Susan Mucha
No single “right” answer exists, but the right system will reduce cost and align with customer requirements.

One of the most positive trends I’ve seen in the electronics manufacturing services industry over the past five years is the permeation of ERP, shop-floor control and related systems that truly do let businesses work smarter, even in small, one-site companies. I see this as a huge positive because the complexity of information that must be managed on a day-to-day basis continues to grow.

Several factors are driving this trend. First, the EMS segment has become dominant in electronics production, so most software development firms are incorporating modules customized to the EMS business model, and there is enough competition that affordable systems are available at all tiers. Second, OEMs expect any EMS company they use to be able to link with their systems and provide a full-service manufacturing solution. Third, lead-time and response expectations drive a need for real-time visibility and exception-based systems. Finally, cost and availability of working capital continue to drive Lean inventories and overhead staff.

Years ago, adding a new ERP system was a 12- to 18-month process with packs of consultants analyzing business processes and tweaking software for months before and often after the system went live. Unfortunately, ERP system implementations also provided a good look at which people understood the core processes related to their jobs and which just knew which sequence of screens they needed to follow to do their work. Because of the cost and pain, companies often chose to maintain legacy systems by having IT personnel writing their own code to keep things relevant. Other companies bought core systems and then customized using internal personnel. The quality of the outcome in these proprietary systems was mixed. Companies that focused on patching a legacy system tend to be less efficient than companies developing exception-based systems designed to help their employees better acquire and manage required data. Shop floor control systems saw a similar evolution.

Today, software as a service (SaaS) systems have made it easier for smaller EMS firms to move to higher-end ERP, MRP and/or shop-floor control systems, but the catch is that rapid growth can create sticker shock for companies going this route.

In systems strategy, there isn’t one right answer. A company with highly efficient processes and an IT department developing complementary proprietary systems runs as well as a company with the most up-to-date off-the-shelf systems. The real key to determining whether a systems strategy is a competitive differentiator is how well the systems help reduce cost and align with customer requirements. Some key issues a good systems strategy should address include:

Good systems pay for themselves many times over, and the skill with which these systems are deployed is often a point of differentiation and competitive advantage. Aligning systems with processes in ways that help employees work smarter and deliver better value to customers is becoming common practice at all levels in EMS.

Susan Mucha is president of Powell-Mucha Consulting Inc. (, a consulting firm providing strategic planning, training and market positioning support to EMS companies, and author of Find It. Book It. Grow It. A Robust Process for Account Acquisition in Electronics Manufacturing Services; This email address is being protected from spambots. You need JavaScript enabled to view it..

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