Electronic manufacturing services or EMS is a relatively new term for the service of manufacturing electronic components and assemblies by using advanced materials, automated processes, and other production techniques.
Why is it great to outsource electronic manufacturing services?
Access to Sophisticated Technologies
Using an EMS provider grants access to advanced manufacturing technologies and equipment that would be too costly for many companies to invest in themselves. EMS companies make large investments in the latest and greatest equipment, assembly processes, and quality control systems. They have expertise in implementing cutting-edge, automated equipment across their global facilities.
For example, advanced SMT equipment for ultra-fine pitch components, high-speed 3D AOI inspection systems, or highly flexible chip shooters capable of 01005 components. EMS providers also pioneer innovations like lights-out manufacturing, reducing the need for human operators on production lines. Their scale and focus as manufacturing specialists means EMS companies adopt new technologies much faster than OEMs could on their own.
Partnering with an EMS provider gives access to their expertise and investments in advanced assembly, test, quality, and other manufacturing technologies. OEMs can leverage sophisticated capabilities and production innovations, without enduring the risk, cost, and learning curve themselves. This accelerates speed, quality, and keeps costs low.
Reduced Risk
Working with an EMS provider reduces risk for OEMs in several key ways:
- Avoid capital investment – Manufacturing requires major capital investment in facilities, equipment, and labor. OEMs avoid needing to allocate large amounts of capital when partnering with an EMS provider that already has invested in manufacturing capabilities. This also reduces the risk of over-investing in unused capacity.
- Leverage EMS experience – Experienced EMS providers have extensive knowledge of running efficient manufacturing operations and supply chains gained from working with many customers across industries. OEMs can tap into this experience and expertise rather than needing to build it internally, which reduces operational risk.
- Shift risk – EMS providers are responsible for maintaining their manufacturing capabilities and capacity. If demand fluctuates or products change, the risk sits with the EMS provider rather than the OEM. The EMS provider handles staffing, equipment maintenance and upgrades, facilities, and other operational risks and costs.
- Business continuity – Relying on an external manufacturing services provider reduces the risk of business disruption. If an OEM’s own facilities experience man-made or natural disasters, strikes, equipment issues, or other disruptions, the EMS provider offers an alternative production source.
- Regulatory compliance – Keeping up with regulatory, environmental, and legal compliance across global markets is complex and risky. EMS providers maintain rigorous compliance across their facilities and processes, which OEMs can leverage.
Partnering with an experienced EMS provider significantly reduces an OEM’s exposure to the risks inherent in manufacturing their products. The EMS provider handles much of the capital investment, builds robust processes and controls, and assumes responsibility for operations and compliance.
Enhanced Supply Chain
Original equipment manufacturers (OEMs) can leverage the supply chain expertise and relationships of electronic manufacturing services providers to improve their supply chain operations.
EMS providers have extensive experience managing complex global supply chains. They develop close partnerships with component suppliers and contract manufacturers around the world. This gives them significant buying power and influence in the electronics supply chain.
By outsourcing manufacturing to an EMS provider, an OEM gains access to these valuable supply chain networks and capabilities. The EMS can leverage its scale and connections to obtain better pricing, ensure component availability, and mitigate supply chain disruptions.
For example, when a component goes end-of-life, an EMS has alternate sources ready in its qualified vendor list. It can swiftly switch suppliers to avoid production delays for the OEM. The EMS supply chain team manages the entire transition.
The EMS also monitors markets and supplier performance globally. This gives them early visibility into potential supply chain risks. Their expertise in supply chain management and relationships with vendors helps OEMs prevent supply chain disruptions.
All in all, the supply chain expertise of EMS providers reduces risks and costs while improving quality and responsiveness for OEMs. Outsourcing enables OEMs to leverage the economies of scale of a dedicated supply chain organization. This ultimately yields more resilient, flexible, cost-effective, and efficient supply chain operations.
International Market Access
One of the major benefits of partnering with an EMS provider is gaining access to global markets for your products. Most large EMS companies have an international presence, with manufacturing and engineering facilities located worldwide. This global footprint allows them to build and ship products efficiently to customers in different regions.
For companies looking to expand internationally, working with an EMS provider that has facilities in target market countries can be invaluable. The EMS partner likely already has established channels for importing components and exporting finished goods in those nations. They handle customs, duties, local regulations, and other complexities of shipping products globally.
Rather than having to invest in your manufacturing sites across the world, you can leverage the EMS provider’s infrastructure. This makes it faster and easier to serve new geographic markets. You get to take advantage of their expertise in international shipping, local labor regulations, import/export laws, and global supply chain management. Expanding globally with an experienced EMS company as a partner reduces risks and headaches.
