The ever-growing need for cost-effective electronics production has led to a boom in the market for outsourced electronics manufacturing services (EMS). Collaboration with contract electronics manufacturers helps original electronics manufacturers (OEMs) avoid costly investments in production infrastructure and staff, as well as enables them to swiftly launch manufacturing.
However, OEMs’ preferences for production outsourcing are constantly evolving due to various factors, including political, economic, and technological developments, as well as changing customer requirements. Read this article to better understand the current outsourcing trends in EMS.
Changing priorities
As mentioned above, financial savings remain a major reason for outsourcing electronics manufacturing. However, unlike past outsourcing practices that significantly prioritized labor costs, the current approach to selecting contract electronics manufacturers considers many other aspects of such collaboration.
Transportation costs, as well as supply chain and logistics flexibility, are now among the paramount factors influencing the choice of an EMS provider. Quality concerns about outsourcing electronics production also make many OEMs careful about their choice of contract manufacturing services.
To ensure consistent production quality, more and more OEMs are looking for specialized EMS providers with significant expertise in certain industries. For instance, Assel, a Poland-based EMS provider with over forty years of experience, boasts particular proficiency in manufacturing medical devices.
Furthermore, to facilitate the launch of new products, OEMs tend to prefer certified contract manufacturers. While such expertise may come at an additional cost, many OEMs value the long-term saving opportunities provided by high-quality services.
Evolving technology
Technological progress in electronic devices manufacturing also dictates new requirements that more and more OEMs have for contract manufacturers. Mostly, they focus on the technological advancement of the production floor and staff competency.
One continuously growing trend is sustainability, as many original equipment manufacturers want to promote their products as more eco-friendly while leveraging the financial benefits of sustainable production.
The growing popularity of miniaturized electronic devices is another trend that makes OEMs prefer cooperation with contract manufacturers capable of supporting the production of such equipment.
Furthermore, collaboration with contract manufacturers who offer assistance in high-mix electronics production has also become a priority for many OEMs seeking more flexible production processes. This allows them to dynamically accommodate their products to changing customers’ demands.
Switch to onshoring and nearshoring
The trends and factors contributing to their evolvement discussed earlier have led to a major shift in electronics manufacturing outsourcing. To ensure that the requirements for technology, quality, and certification of EMS providers are met, as well as the need for more resilient and stable supply chains, OEMs are gradually moving away from offshoring.
Offshoring, which has leveraged considerably low labor costs mainly in Asian countries since the 1960s, is being replaced by onshoring or relying on EMS services based in the OEM’s home country, as well as nearshoring or outsourcing production to countries in geographical proximity. For many Western countries, this has meant a shift to EMS providers located in central and eastern European countries, which offer great technological advancement, comply with globally accepted quality standards, and still provide relatively low labor costs.
Bottom line
The current trends in electronics manufacturing outsourcing reflect a shift towards a more holistic approach, prioritizing not only cost-effectiveness but also quality, technological advancement, sustainability, and supply chain resilience. If you are looking for opportunities to align the outsourcing of your product manufacturing with your long-term goals, visit https://asselems.com/en/offshoring-onshoring-nearshoring-what-do-they-mean-in-electronics-manufacturing-and-what-is-the-current-trend
David Prior
David Prior is the editor of Today News, responsible for the overall editorial strategy. He is an NCTJ-qualified journalist with over 20 years’ experience, and is also editor of the award-winning hyperlocal news title Altrincham Today. His LinkedIn profile is here.
