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OEMs look to cut number of contract manufacturers
11/7/2012 12:05 PM EST
SAN FRANCISCO—More than half of the world's electronics OEMs plan to reduce the number of contract manufacturers they work with over the next year, according to the results of a survey conducted by market research firm IHS iSuppli.
About 51 percent of OEMS that responded to the survey said they would cut the number of outsourced manufacturing services providers they use in an effort to reduce costs, maintain profitability and streamline operations, according to IHS.
IHS's outsourced manufacturers survey, conducted during a six-week period in late July, was sent to more than 1,000 of the firm's clients in electronics supply chain through all major global technology regions.
"The IHS survey reveals that most OEMs want to trim their outsourced manufacturing supply base in order to bring down cost, with the consolidation of suppliers serving as the next biggest reason," said Thomas J. Dinges, senior principal analyst for EMS and ODM research at IHS, in a statement.
"While the impact of this trend is still to be determined, such a move by OEMs potentially could result in a reduction in the number of electronics manufacturing services (EMS), original design manufacturers (ODM) and joint design manufacturers (JDM) competing in the outsourced manufacturing business during the next 12 months," Dinges said.
On average, each OEM now works with eight outsourced manufacturing partners spanning EMS- , ODM- and/or JDM-type engagements, according to the survey.
Next: Major issue in China
About 51 percent of OEMS that responded to the survey said they would cut the number of outsourced manufacturing services providers they use in an effort to reduce costs, maintain profitability and streamline operations, according to IHS.
IHS's outsourced manufacturers survey, conducted during a six-week period in late July, was sent to more than 1,000 of the firm's clients in electronics supply chain through all major global technology regions.
"The IHS survey reveals that most OEMs want to trim their outsourced manufacturing supply base in order to bring down cost, with the consolidation of suppliers serving as the next biggest reason," said Thomas J. Dinges, senior principal analyst for EMS and ODM research at IHS, in a statement.
"While the impact of this trend is still to be determined, such a move by OEMs potentially could result in a reduction in the number of electronics manufacturing services (EMS), original design manufacturers (ODM) and joint design manufacturers (JDM) competing in the outsourced manufacturing business during the next 12 months," Dinges said.
On average, each OEM now works with eight outsourced manufacturing partners spanning EMS- , ODM- and/or JDM-type engagements, according to the survey.
Next: Major issue in China
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