Strategic Purchasing

EMS Providers Are No Longer Just Board Stuffers

Truth be told, many electronics OEMs would not be in business if it were not for their partnerships with key electronics manufacturing services (EMS) providers.

EMS providers are no longer just "board stuffers," as they were called about 20 years ago. Back then, OEMs would use contract manufacturers to build printed circuit boards, often when the OEM had an unexpected upside in demand for their computers or other products. After the boards were built, they would be shipped to the OEM facilities and the OEM would do its own final system assembly.

But over the years EMS providers earned the trust of OEMs and were awarded more business and responsibilities. EMS providers now not only build printed circuit boards, but entire systems for OEMs, often in global locations for specific markets. Some EMS providers have repair and refurbishment operations for their OEM customers. Others may offer asset recovery and disposition services for products that go obsolete and must be taken from the field to be recycled or scrapped.

Strategic buyers at electronics OEMs often play a part in the choice of EMS providers for their companies. Such buyers are entrusted with evaluating the manufacturing and technological capabilities of the contract manufacturers their companies may use. Sometimes they are involved in the selection, and often they make recommendations concerning which EMS providers are the best match for the OEM.  That job has gotten more difficult over the years as many EMS providers have added to their overall manufacturing and supply chain capabilities.

Some buyers may recommend an EMS provider based on the manufacturer's ability to meet the large-volume requirements of the OEM, if the OEM makes consumer products, computers, cell phones or other high-volume electronics gear. In other cases, an EMS provider’s ability to build high-mix, low-volume custom products that may use a unique technology may be the most important requirement.

Often, the critical issue for buyers is whether an EMS provider can build a product in the right volumes at the same or better quality level as the OEM—and at a lower cost.

In recent years, buyers involved in outsourcing decisions are spending more time evaluating the design and new product introduction services that EMS providers offer. Such services have become more important to many OEMs—especially to startups, which may have an idea for new products but lack the manufacturing expertise and design resources.

Some EMS providers have bolstered their design capabilities and some have large product introduction centers to help OEMs develop new product. They have engineers on staff to help design a product to make sure the product can be efficiently manufactured at a low-cost and still meet technical specifications.

Depending on the provider, services can include advanced engineering, prototyping, test, failure analysis, product transfer and supply chain optimization.  Some large EMS providers offer 3D plastic and metal printers, surface mount technology, X-ray and test equipment and microelectronics packaging and RF technology capabilities.

Many EMS providers offer design for assembly and design for manufacturing services. Such services can identify manufacturability issues before the product goes into volume production.

Of course, the idea of EMS providers offering such services is to win more business and more customers for the provider. If an EMS provider can help design a product, the OEM customer will likely use the provider for volume manufacturing and consider the manufacturer for future new business.

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