In the world of Contract Electronic Manufacturing, recent advances in technology have allowed companies to gain significant efficiencies. It is possible to reduce manufacturing costs considerably by increasing throughput. Today’s equipment enables contract manufacturers (CMs) to achieve greater speed with higher first pass yields. The speed and accuracy of the latest machinery is often the most significant differentiator among CMs.
Speed kills, but it is the competition that’s on the chopping block. The dilemma that many contract electronic manufacturers face is; should we focus on serving a much smaller yet specific segment of the market or focus on being generally good at a wide range of services. Unfortunately, most manufacturers ride the fence. We are afraid of missing an opportunity, and we flounder around, chasing all types of projects and never become great at anything. It is not unusual for CMs to regularly reinvent production methods for the job at hand. Most of the time companies understand what they do best, but they are not sure if they can win enough of that business. Unfortunately, this describes many of the domestic electronic manufacturers. One of my college professors referred to this as a “shin kicking contest” where no one has a clear advantage, so we compete on price alone.
Companies that decide to specialize in a specific niche can quickly gain production advantages in that area. They begin to see their equipment needs through a different lens, a lens that leads to maximization of efficiencies. If you have been in this industry long enough, you understand that some equipment is designed to be general application equipment. It is not the fastest on the market, but it is more versatile and allows you to compete for a broader range of opportunities. Several equipment manufacturers build models and accessories that enable you to excel in a narrow lane, and since they were designed to do one thing well, they run circles around the more general machines. Many contract manufacturer’s struggle to justify capital investments in specialized manufacturing equipment. They prefer to wait until they have a sizable long-term contract in hand. I could go down the “which came first, the chicken or the egg” path but I am sure you can see that with the preferred equipment for the job, which increases throughput and efficiencies, you can submit more competitive numbers and win more opportunities.
The trick is, if you decide to narrow your focus, then get the best equipment for the job, create best practices that allow you to take full advantage of technology, and be relentless in your pursuit of OEMs that need your services. It is a high risk, high reward adventure, but I find when we narrow our concentration, we become more empowered. We are no longer chasing a moving target, and now we can concentrate our resources and energy on being the absolute best manufacturing partner to our customers. We no longer assemble boards with no real understanding of its’ application. We now can spend the necessary time it takes to learn more about its’ purpose and our customer’s challenges. We become more valuable to them through our knowledge and active participation in the evolution of the product.
Thanks for your time.