Choosing an EMS Supplier - Look for PLM

So, you are OEM and are seeking an EMS company to assemble your (1) printed circuit boards, (2) wire/cable harnessing, and/or (3) box builds.

Whether you are an engineer or a purchasing director, it's not always easy to find and select an EMS company that's right for your outsourcing projects. Are quality and on-time delivery of high importance to you? Maybe engineering design and quick-turn prototype services top your list, or perhaps, you are more interested in capacity and VIP attention to your projects. If you're like most OEM's, you want all of these and more. This article will examine the benefits of Product Lifecycle Management (PLM), as well as several other traits that are often overlooked and are vital for an OEM/EMS long-term partnership.

Seek Product Lifecycle Management (PLM) skills
EMS suppliers operate within an OEM's Product Lifecycle. Whether an OEM offers one product line or many to the marketplace, EMS suppliers need to understand and be fully in-tune of where your product resides in the product lifecycle stage. If they're not, engineering changes could take longer and cost more. Product improvements may never be addressed or suggested. And safety stock programs may not receive the attention they deserve. Therefore, there are numerous benefits to a systematic and organized PLM focus.

First and most important is Design For Manufacturability (DFM). This concept can occur at any point within the product lifecycle; however, it has more value in the design and concept stage. Just as it sounds, DFM is a forward-thinking methodology of designing or redesigning a printed circuit board or wire harness for best practice manufacturing. The focus is on efficient throughput, cost management, and product reliability.

For example, an EMS electronics engineer, in the design stage, can select components for a wire harness using fully-automated equipment verses components where only semi-automated equipment is available. The former reduces costs; that latter increases. Another example is a PCB design that needs to adhere to the products' housing specifications or dimensions for a box enclosure. Some products have parameters or restrictions on overall size, weight, and shape. Here again, an EMS engineer can assist in DFM input to meet proper clearance and space, all the while, focusing on cost management.

Once a design is completed, the EMS supplier will build several prototypes for validation and research studies. The OEM engineer performs tests for functionality, reliability, and durability. If there are any design modifications, engineers discuss these changes using DFM, and once again, prototypes are assembled to validate the changes. This process may repeat numerous times before moving the project into the pilot or the production stage - depending on the OEM's strategy.

The second benefit to a PLM focus resides in the pilot stage. This is an OEM's program to test the products acceptance in a defined and selected marketplace. For example, 200 units of a diagnostic instrument for automotive repair technicians might be launched and delivered into the Midwest Region. After a specific time period, product managers will visit with the technicians to gather feedback on the products performance and overall functionality. This data is relayed to the OEM's engineers and to the EMS company. Here again, if there are any changes, say to the printed circuit board, final modifications are made. And since the EMS engineer has been involved through-out this project, these adjustments are quick, accurate, and cost effective.

The growth stage is where full attention is turned to advertising strategy and marketing research to increase demand and volumes. The idea is cost reduction for both materials and labor for product manufacturing - this is the third benefit of a PLM focus. When an OEM's product has been launched, accepted, and operated with success in the marketplace, the sales team will seek, often, to forecast demand, usually on an annual basis. This EAU volume forecast is given to the procurement or purchasing manager, which in turn, works with the EMS company. For example, the diagnostic instrument has a forecast EAU's of 2500, 5000, 7500, and 10000. These numbers and range are dependent on many variables such as advertising, competition, and distribution. Once the EMS company has this data, however, they will work with their material supply-base for cost reductions, as well as their own production model to reach economies of scale based on per unit volumes.

Lastly and at some time, an OEM's product reaches market saturation and sales start to decline. This normally begins to surface in the maturity stage as evidence from financial metrics are now indicators to start formalizing options. The decision to extend the life of a product by adding or reducing features will most likely change the design and function of the printed circuit board - using the diagnostic instrument example. Again, an OEM can turn to the EMS supplier for input on cost analysis and assembly design. The fact and beauty that the EMS supplier has been in-tune and involved through-out the initial stages of the PLM, makes the product decline stage that much easier to manage. For instance, the OEM can turn to the EMS supplier for consultation to (1) seek changes that best fit DFM methods, (2) seek changes that offer cost reductions, and/or (3) seek changes and ideas for product extension or next generation.

Don't Compromise
Moreso than ever, OEM's seek and require EMS suppliers to have the repeatability and sustainability factors when it comes to quality, delivery, and service. When evaluating a new EMS supplier, these performance metrics do not fully reveal themselves until after the sale - which can be too late. Reducing costs is a constant theme that rings throughout OEM's; poor EMS project management can hinder and slow this pursuit. That's why it's very important to have the ability, at a certain level, to predict the outcome with a new EMS supplier. Seek an EMS supplier that has the knowledge and experience to operate within your product lifecycle stages - from concept, through growth and maturity, and into revisions/extensions. If their focus is on PLM, performance metrics of quality, delivery, engineering, and customer service should have a high-value and be consistent.

Kurt Hartwig, MBA
Director of Marketing and Sales
Electronic Technologies International, Inc. (ETI)
khartwig@etimfg.com