FEATURE EMS & PRODUCT DESIGN A CHANGE
OF CIRCUITRY The developing face of outsourcing
Words by John Johnston, NPI director, Chemigraphic T
he global electronics contract manufacturing and design services market is growing at a very healthy rate. In 2018, it was valued at $391 billion and it is predicted to grow at a compound annual growth rate (CAGR) of 7.9 per cent from 2019 to 2025. At a time when OEMs look to gain agility and responsiveness, by avoiding the need to maintain large-scale industrial operations, this growth is being driven by quality EMS providers providing assets such as industrial design expertise and investment in the latest connected technology, as well as a whole range of value-added services such as design, engineering, warranties, repairs and returns handling. In terms of the sectors that will drive this EMS growth, it’s worth first considering the current state of play. The dominance of IT and telecommunications is largely the result of the proliferation of tablets and smartphones. But growth is not expected from this quarter. Key growth areas expected to steal market share include medical, automotive, aerospace and defence. Let’s just quickly review medical. New
technology is opening out a brave world of devices, such as medical wearables and even invisible hardware. Add to this the trend for patients to be more in control of their care, and it’s clear why we are seeing an increased demand for advances in this field. As the manufacture of these devices calls for sophisticated technology and strict regulatory compliance, outsourced manufacturing enables OEMs to accelerate R&D, and reduce the cost of devices, to gain a competitive advantage. But it’s not just about manufacturing: it’s about design and a whole lot more. OEMs are using EMS providers to develop and manufacture wearables that require expertise in design, connectivity, among other important areas.
12 OCTOBER 2019 | ELECTRONICS Related to this is a predicted shift from
the EMS sector being characterised by manufacturing, to the rise of design and engineering services, as OEMs are inclined to focus increasingly on marketing and sales, rather than R&D, prototyping, design and NPI.
TRENDS TO LOOK OUT FOR OVER THE NEXT DECADE Investment in technology and Industry 4.0 will be winning factors. Without a doubt, the willingness to invest in new manufacturing technologies will determine which UK EMS providers win new clients. But, there’s more to this than new concepts. Increasingly, Industry 4.0, and even Industry 5.0, will offer competitive advantages to those who add advancements in communication and connectivity to their technology. Digitisation allows EMS providers to respond more effectively and efficiently to customer needs because it adds the capabilities of automation and connected data to the manufacturing processes, providing greater productivity, a more efficient use of resources and improved quality control. Supply chain management will remain critical. Much will change in the next few years, but some things will stay the same. Take the components shortage that has affected the supply of semiconductors and passive components to the UK. The instigation of product allocation and product obsolescence will be major factors that push OEMs to rely on their supply chain knowledge and the experience of EMS partners.
John Johnston, NPI director, Chemigraphic
“ As the manufacture of these devices calls for sophisticated technology...outsourced manufacturing enables OEMs to accelerate R&D, and reduce the cost of devices, to gain a competitive advantage”
The consumer market has already embraced personalised goods – and the industrial electronics sector will soon follow. This means that OEMs will increasingly demand different material finishes, branding options, software configurations, add-ons, plug-ins, ancillary items and language options. Connected, data-driven tech will prove crucial to meet this demand, but so too will an agile supply chain. Orders triggered by client demand will be automatically sent to suppliers and delivered within the hour. In addition, the EMS provider will no longer process, pack and re-locate large orders of stock. Instead the supply chain partners will take responsibility for this service and deliver smaller batches more frequently. There’ll be a need for just-in-time supply. Additive manufacturing will also aid such personalisation, deployed throughout the assembly and test processes to produce jigs on-demand, along with any bespoke tools needed. Finally, an organised, sophisticated operation requires awareness from manufacturers. Data and dashboard technology will not only connect the production process, but also procurement operations. In fact, it will connect everything from prototyping to the entire life cycle of a product. Smart tracking and barcoding will allow deliveries to be monitored in real-time, while the products themselves, such as the PCBs, will carry accessible information such as their part number and revision level, as well as every detail of the manufacturing steps, operators responsible and component traceability records. These can be stored in the cloud, accessible to anyone with permission, should the information be needed later on.
Chemigraphic
www.chemigraphic.co.uk / ELECTRONICS
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