2. What is EMS? Page 2
Introduction
The electronics manufacturing services (EMS) market is dynamic, and the demand
for electronic components and outsourced manufacturing services is growing.
The industry is forecast to grow at a compound annual growth rate of 7.5%
between 2018 and 2024, according to market research.
Growing demand for consumer electronics and innovative technological
advancements allows manufacturers to capitalise on current opportunities. With
rising customer demands and the need to control costs, manufacturers may need
to partner with solution providers that offer industry expertise and experience.
As a global leader in high-mix low-volume manufacturing, we see first-hand the
evolution the EMS industry is experiencing and the critical role we play in the
electronics value chain. In this new guide, you’ll learn about the driving factors of
EMS, applications, challenges, and what to consider when outsourcing the
manufacturing of your product.
Let’s dive in...
3. What is EMS? Page 3
Chapters
1
Electronics
Manufacturing
Services
The Dark Side of
Electronics
Manufacturing
Comparing an
OEM to an EMS
Provider
What is High-Mix
Low-Volume
Manufacturing?
Outsourcing
Electronics
Manufacturing
[Future] Electronics
Manufacturing
Trends
2 3
6
5
4
4. What is EMS? Page 4
The core of any electronics manufacturing service offering stems from design,
manufacture, test and distribution. An EMS provider will perform these functions
which may also include full systems assembly for original equipment manufacturers.
For example, offering systems integration or “box build” services - manufacturers
can use a process to combine printed circuit board assemblies, wire harnesses,
fabrication of enclosures, testing and more.
Electronics Manufacturing Services
Overview and Applications
Chapter 1
5. What is EMS? Page 5
The electronics manufacturing industry is broad and spans across government
(aerospace & defence), consumer (smartphones, PC, etc.) and industrial products
(robotics and automation), electronic components (connectors, semiconductors
etc.), and health care (medical devices). As the EMS market continues to grow, four
driving forces can be observed.
Electronics Manufacturing Industry Market Overview
According to Market Research engine, the major driving factors of the Electronics
Manufacturing Services (EMS) market are:
1. Rising demand for automotive electronics - the surge can be credited to the
demand for safety systems.
2. Growing demand for consumer electronics - new analysis from Frost & Sullivan,
finds the growing demand for consumer electronics will increase the outsourcing
trend.
3. Advanced skill and focus on core competencies - companies are searching for
solution providers that provide expertise in their specific field or market sector.
4. Proliferation of mobile devices - (The market for Android devices, iPhones and
wearable technology is continually growing). Cisco’s annual report on mobile traffic
stated, “By 2020, 5.4 billion people around the world will have a phone.”
Automotive Electronics Market to Grow Rapidly due to Rising Demand for
Safety Features
Growing Demand for Consumer Electronics Driving the Outsourcing Trend
in the Electronics Industry
Resources
6. What is EMS? Page 6
Applications in the electronics manufacturing space are broad and diverse. Most
processes can be applied in any industry for use in the global market. As specified, it
includes commercial, industrial and consumer.
Let’s look at a few applications...
Electronics Manufacturing Applications
Medical - Medical OEMs look to their EMS provider to offer not only the best
processes and highest quality standards, but the industry expertise and experience
that can guide new product introductions seamlessly through development.
Industrial - Industrial applications use many technologies in a wide array of
industries. The complete product lifecycle - from scope and specification, through
prototyping and testing, to final assembly, these are services needed to bring a new
product to market.
Aerospace and Defence - Safety critical solutions are needed for peak performance
and high reliability for harsh environment applications. There will be an increased
focus on electrification of aircrafts.
Telecom - Telecommunication and data processing is complex. Support is needed for
various devices themselves, and the network infrastructure underpinning the
technology.
BTG labs, a science-based technology company, shared Typical Applications for
Electronics Manufacturing. BTG Labs’ Surface Analyst™ helps electronics
manufacturers build a product to stand up to elemental threats.
For instance, if a manufacturer needed a way to ensure the protection of their
7. What is EMS? Page 7
circuit boards, their instrument would instantly reveal the cleanliness level of the
surface. In doing so, “it creates a successful bond between the conformal coating
and the circuit boards.”
The manufacturer would cut down on failure and waste while experiencing
successful coatings.
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The terms used in electronics manufacturing are as different as the roles they play.
OEMs - are known as original equipment manufacturers, EMS - electronics
manufacturing services.
For further explanation, Wikipedia defines electronics manufacturing services
(EMS) as a term used for “companies that design, manufacture, test, distribute, and
Comparing an OEM to an EMS Provider
Chapter 2
9. What is EMS? Page 9
provide return/repair services for electronic components and assemblies for original
equipment manufacturers (OEMs). The concept is also referred to as electronics
contract manufacturing (ECM).”
The market segments are commonly divided into Tiers based on their revenue:
Tier 1: >$5 Billion
Tier 2: $500M to $5B
Tier 3: $100M to $500M
Tier 4: <$100M
Continuing on...
Have you ever scrolled through an interesting article and you had to “google” the
acronym because:
1. You never heard of it before or
2. You heard of it, but needed to know its meaning or definition.
Here’s a great list of acronyms regularly used in electronics manufacturing services:
Electronics Manufacturing Acronyms You Need to Know
10. What is EMS? Page 10
Evaluating outsourcing options begins with knowing your core competencies (the
thing you do best). Once you completely understand that aspect, you’ll be able to
partner with a provider that offers more expertise and experience in other areas.
How do you know an EMS Company is right for you?
Ask questions.
The process of selecting an EMS provider can be time-consuming and frustrating. But
if you know the right questions to ask it can be less daunting.
Outsourcing Manufacturing: What You
Need to Know
Chapter 3
11. What is EMS? Page 11
Benefits of Outsourcing Your Electronics Manufacturing
One of the top reasons manufacturing companies outsource and use solution
providers is to lower their costs. OEM’s can focus on research and development while
saving on capital investments. However, another reason is to gain or maintain
competitive advantage by improving speed to market.
What are the other top benefits to outsourcing?
Top 7 Benefits of Outsourcing Your Electronics Manufacturing
1. Converting your fixed costs investments to a variable cost model
2. Risk reduction/mitigation
3. Speed to market
4. Improved productivity
8 Things to Look for in an Electronics Manufacturing Service
5 Questions You Must Ask Your Electronics Manufacturer
How to Begin the process of selecting an EMS Provider
Resources
12. What is EMS? Page 12
How to Determine the Right Fit and Business Partner
TT Electronics Manufacturing Solutions Overview Video from TT Electronics on
Vimeo.
The EMS you choose should tailor their services to meet your needs. They should
see your vision and be willing to work side by side. .
5. EMS providers offer more agility
6. Greater experience and competence in manufacturing processes
7. Much broader and more global supply chain (extension of the global network)
There are over 4,000 EMS providers. Only one is the right fit. They should provide the
structure and support mechanisms of a large manufacturer, with the customised,
intimate approach of a smaller speciality group.
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We discussed the advantages of EMS, but there is always another side to the equation.
What are the Challenges Faced by Electronics
Manufacturing?
1. There is a need for a robust product lifecycle management systems. Without one,
manufacturers could make misinformed decisions that affect a product.
2. Labour costs are increasing
3. There is a need for automation - Ping Qin, Vice President of Marketing, Suzhou RS
Technology Co., Ltd says, “We need automation to deal with tasks that require high
assembly precision and large assembly quantities.” He continues, “Automated
material delivery on production lines is essential. We need automation to replace
manual labour in harsh environments.”
4. Global competition
5. Issues with traceability and compliance
6. Disposal of products (E-Waste) and their impact on the environment
7. Investment in the infrastructure and support systems to manage complex, highly
regulated markets like medical, aerospace, and defence
The challenges are not new, but continue to grow. The integration of the electronics
value chain and advanced technology will help break the barrier.
Challenges and Barriers - the Dark Side of
Electronics Manufacturing
Chapter 4
14. What is EMS? Page 14
A manufacturing environment that is termed “high-mix low-volume” refers to a large
variety of products, often produced in small quantities. The marketadvantages are
two-fold, tailoring to customer demand and lower inventory requirements.
Customers’ expectations are changing for more customised products, which are
transferring manufacturing into high-product-mix-low-volume scenario that puts
more dynamics in the manufacturing systems.
As stated in the Journal of Advanced Manufacturing Systems,
“Competitive advantage in high-mix low-volume manufacturing
environments is driven by the organisation’s ability to effectively plan
resource requirements. As the systems are under transformation stage,
choosing an appropriate high-mix manufacturing strategy along with the
sound tactical thinking is necessary for the 21st century manufacturing
that will confer competitive advantage in cost, quality, delivery,
responsiveness, technology and services.”
Building complex products in small quantities can be a challenge for OEMs. As such,
many choose to outsource high-mix low-volume production to service providers with
more experience or expertise in a particular field. Outsourcing production can
result in less costly errors, free up internal engineering and R&D resources, and
What is High-Mix Low-Volume
Manufacturing
Chapter 5
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enable greater control of finances.
MPO, Medical Product Outsourcing, has a 7 step process to consider when selecting
your EMS supplier: Guide to Outsourcing High-Mix Low-Volume Manufacturing
They agree, “A successful partnership can address the challenges of high-mix
low-volume production while also boosting productivity and reducing costs.”
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National Association of Manufacturers (NAM) states, “Manufacturers have experienced
tremendous growth over the past couple decades, making them more “lean” and
helping them become more competitive globally.”
The electronics sector produces electronic equipment for consumer and industrial
industries. The semiconductor industry has grown to become worth more than $400
billion globally, as of 2017.
This rapidly evolving industry leads us to the top trends or opportunities in the industry.
1. We will continue to seek innovative automation solutions
KUKA understands these growing needs well and is responding fast with new
solutions to make robotic automation in this market easy and cost-effective.
Here’s an example of robotic
automation in the electronics
industry with the KUKA robot KR 3
KUKA - Robots & Automation,
Robotic Automation in the
Electronics Industry | KUKA Talks
Trends, via YouTube
[Future] Electronics Manufacturing Trends
and Opportunities
Chapter 6
17. What is EMS? Page 17
2. Rising demand for consumer electronics in both developed and developing
nations
This will increase the demand for smart electronics. Here is another innovative
technological advancement:
The Robot Revolution: the New Age of Manufacturing
Wall Street Journal, The Robot Revolution: The New Age of Manufacturing |Moving
Upstream, via YouTube
3. There will continue to be the push for more eco-friendly manufacturing
solutions
“Being Green isn’t just for hippies and disaffected Xers any more. As climate
change statistics continue to mount, there’s increasing pressure from all
areas – consumers, businesses, and governments – to look into more
eco-friendly manufacturing solutions. The various carbon cap or carbon
trading plans being implemented are also helping to drive this push.”
source
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4. As an industry, we will develop new methods to produce devices that
consume less energy
According to Pannam Imaging, “Reducing energy consumption is an effective way
to cut costs, leading both businesses and consumers to opt for energy-efficient
electronics. The pressure is on manufacturers to adopt green manufacturing
processes while simultaneously producing electronics that are less expensive to
use thanks to lower energy demands.”
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Conclusion
Electronics manufacturing is fast paced and always evolving. Flexible solution
providers that keep pace with rapid change will continue to experience success
for their customers.
TT Electronics developed an entire global business process founded on the support
of complex high-mix low-volume devices. We are inspired to help solve global
electronics manufacturing challenges from design through fulfillment, for
customers requiring support for their high-reliability products in high-mix low-
volume markets.
Let’s Start a New Project
Together
Get in Touch