ISSUES AND CHALLENGES IN THE ELECTRONICS MANUFACTURING SERVICES INDUSTRY

by Derrick Corea Technosoft Innovations, Inc

Over the past few decades, strategic outsourcing has established itself as a powerful force in North American business. Almost every business element from human resources to accounting to information technology to manufacturing is a candidate for strategic outsourcing. The electronics manufacturing services industry has been the prime beneficiary of the leap to strategic outsourcing.

ELECTRONICS MANUFACTURING SERVICES has flewed from board stuffers (consigned parts) to contract manufacturers (buying parts and assembling them). Today, many companies offer an range of services, including product design and build.

However, the ELECTRONICS MANUFACTURING SERVICES industry does face some issues and challenges.

Let’s first discuss, shrinking operating margins. As global competition and new advances drive prices down, companies must do whatever is necessary to survive, including constantly becoming and remaining more cost-efficient in order to stay profitable.

Another challenge for firms is investment in the operations and management of global manufacturing processes. This investment comes with inherent risks. Electronics manufacturing services use this capacity and operations on an as-needed basis, so the risk scale

Companies must balance external and internal resources yet remain within international ethics. Traceability and compliance problems are adding to operational burdens. Components and sub-components may travel across several continents before they arrive at the end-consumer.

Over the years, very few new sources have been added to the ways ELECTRONICS MANUFACTURING SERVICES companies generate income. The issue here is the constant cost reductions OElectronics manufacturing services demand, negatively impacting providers’ profit margins within certain business lines.

The trend toward short product lifecycles is critically affecting the ELECTRONICS MANUFACTURING SERVICES industry. Consumer preferences change day-to-day, requiring ELECTRONICS MANUFACTURING SERVICES companies to maintain fast and effective New Product Introduction processes. The product needs to launch on time, at the right volume, price and quality. Closed-loop communication among the various segments—sales, manufacturing, and engineering—is necessary. Closed-loop communication ensures that the sender knows the receiver has heard and understands the instructions.

New regulations and standards require companies to become more accountable for Corporate Social Responsibility in decisions. The new hot topic for the day is Electronic Waste. E-waste describes discarded electrical or electronic devices. Used electronics not destined for reuse, resale, salvage, recycling or disposal are also considered as e-waste. Companies are being forced to take the entire product lifecycle into account.

Undefined request for products closely affects the provider. Companies must deal with a instable economy and variable demand resulting in fluctuations in production. Consumers want what they want when they want it, spiking demand for a certain product. In today’s business world, a company must be resourceful in lean times and ready to strike when the iron is hot. Inventory must keep up with demand.

Electronics Design Services

Location, location, you hear in buying and selling real estate. For the ELECTRONICS MANUFACTURING SERVICES firm, too, location is key to profitability, supply chains, scheduling, staffing, and business success. Winning a contract on a Request for Proposal may depend on the location of the plant. Since ELECTRONICS MANUFACTURING SERVICES companies are at the mercy of the Electronics manufacturing services with regard to relocation, location is a very important consideration and a lasting one.

ELECTRONICS MANUFACTURING SERVICES providers’ aiming of the motorized, medical device, and industrial product sectors has been something of a failure as is shown by these statistics: 12% in 2007, increasing to 15% by 2012.

Rapid growth itself can cause growing pains. The industry is strong and can survive its problelectronics manufacturing services.