to achieve the necessary cost reductions is to start the cooperation at an early stage of the designing process and follow the product development in the industrialization process. Produceability is key to successful and quality signed manufacturing.

"This study gathered an unprecedented volume of good primary source data for the industry, with some surprising results. For example, 64% of the OEMs interviewed said that communications with their manufacturing suppliers were implemented through phone, fax, and email, rather than through any kind ERP system," explained TFI Senior Economist Matt Chanoff, principal writer of the EMS/ODM Report Card and Buyers' Guide. "Although nearly all companies on both sides of the supply chain run their own automated ERP systems, the majority appears not to be connected, and many respondents expressed frustration to us."

The EMS companies in the upper class, in terms of size between $5 billion and $10 billion, best managed to meet the OEM companies requirements but the mid-sized companies, in the segment between $1 billion and $5 billion, not delivered the desired results the product owners wanted.

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