Partnership Planning
Look for Product Lifestyle Management When Choosing an EMS Supplier
Kurt Hartwig
Whether you’re an engineer or purchasing director at an OEM, it’s not always easy to find an electronics manufacturing service (EMS) company that’s right for outsourcing projects, such as assembling printed circuit boards, wire/cable harnessing or box-building.
Are quality and on-time delivery of high importance to you? Maybe engineering design and quick prototype services top your list. Or, perhaps, you are more interested in capacity and prompt attention to your projects. If you’re like most OEMs, 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 but are vital for an OEM/EMS long-term partnership.
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 with where your product resides in the product lifecycle stage. If 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 components where only semi-automated equipment is available. The former reduces costs; the latter increases them.
Another example is a printed circuit board 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. 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 design modifications, engineers discuss these changes using DFM, and 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 product’s acceptance in a defined and selected marketplace.
For example, 200 units of a diagnostic meter used by repair technicians for the medical device industry might be launched and delivered into the Midwest. 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. Suggested changes are incorporated into the final modifications. Since the EMS engineer has been involved throughout the project, these adjustments are often quick, accurate and cost effective.
The growth stage is where full attention is turned to advertising strategy and marketing research to increase demand and volume.
The third benefit of a PLM focus is cost reduction for materials and labor.
When an OEM’s product has been launched, accepted and operated with success in the marketplace, the sales team often will try to forecast demand, usually on an annual basis.
This estimated annual unit (EAU) volume forecast is given to the procurement or purchasing manager, who in turn works with the EMS company.
For example, the diagnostic instrument has forecast EAUs of 2,500, 5,000, 7,500 and 10,000.
These numbers and ranges are dependent on many variables, such as advertising, competition and distribution. Once the EMS company has this data, it will work with its material supply base for cost reductions, as well as its 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 that the EMS supplier has been in tune and involved throughout 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
More than ever, OEMs seek and require EMS suppliers to have 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 OEMs; poor EMS project management can hinder and slow this pursuit. That’s why it’s 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 its focus is on PLM, performance metrics of quality, delivery, engineering, and customer service should have a high value and be consistent.