Editor's Note: This article originally appeared in the December 2012 issue of SMT Magazine.
Today, more than ever, OEMs are required to get new electronics products to market faster while continuing to improve profit margins. While this is especially true for consumer products, in every market, manufacturers are also dealing with pressure to reduce costs. The ever-increasing need to simultaneously balance top-line growth and manage cost savings underscores the idea that speed is critical to competitiveness. Constant pressure to achieve competitiveness can be seen in a number of trends affecting new product development and supply chain optimization--key parts of the equation. It is critical that innovation occurs, with the end game in mind, throughout every step of the process, from design to production to logistics to supply chain management and beyond, considering requirements for aftermarket services.
New Product Development
To convert innovative thinking into a real product requires an incubation period during which a product goes through different phases of validations: Engineering, design, product, and low-volume manufacturing. It is then, at the very beginning, that the entire life cycle of a product must be considered. It is also essential, at that time, to have a fast, turnkey solution for components, along with plastics and mechanicals and anything else is required.
OEMs have increasingly come to rely on EMS companies that can provide end-to-end solutions to help improve innovation, cost reductions, quality, and, most importantly, time-to-market. All of these factors come together initially in the new product development process. One of the most significant trends is the OEM’s desire to shorten the product development process. OEMs are looking to address this issue by reducing the physical distance between design engineers and the development and build team, which is often a function of an EMS provider. This proximity enables the OEM’s new product design, leadership, and marketing teams to shorten the time they spend in travel, communications, and the approval process. It also allows them to more closely monitor the security and protection of intellectual property.
For instance, a great percentage of electronics OEMs have their design teams in California’s Silicon Valley. Companies that may have once expected to conduct new product introduction (NPI) in a low-cost region in another part of the world are now looking for those services in Silicon Valley. Not surprisingly, each only wants to entrust its new products and proprietary technologies to a great EMS partner, one with superior and modern equipment, the best test lab facilities, and the most exceptional people, all in one location. OEMs want the ability to safeguard their new products with state-of-the-art lockdown security and complete confidentiality.