Evolution postponed
09 May 2011
The contract manufacturing business is all about service. If the customer gets what they are want - traditionally in terms of cost, quality and delivery times - then that is good service. However, these days other parameters are emerging that are redefining ‘good service’.
EMS companies, and the role they occupy in the supply chain, are always in an evolving state – companies that stand still in this sector will soon get overtaken and left behind. My thoughts turned to this this week after receiving the following announcement from a mid-sized EMS provider who has facilities in the UK and Czech Republic.
It concerns the company’s Postponement Manufacturing Services which is aimed at helping customers meet their demand forecasting challenges.
Postponement manufacturing is a sophisticated supply chain service that enables The Paragon Electronics Group to provide customers with late-stage configuration of products specific to a particular order or end user. For OEM customers with highly configurable products, late stage configuration and postponement techniques can alleviate demand forecasting challenges. By postponing final product assembly until customer demand is clearly defined, Paragon extends OEM’s capacity to customise and differentiate products. In turn, this enables OEMs to react rapidly and more effectively to opportunities as they arise.
Group Managing Director, John Mayes, commented: “Effective supply chain management is key to success in today’s evolving electronics manufacturing industry. Postponement manufacturing provides a highly valuable solution to OEMs looking to meet the challenges of demand forecasting. However, it does necessitate a high degree of collaboration and visibility throughout the supply chain, so it can prove daunting for manufacturers to manage in house. Here at Paragon, not only do we have extensive supply chain capabilities, but we also have an end-to-end manufacturing offering delivered through our group manufacturing facilities in the UK and Czech Republic. We therefore have the expertise, resources and footprint necessary to execute postponement manufacturing successfully for our customers. This is particularly attractive to our UK and US customers who wish to take advantage of JJS’ Central European manufacturing facility, as an agile gateway into Europe.”
Postponement manufacturing at JJS Electronics (a Paragon Group company) works alongside its configure-to-order (C.T.O.) service. This is where the company manufactures a generic version of the customer’s product up to an ‘embryo’ level which is then held in inventory, awaiting further instructions. Once customer demand is known, the final product is configured and packaged to order. The final assembly stage involves configuring specified options, accessories, ‘country kits,’ packaging and instruction manuals. The final step of this process is shipment, which the JJS team also undertakes, delivering products direct to its customers’ customers.
An evolutionary service rather than a revolutionary one then, and I suspect that it will suit some product types better than others, but an interesting development from a company who is clearly trying to keep ahead of the game.
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