1. EMS/ODM prices are converging.
IMPLICATION: For the OEM, using an ODM model historically delivered a cost benefit over an EMS. This is no longer true because costs have been driven up by OEM demands. If you are depending on an ODM model you should be actively exploring other options.
2. Regionalization is gaining momentum.
IMPLICATION: More OEMs are designing a supply solution where they build in the region for the region. Are you?
3. Global capacity utilization is increasing
IMPLICATION: Our data shows dramatic reduction in the global supply of EMS capacity. What happens when demand exceeds supply?
4. Labor costs in China are rising far faster than anyone predicted 5 years ago.
IMPLICATION: Does that mean you should exit China immediately? Knee-jerk reactions rarely pay off.
5. Slower Rate of Growth of Electronics Outsourcing
IMPLICATION: Finally the industry is realizing that one size does not fit all; EMS and OEM companies must find new sources of value in the outsourcing relationship. Many OEMs are reconsidering their entire supply solution to mitigate risk and reduce cost.
Attend the EMS industry’s Most Important Event of 2012 to learn how to navigate these critical trends to optimize your outsourcing solution.
Our last Outsourcing Navigator Council members meeting was a two-day event hosted by member company, Teradyne at their corporate facilities outside Boston in May.