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Strategies & Market Trends : Electronic Contract Manufacture (ECM) Sector
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To: patroller who wrote (1085)1/9/1998 3:51:00 AM
From: Asymmetric  Read Replies (1) of 2542
 
Speed in bringing new products to market is actually more
important that just money considerations alone for outsourcing.
Susan Wang, VP & CFO of Solectron stated: "Time has become
the most important reason....To introduce new products and
capture market share, the OEMs really have to bring the
product from concept to delivery very quickly."
An example of the incredible speed with which a company
like Solectron can make and deliver a product for another
company: (excerpted from Industry Week) "Solectron has been
able to reduce cycle time - that is, the time from product
order to delivery...Solectron receives what are called
prototype bills from customers - essentially a bill of
materials to be used to build a product to see if it will
work as intended. 'Because we need to schedule some valuable
machine time to get that done, we need to get the design
information from the customer as rapidly as possible.
That way, we can build the product and test it out quickly.
We've actually had our engineers go and help customers
organize and encrypt their data, so they can ship the
information to us via the Internet,' says Ken Ouchi, CIO.
'That way we can build the product and test it out quickly.'
Using the Internet as a communications tool, Solectron has
been able to reduce the prototype cycle time from a week
to a day or two and sometimes less than a day."
How many OEMs would be able to match that? None I can
think of. When you throw in the fact that electronic products
now have shorter product cycles, and all the reasons stated
in previous posts, the case for outsourcing manufacturing
just becomes too compelling. J.Bash stated he thought 14%
of 100% was unrealistic. I think in truth though the final
figure/top of the cycle will end up seeing a number far,far
closer to 100% than to 50%. JMHO - Peter.
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