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It's no secret that electronics OEMs have become very dependent on electronics manufacturing services (EMS) providers. Most electronics OEMs outsource some if not all of their equipment production to contract manufacturers. EMS providers not only build printed circuit boards, subsystems and entire systems, but they are also involved in new product development, assisting OEM customers with design for manufacturability, design for test and design for supply chain issues. In recent years OEMs have also increasingly relied on their EMS partners to help identify, avoid, manage and mitigate supply chain risk.

At EMS provider Jabil Circuit, managing

supply chain risk is key to the company’s business model and is indicative of how requirements of Jabil’s OEM customers have changed, said Bill Muir, chief operating officer for Jabil.

“Customer expectations of us get 30 | February 2014

Don Hnatyshin, chief procurement officer at Jabil

higher year in and year out at an increasingly rapid rate,” Muir said. “Our engagement model with OEMs has morphed dramatically.” Muir noted that, years ago, Jabil and other EMS providers were basically "contract labor providers", but that now an ideal engagement with an OEM starts at the concept stage and continues through the sourcing and

By forging close relationships with key suppliers, Jabil says that it minimizes supply chain risk for its OEM customers. By James Carbone

manufacturing phases. Jabil manufactures for large global

OEMs, some of which have $20­120 billion of sales per year. Such large companies "have the most sophisticated supply chain organizations that exist on the planet and have some very exact expectations of Jabil”, Muir said. Expectations include faster time to market, reduced lead times and faster fulfillment of customer demand.

These OEMs also have expectations

concerning supply chain risk and want Jabil and other EMS providers to be deeply involved in the management of the supply chain. They want Jabil to "minimize risk and manage the supply chain through all kinds of disruptive events”, including natural disasters such as the 2011 earthquake and tsunami in Japan and flooding in Thailand. “That is a massively different value proposition and engagement model than it was a few short years ago,” said Muir.

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