Printed Circuit Design & Fab Online Magazine - Current Issue

Focus on Business

Know the “whys” behind each clause in the manufacturing agreement.

Partnership is one of the most hackneyed terms in the electronics manufacturing services (EMS) industry. It often gets used to describe business relationships that are anything but partnerships. At the same time, the best EMS relationships actually are partnerships where parties have a symbiotic relationship beneficial for both companies. What drives these different relationships in the same business model? Often the answer is the program manager.

Back when outsourcing was a new concept, the most experienced employees at an original equipment manufacturer (OEM) were assigned the responsibility for the relationship. In many cases, those executives had manufacturing as well as purchasing experience. When demand or allocation surprises occurred, these experienced teams worked together for a good resolution in most cases. Today, contract manufacturing is just one more thing that most OEM purchasing departments source and manage. Buyers may or may not have ample experience managing EMS suppliers, particularly given the volume of turnover in these roles. Less experience translates to a focus on unit price, less ability to understand the impact of errors in forecasting, and difficulty in understanding issues that excess material creates.

Read more: Setting Customer Expectations

Options for fixing your revenue stream.

What are you doing differently this year?

Is your topline growing? Is your slow-moving inventory number shrinking? Are you attracting new clients while defending good existing ones? Is your cash position improving? Or are you stuck in an EMS/OEM mud pit?

Will 2024 be business as usual? Where will you get your inspiration to improve your business, from the inside team you’ve assembled or from an outside third party?

Sometimes inspiration comes from the most unexpected sources. I lack an engineering degree, but am part of a patent. Years ago, I solved a design issue as our time to prove a concept entered the final hours of our quest. The inspiration came from simply looking at my wife’s tiny rock jewelry box and how the lid interfaced with the body of the box. Our engineers were blown away that the head of sales and marketing helped solve this difficult engineering design problem. (For what it’s worth, so was I.)

Read more: The 80/20 Rule

A one-size-fits-all approach can lead clients to your competition.

Recently I had an under-the-slab plumbing leak. I’ve been using a plumber who has deliberately kept his business small for over three decades. He is responsive, but complex jobs often take longer because he doesn’t have all the tools the larger plumbing firms carry in their vans. He also doesn’t have their overhead, so for most jobs he is more cost competitive. I called and he walked me through shutting off the water at the meter because he couldn’t come until the next day. Part of my childhood was spent in Florida, so I applied my post-hurricane water management skills while I was without running water.

Sadly, when he arrived, he was unable to determine the source of the leak. Watching the meter spin, he mentioned it was a big one. He recommended a water leak detection firm. Its voice mailbox was full, however, and said it sometimes took a couple of days for them to return calls. My plumber reassured me he would come back after we found the leak. I got on the computer and found a water leak detection firm that operated 24/7. Fifteen minutes later they were at my house and 30 minutes after that we knew where the leak was. They were able to cut a hole in the wall and cut off the bad pipe so I could have water in the rest of the house. They couldn’t fix the leak until the next day, and it would likely involve more demolition to reroute the pipe, so I had a decision to make.

Focus on Business

Setting Customer Expectations

Follow the Money

The 80/20 Rule

Understanding Your Customers

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