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Strategies & Market Trends : Electronic Contract Manufacture (ECM) Sector -- Ignore unavailable to you. Want to Upgrade?

To: patroller who wrote (1513)	5/15/1998 5:23:00 PM
From: Asymmetric	Read Replies (1) \| Respond to of 2542

The "Top 10" Contract Manufacturers risk losing focus... (Here are the latest trend predictions in subcon.com There was no date attached. Seems to imply the ECM industry has rapidly matured, much of the easy money has been already made, and industry consolidation via buyouts of 2nd tier ECM companies is right around the corner. Somewhat more pessimistic than I had hoped for. One company that's definitely flunked the test regarding the criticality of good inventory management is ACTM. Losing customers is one thing and can be replaced. Internal management flaws and poor business organizational structure and internal controls quite another. ACTM in dire need of big doses of Viagra. Good luck to all. Peter.) "Mis-matched computer (MIS) systems from multiple acquisitions can be fatal Material cost reductions will be tougher to obtain in 1998/99 Material allocation problems might re-appear in 1998/99 Finding and keeping good quality people is becoming very difficult Understanding "World Class Customer Service is critical... The "little guys" or the 2nd and 3rd tier of Contract Manufacturers will continue to grow This group of suppliers will serve various technology "niches" This group of suppliers will provide "regional" support This group of suppliers will focus on "prototypes" not volume production Inventory & Supply Chain management has become CRITICAL Since the largest industry segment (PC mfgs) are changing toward "direct sales" methods...they will not hold inventory... the Top 10 Contract Manufacturer will have to put more emphasis (ie investment) on inventory control and material procurement systems. The successful CMFG will be one who has the right MRP system in place to better forecast demands so purchasing can negotiate with suppliers to hold inventory Merger Mania / Acquistions will continue The torrid pace of the last 18 months will continue. This trend to " merge and acquire" should continue through 1998...exactly as OEMs continue to reduce the number of suppliers they wish to deal with. Global Expansion continues The Top 10 will continue to expand globally...until all perceived "low-cost" regions of the world are established Once Mergers and Acquistions are over...CONSOLIDATION will begin Small to midsize CMFG will be "swallowed" up by the Top 10 as the "big guys" continue to look for growth Box Build / System Assembly will become more important to OEM customers and Top 10 CMGs Every Top 10 is a Printed Circuit Board SMT expert by now..."System manufacturing" is the only area left for sales revenue growth / margin improvement...