Contract Manufacturing A quarter century of CEM


In the 25 years since Prism Electronics was founded, much has changed in the world of the contract electronic manufacturer (CEM) but even in this fast- moving business sector, there’s also much that has stayed the same. David Aspinall, managing director and founder of Prism has seen it all! Here he shares his view of the trends and developments that have shaped the CEM business over the last quarter century


W


hen Prism started trading in 1991, the business landscape was very different: it was the


middle of financial recession, the Gulf war had just started, bank rates were at 14 per cent and inflation was nine per cent. Britain was also suffering a loss of political interest in UK manufacturing as government focus and favours moved to the service sector. Today, interest rates are the lowest they have been for decades, and the UK once again has aspirations to be a strong force in high-tech manufacturing.


A development that to some extent parallels the wane and wax of enthusiasm for British industry is the rise and fall of offshore manufacturing, the popularity of which peaked in the first decade of this century. In an attempt to save money, particularly on large batches, CEM customers shifted their business to far- flung places like China and India. The anticipated savings were, however, often eroded by the costs of doing business offshore: freight and travel costs, miscommunication, differences in values and quality requirements, time-zone discrepancies and language barriers. Regulations and standards increasingly constrain the choice of components and manufacturing technologies. In contrast with a much more relaxed and loosely regulated market 25 years ago, today only those suppliers that observe these


requirements and take the time and trouble to keep up to date with them can provide the assurances customers need. The result is that there is currently much


more interest in on-shoring than there is in moving business offshore. Even though we are now living in a ‘global village’, customers still value the convenience of local business connections and see the benefits of being able to meet up with their CEM provider easily and whenever they have a need to do so. Of course, it’s not only the business climate that has changed radically over the last 25 years, electronic technology has also changed dramatically. In the early 1990s, multi-layer boards were still considered high tech, and automation in assembly was largely reserved for consumer volume products. Surface mount technology was something of a novelty and the typical components from that era seem positively gargantuan compared with today’s 0201 and 01005 devices. Over the intervening years, boards have become ever more compact as well as ever more complex. Fortunately, manufacturing technologies have evolved to cope. For example, the latest pick-and-place machines, like the Mycronic machines Prism use, are easily able to place components in multiple package styles, from the tiniest chips to large high pin- count devices, accurately and at very high speeds. These sophisticated machines also


offer integrated component inspection to ensure that work is always carried out to the very highest of standards. Two crucial developments that have both technological and business aspects are diminishing batch sizes and a reduction in forward ordering. In the 1990s, many CEM customers would place orders well in advance and call the products off against a schedule, which made planning relatively easy. Customers would often commit to what today would be considered as quite large batches, as they were prepared to hold stock of their finished products. Now customers rarely hold much stock and expect flexibility with fast deliveries on any size of order, right down to “batch size 1”. Even for the smallest batches, they expect the same quality and competitive pricing that they get on their largest orders. Successful CEMs like Prism have had to evolve to meet these needs by using assembly technology that minimises changeover time and by implementing MES systems that boost productivity. Such changes reflect the wider rise of lean manufacturing philosophies and a demand for waste reduction. Prism now enjoys the benefits of being an early adopter of such techniques.


When it comes to meeting customer


requirements, it’s not all about manufacturing philosophy and technology. Effective communication plays an essential role as it always has, but these days the communication channels have changed. Receipt of printed manufacturing data packs by post, once the norm, has been displaced by the now ubiquitous electronic communications, removing delay and largely eliminating manual data entry with its opportunities for error. Customers have developed much shorter project cycles and, thanks to the wonders of high-speed broadband permeating every area of their lives they, with some justification, expect instant results and immediate feedback. When used properly, this faster communication enhances the business relationship for both the customer and the CEM. But what about the things that haven’t


16 October 2017 Components in Electronics


changed over the last quarter century? Quality manufacturing, trust, an understanding of what the customer really needs versus what they may initially request – all of these are still paramount. These values have been championed by Prism since the day the company was formed, and they’re still at the heart of everything it does. They are unquestionably the values that make the difference between a good CEM and an outstanding CEM. Even when customer requirements change, perhaps several times throughout the lifecycle of the project, an understanding CEM will remain professional and advise their customers of the best course of action to support those changes. Maintaining a good working relationship, even if – and especially if – the project is not going according to plan, is crucial. Customers have always prioritised flexibility and responsiveness to deal with the unexpected and they always will, which is why Prism gives particular attention to these aspects of its business. Full traceability is now an everyday


requirement; there is now an expectation from the customer that manufacturers can trace a product back and provide comprehensive information about its manufacturing and test history. Software systems make this level of accountability possible, which was something that commercial CEM customers – as opposed to those who could afford to pay premium military prices – could only have dreamed of in 1991! It’s very interesting to look back over the last two-and-a-half decades and note how much has changed in some areas of the CEM world, and how little has changed in other areas. It’s even more interesting to look forward, in the expectation that the demand for high quality PCBs and products will continue to rise. So if the last 25 years have been an interesting and sometimes bumpy ride, the coming years are likely to be an even more spectacular journey but the rewards will be great for those CEMs that get it right and, of course, for their customers!


www.prism-electronics.com www.cieonline.co.uk


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