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Developing Trends in Asian Outsourced Electronics Manufacturing
Over the next few weeks, Evertiq will publish an interesting article series entitled "Developing trends in Asian outsourced electronics manufacturing", written by Xander Kameny, Operations Consultant at Riverwood Solutions.
Industry executives and academicians have noted for some time that a number of different industries tend to form clusters or geographically concentrated groupings of similar and interrelated companies. Familiar examples of industry clusters include Hollywood (for TV & movies) and Silicon Valley (for semiconductors and networking equipment). Noted Harvard professor and author Michael Porter characterized these clusters as “critical masses in one place of linked industries and institutions--from suppliers to universities to government agencies--that enjoy unusual competitive success in a particular field.” Porter’s work suggests that this almost organic process of clustering generally increases the productivity of the organizations within the cluster while simultaneously creating an environment that makes it easier for new companies to enter or new start-up companies to emerge. The Electronics Manufacturing Services industry has developed a number of meaningful clusters around the world including San Jose, Guadalajara, Penang, and Shenzhen. These Electronics manufacturing clusters developed like a rolling snowball and vitalized regional economies while defining manufacturing trends for many years. The geographic concentrations of interconnected companies, specialized suppliers, service providers, and associated institutions tend to form from one or more catalysts and evolve to take on a life of their own. Clusters tend to arise because the clustering effect serves to increase productivity and lower costs, providing a microcosm of competitive advantage. Understanding why and where electronics manufacturing clusters will blossom is beneficial to OEMs and service providers alike that are seeking to develop an efficient and cost-effective longer term manufacturing strategy. • The first article examines China’s cluster landscape and the catalysts of cluster development. Developing trends – Part 1: Clusters old and new • The second installment explores the question of supplier migration away from China’s increasingly costly coastal cities to China’s interior verses relocation to other Asian countries. • In the final piece we share a survey of industry participants on their opinions of electronics manufacturing cluster development trends.
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