The document discusses choosing an electronics manufacturing services (EMS) partner and outlines key considerations. It provides an overview of the current EMS market trends, best practices for partner selection, and elements for success. Factors like administrative processes, capabilities, communication, and new product introduction support are important to evaluate. The document also briefly summarizes the history and evolution of the EMS industry.

1. How to Align With The Right EMS Provider

3. Current EMS market trends

4. Best practices on choosing an EMS partner

5. Key elements of success to achieve with an EMS supplier

6. Pro’s and Con’s of EMS outsourcing

9. PCB assembly refers to the attachment of various electronic components onto a bare printed circuit board, plus any test activities performed at this level of assembly

10. PCBA Value

11. The value (cost of goods sold, or COGS) of all material, labor, and overhead associated with an assembled printed circuit board

12. Box (or System) Assembly

13. Box assembly refers to the assembly of one or more printed circuit boards, plus other items such as cable harnesses and enclosures, into a final product (or a largely self-contained electronics assembly that will be embedded into a larger piece of equipment). This also includes any test activities performed at this level

14. Box Assembly Value

15. The value (COGS) of all material, labor, and overhead of the box assembly, not including the value of the assembled PCBs within the box assembly.Source: The Worldwide Electronics Manufacturing Services Market, 4th Edition © 2007 Electronic Trend Publications, Inc.

16. 10/18/2011 5 EMS Market Growth Overview Revenue ($M) Source: The Worldwide Electronics Manufacturing Services Market, 4th Edition © 2007 Electronic Trend Publications, Inc.

17. 10/18/2011 6 EMS Worldwide Market by Region Source: The Worldwide Electronics Manufacturing Services Market, 4th Edition © 2007 Electronic Trend Publications, Inc.

18. 10/18/2011 7 EMS Worldwide Market Industry Segment Source: The Worldwide Electronics Manufacturing Services Market, 4th Edition © 2007 Electronic Trend Publications, Inc.

19. 10/18/2011 8 EMS Worldwide Market Industry Cont… PCBA vs. Box/System Assembly Growth CAGR = 6.5% CAGR = 7.2% Source: The Worldwide Electronics Manufacturing Services Market, 4th Edition © 2007 Electronic Trend Publications, Inc.

20. 10/18/2011 9 EMS Worldwide Market Industry Cont… Total Assembly Value ($) Growth Overview Source: The Worldwide Electronics Manufacturing Services Market, 4th Edition © 2007 Electronic Trend Publications, Inc.

22. EMS suppliers need to be profitable to avoid strategic financial risks

23. All Industry Segments Are Identifying Focus / Niche Strengths

24. (Your Company)focus is on products with a “man-to-machine” interface

25. Mergers & Acquisitions Remain a Primary Strategy for Growth / Market Penetration

28. Quotation accuracy from both the OEM and the EMS provider is essential to avoid unnecessary cost – short and long-term

29. Quality Problems

30. Regular process reviews – i.e. audits, quarterly business reviews, and establish consistent communication channels help prevent quality problems

31. Missing Production & Time-to-Market Requirements

33. Quotation accuracy from both the OEM and the EMS provider is essential to avoid unnecessary cost – short and long-term

34. Quality Success

35. Regular process reviews – i.e. audits, quarterly business reviews, and establish consistent communication channels help maintain solid quality results

36. Meeting Production & Time-to-Market Requirements

38. Identify your outsourcing requirements

39. Determine your cost reduction goals

40. Define your time-to-market plan

41. Establish your after sales support needs

44. Administrative Processes – what is the suppliers order processing, purchasing practices, production planning, communication process?

45. Capabilities and Capacity – does the supplier meet your current and growth, quality, and technological requirements?

46. Engineering Change Order (ECO) Management – can the supplier adequately accommodate your design changes and improvements and balance all the manufacturing processes to meet those needs?

48. Domestic and offshore capabilities

49. Design, prototype, documentation, process development, ECO flexibility, and transition plan to production supportProduct Analysis Process Analysis Product Design Process Design Engineering Change Orders Prototype Build Prod. Line Build Production China China Transition Plan Prototype Test Prod. Eng. Test Production Capacity Test Delivery Logistics Investment Period Revenue Period

51. Inventory management production scheduling functionality

52. A closed-loop system that quickly identifies misalignment and initiates action to correct material and production bottlenecks upon discovery plus incorporates a communications system that notifies the OEM

53. A robust process (software/people/procedures) that generates timely information for immediate action by front-line people

55. Inventory management that accurately tracks and maintains proper communication regarding E&O issues – this prevents substantial materials liability issues when established up front

56. End-of-life / life cycle planning is critical to supporting existing production revisions while the new versions are being implemented to ensure production flow remains steady for both

58. Look at total acquisition cost and not the price alone – BOM, labor, test, after sales service, etc…

59. Leverage materials relationships with together with the EMS supplier to achieve the best price, however, working together to achieve this requires trust and openness – i.e. providing costed BOM’s

60. End-of-life / life cycle planning for the whole product line should be considered when making this decision of who to choose as a “partner” to manage the whole supply chain, manufacturing, and logistics requirements together

61. Look for a long-term partnership rather than a short-term price

64. Processes in place to provide solutions

65. NPI capabilities

66. Domestic vs. offshore solutions

67. Resource planning system / process

68. Cost reduction plan

69. Inventory management processes established

70. Life cycle management plan

73. Printed circuit board assembly (PCBA)

74. System build / final assembly

75. Fulfillment / distribution services

77. 1961 SCI of Alabama was a "contracted manufacturer" for the NASA lunar space program to meet cost reduction initiatives and lead-times to land on the moon10/18/2011 25

79. Primary focus on PCBA for commercial and defense OEM's

80. The vast majority of OEM's did their own PCBA in-house

82. Turnkey solutions begin – labor, materials, and test

83. Outsourcing migration – OEM’s sold off PCBA, PCB fab and other non-core capabilities to CM's

84. Wall Street – CM’s proved to be viable business model

85. Services outsourced – Design, NPI, PCBA, test, materials, system build, end-of-life functions began to be outsourced to CM's

86. End-to-End – CM's begin to provide "end-to-end" global supply chain solutionsStrategic Relationships Emerge

88. 100% turnkey of end-to-end solutions is standard from tier-1 through tier-3

89. All-in-one model is established in tier-1 through tier-3 Suppliers

90. Facilities and equipment are not the main differentiator anymore

91. Cost effective strong relationships are still king!(Your Company) Has Positioned Itself to Support Our Customer’s Future Strategic Needs

92. 10/18/2011 28 Customer Support Structure

93. Customer Focus Team 10/18/2011 29

94. 10/18/2011 30