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Editor’s choice


Contracting out for success


Electronics companies can maintain competitiveness and productivity by focusing on their core design skills, and leaving manufacturing and assembly to a contract manufacturer. Steve Marshall of Offshore Electronics explains why


the higher the per-hour output, the greater the strength of the economy. Efficiency at a company level, such as on the factory floor, contributes to higher overall productivity. Since the 2008/2009 recession, the


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UK has struggled to improve its productivity. The Office for National Statistics (ONS) last International comparison in 2016, showed that the UK ranked fifth out of the G7 nations in terms of GDP per hour worked. (Only Japan and Canada were less productive.) UK productivity was 16 per cent below the G7 average – the largest gap since at least 1995. While these statistics are useful


economic indicators, they mean little at an individual company level. From this perspective, productivity is a real-world problem and equates to being as efficient as possible. An electronics company might measure productivity in terms of how many new products it can bring to market, while controlling research, production and wage costs.


PrOductivity hurdlES Many factors can hamper productivity within a company. One is the use of low-skilled workers. Here, any savings made on salary are likely to be offset by a reduction in product quality – or speed of production. This can extend time to market, which is a critical factor for electronics products. Other hurdles include employing


‘specialist’ staff, who hold detailed production knowledge in their heads, and using outdated or inadequate production systems and processes. While seasoned employees are a bonus, their sudden absence, through illness or retirement, leaves a gap that is hard to fill. In the case of


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roductivity is critical to any country’s economic performance. In simple terms,


retirement, their detailed knowledge may be lost permanently. In terms of machinery and


processes, the latest products are made on the latest equipment. There is also an increasing shift towards Industry 4.0 standards such as cloud- based systems or condition-based maintenance (CBM). Companies that lag behind, using manual systems rather than automatic control, for instance, will be at a competitive disadvantage. However, the latest electronics manufacturing equipment can be astronomically expensive. Engaging in an equipment ‘arms race’ with competitors can end up being counter-productive, especially for smaller companies.


cOrE cOMPEtEncE Every company has a core specialism. This is where it adds the most value, and where it makes most sense for its employees to spend their time. This is why a variety of non-core tasks, such as toolmaking, for instance, are often sub- contracted to specialists. Electronics companies are generally


experts in design. They are not always geared up for the complex, expensive task of manufacturing and assembling electronic products, which requires constant investment in the latest machinery. The testing and certification processes needed to put a well- designed product onto the market are similarly challenging. Here, it makes sense to sub-contract


these vital tasks to a Contract Electronics Manufacturer (CEM). A reliable CEM can perform all post-design tasks more efficiently and effectively than a small electronics design house, for instance. In addition, a credible CEM can even help to redesign a product, making it simpler, and cheaper, to manufacture and assemble.


January 2021 Instrumentation Monthly


Core strength


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