electronicsolutions

The manufacturing industry partners with several companies when working on producing a product. It becomes tedious, and expensive and requires the management of too many resources for a manufacturing company to have all the departments in-house. Therefore to avoid managing a massive inventory and manpower, certain aspects of manufacturing are outsourced or as we like to say involving “partners” for manufacturing. These partners can be OEMs, CEMs, ECMs, ODMs, CMs and EMS. Here’s  How do you choose your service provider? Before we move to understand the relevance of EMS in manufacturing let’s take a look at other commonly used acronyms. Some terms used related to manufacturing are OEM, CEM, ECM, ODM, CM and EMS, each of which provide different services which at times are used interchangeably. However, at times, a combination of their services may also be used by manufacturers. In manufacturing, knowing which manufacturer to turn to depending on their speciality and your product is important. These providers can produce, manufacture, contract or source and procure specific components providing service and solutions for you to deliver your product. (i) Original Equipment Manufacturers(OEM) Original Equipment Manufacturers(OEM) produce certain or all components required for other companies to build their product and sell their finished items/goods to their customers. In other words, an OEM sells its parts/components to manufacturers who assemble them with several other parts/components to roll out a finished product. OEMs may focus on investing their time and resources on R&D and regularly work on innovating their products/components. OEM majorly focusses on B2B sales, although there has been a recent increase in customers building their own products(DIY  projects) and purchasing OEMs from distributors. The manufacturers also find it beneficial as the OEM usually provides warranty for the product and service is provided for a limited period of time. An OEM refers to components/parts made specifically for the original product (designed and developed for). On the other hand, the ‘aftermarket’ refers to the equipment made by some other company that a consumer may use as a replacement. (ii) CEM or Contract Electronics Manufacturer CEMs or Contract Electronics Manufacturers are companies that are outsourced by companies to make electronic products for them. The CEMs usually serve sectors like communication, medicine, defence, computer industries and transportation. They specialise in PCBA (printed circuit board assembly) and electro-mechanical services. They also provide design services to create electrical parts (they design, test and develop these parts)  used by OEMs and usually rebranded with the buyer’s logo. A CEM provides customers with the expertise in industry-standard, certifications required and regulations to be followed and uses advanced technologies. Thus, they would have an excellent and reliable supply chain to ensure a smooth flow in manufacturing. They are also known by another acronym which is ECM (Electronics Contract Manufacturing). (Iii)Contract Manufacturing(CM)​ CEMs or Contract Electronics Manufacturers are companies that are outsourced by companies to make electronic products for them. The CEMs usually serve sectors like communication, medicine, defence, computer industries and transportation. They specialise in PCBA (printed circuit board assembly) and electro-mechanical services. They also provide design services to create electrical parts (they design, test and develop these parts)  used by OEMs and usually rebranded with the buyer’s logo. A CEM provides customers with the expertise in industry-standard, certifications required and regulations to be followed and uses advanced technologies. Thus, they would have an excellent and reliable supply chain to ensure a smooth flow in manufacturing. They are also known by another acronym which is ECM (Electronics Contract Manufacturing). (iii)Original Design manufacturer(ODM) The manufacturer designs and produces products which are a part of a product or are rebranded and sold under another company’s name. Original Design Manufacturer (ODM) as the name suggests in actuality design, develop and own the IP (intellectual property) for the product which they can put out in the market, sell to a buyer(s) or as a white label product (a product sold under names of several buyers). Thus, the buyer usually chooses an ODM when they are looking for a finished product which is generic and not usually completely customised. The buyer looks for ‘private labelling’ where he chooses an existing product, might make a few changes and sell it under their brand name. (iii)Electronics manufacturing Service(EMS) OEMs or manufacturers often outsource a section or the entire process of procuring and/or manufacturing components (electronic components) required for the end product. Instead, they utilise their time and resources to focus on their core competencies such as research and developing their product and plan strategies for selling the product.  An EMS (Electronics Manufacturing Service) provider has a network of suppliers and vendors (or as we at Ark Circuitry call them as ‘partners’) who they have a longstanding relationship and thus are capable to procuring a wide range of products and since the partners understand the business, they would be able to cope with the peaks and troughs in demands. When this is possible it means that the EMS provider has an efficient and excellent supply chain. Why do OEMs choose EMS providers to procure all the necessary material on their behalf? Simple because it makes financial sense, i.e. the OEM doesn’t have to manage a procurement team as the EMS provider can carry out the operation at a much lesser cost. The Chartered Institute of Logistics & Transport UK (2019) defines ‘supply chain’ as: “Getting the Right product, in the Right quantity, in the Right condition, at the Right place, at the Right time, to the Right customer, at the Right price.” This definition is quite fitting for EMS providers. A good EMS provider will have the capability to provide manufacturers with a wide range of customised services that will deliver end-user solutions. Their services may include and not limited to (i) Electronic design & engineering (ii) Electronic assembly (iii) Electric manufacturing (iv) Electro-mechanical services, etc.  In order to be able to do so, the EMS provider must have excellent supply chain management, a network of suppliers and a well-experienced procurement team/member to be able to deliver