EMS and ODM industry turns full circle
09 January 2012
The next five years will witness a significant change in original equipment manufacturers´ (OEMs´) perception of their contract manufacturers.
That’s according to Companies and Markets who go on to say that the market is expected to witness increasing impetus from OEMs to create a meaningful partnership with electronics manufacturing service (EMS) providers and original design manufacturers (ODMs). Increased collaboration, visibility, and open communication will be key to creating greater synergy between OEM - contract manufacturer partnership.
The rapidly changing business environment – economic changes, globalisation, and diminishing product cycles – will lead to unprecedented increases in responsibilities for EMS providers and ODMs. This will include increasing ownership of design support, complete manufacturing and supply chain operations, and consulting services.
With technology and product innovation becoming vital for success, OEMs will be burdened with decreasing barriers to entry and increasing competition. This will increase OEM reliance on contract manufacturers. Cost effectiveness and return on investment (ROI) will continue to remain the primary drivers for outsourcing. However, OEM perception will evolve from a single-minded focus on pricing to a well-rounded analysis on total cost of ownership in all end verticals.
Technology partnerships that cater to emerging high-tech product innovation will be on the rise. Product innovations will propel EMS and ODM growth in consumer electronics, telecom, and computing. Product design will remain crucial for OEM differentiation. As a result, the EMS role in design for manufacture (DFM) and test support is expected to leapfrog in the next 10 years.
EMS providers and ODMs are striving for more collaborative partnerships to develop new products. Being a trusted partner will allow contract manufacturers to be more integrated with their clients and a true extension of the customers operations, thus improving ROI, manufacturing, and new product designs.
EMS providers and ODMs alike will transform their business operations to respond effectively to change (in terms of demand fluctuations, product innovations). The evolving business model will be transparent, agile, and responsive to proactively adhere to demands of dynamic business environment.
Related Articles...
Most Viewed Articles...