|Frost & Sullivan Research Service||Published: 31 Oct 2005|
Latency of Information Flow Decreases the Level of Responsiveness to Customer Demand
It is essential for a supply chain optimization that when something changes the status quo in the supply chain that the same information be shared throughout the chain swiftly. This will provide the supply chain partners the time they need to accommodate this new change. But more often than not, this is not realized. A lot of times, EMS providers and their partners were either given no time to react or given the minimum amount of time needed to react due to information latency. Due to this they loose out on the cost saving that could have been possible.
This challenge can be alleviated with the help of supply chain solution tools. The EMS providers are turning to technology tools that allows near real time information sharing about supply chain forecasting, border status, inventory status, shipment status and logistics data. Most of the tier 1 EMS providers are successful in reducing the latency of information, making their supply chain agile and responsive.
The New Government Legislative, the Restriction of Hazardous Substances (RoHS) Directive, Drives Outsourcing of Supply Chain Processes
With the RoHS directive coming into effect in July 2006, there will be a lot of implications on the OEM behavior. This directive will act a driver that will spur the outsourcing of supply chain operations. There are a lot of aspects to be considered, such as, the need to make sure that the consumption of the leaded components is done on time and also making the new components compliant to the directive. EMS providers are already gearing up their manufacturing processes to meet the directive and making sure that the transition to the lead free parts happens in such a way so as to avoid excess and wastage of noncompliant components in the supply chain. The lead-free process will also incur added expenditure for the new process technology. The conversion to lead-free manufacturing will take a significant effort and OEMs will outsource to avoid being caught in the situation.
The EMS Industry is Expected to Witness a Steady Growth
The market revenues generated for the base year 2004 were $126.00 billion. Frost & Sullivan predicts the market to reach revenues of $320 billion in 2012. The market is expected to grow at the compound annual growth rate (CAGR) of 10.6 percent.
|Benefits of this Service|
Unique Challenges Within the EMS Industry
Competitive factors and trends can be analyzed by comparing EMS organizations’ supply chain processes such as demand planning, process improvement and quality, lean management, inventory management, distribution channels, technology tools. The major issue is to understand whether these processes are efficient enough to allow the EMS providers to merely compete or actually provide competitive advantage.
Effect of Government Regulations Like Restriction of Hazardous Substances (RoHS) on the Supply Chain Operations
The RoHS directive due to be enforced in July 2006 is already impacting the supply chain operations. Though this serves as a driver that increases outsourcing of OEM operations to the EMS providers, from an EMS provider’s perspective, this could very well be a major challenge. This mostly relates to the case, when they are not well prepared to meet it. This impact mostly to inventory and logistics. It will prove to be difficult to synchronize component suppliers and OEMs on adopting lead free assemblies. The transition to lead free is a complicated process. The EMS organizations will need to have a thorough understanding of the product and the various cycles associated with it. Due to the varying demands from the OEMs and the remaining need for a few leaded components, it makes the transition very difficult even if it is going to be done in parts.
Revenue Forecasts for the World EMS Industry
This research provides the revenue forecast for the world EMS industry for seven years. This forecast is done keeping in mind the effects of the various drivers, challenges and restraints within the market.
Technology Trends and Challenges
The electronics industry is always on the cutting edge, adopting new technologies for the industry's’ constant emerging challenges. Original equipment manufacturers (OEMs) are also continually pushing supply chain pressures on their electronics manufacturing service (EMS) providers to reduce costs, reduce lead times, increase quality and on-time order fulfillment. A flexible IT environment enables EMS organizations and their extended supply chain partners to reduce time to market and increase visibility between production and the supply chains. This research discusses the trends in the supply chain for the EMS industry.
This Frost & Sullivan research has differentiated sectors within the market by dividing them into three tiers based on the revenues.
The following technologies are covered in this research:
|Table Of Contents|
World EMS Supply Chain Markets
1. Executive Summary
1. Market Overview
2. Key Research Findings and Conclusions
1. Opportunities and Forecasts
2. Major Supply Chain Trends
3. Major Technology Trends
4. Competitive Analysis
2. Total Market
1. Market Overview and Definitions
2. Market Engineering Measurement Analysis
2. Market Dynamics
3. Market Trend Analysis and Forecasts
1. Revenue Forecasts
4. Supply Chain Trends and Analysis
1. Procurement Trends and Analysis
2. Distribution Trends and Analysis
3. Technology Trends and Analysis
4. Collaboration Trends and Analysis
5. Lean Manufacturing Trends and Analysis
6. Logistics Trends and Analysis
3. Competitive Analysis
1. Competitive Structure
2. Competitive Landscape
2. Competitive Analysis
1. Market Share Analysis
2. Analysis of Notable Mergers and Acquisitions
3. Competitive Analysis and Strategic Recommendations
4. Frost & Sullivan awards
1. Award 1
1. Frost & Sullivan Growth Leadership Award
2. Award 2
1. Frost & Sullivan Customer Service Leadership Award
3. Award 3
1. Frost & Sullivan Product Line Strategy Leadership Award
4. Award 4
1. Frost & Sullivan Business Development Strategy Leadership Award
5. Award 5
1. Frost & Sullivan Award for Competitive Strategy Leadership
1. DSD Tables
1. Total Number of Manufacturing Enterprises
2. Total Value Addition by the Manufacturing Industry
3. Total Manufacturing Industry Contribution to GDP
4. Total Electronic Components Contribution to Electronics Industry
5. Total Number of Freight Wagons
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