201305.pdf 43279KB May 08 2013 11:07:04 PM

Special SectionDuelingswordsin theEMS sectorElectronics manufacturing services providers areexperimenting with a revenue model that emphasizesquality instead of volume.By Bolaji OjoThe financial stats alone make it abundantly clear electronicsmanufacturing services (EMS) providers are among the most endangeredspecies in the electronics industry. They are also amongthe industry’s most adaptive enterprises, constantly tacking onnew services and forever restructuring and readjusting operationsto fit equally fast-changing revenue models.EMS providers started out as junior partners to OEMs in a supply chain whereplayers talk about partnerships, but which is governed in reality by how muchpower an enterprise has over its extended supplier base. With no natural base, restrictedinteractions with end customers—beyond what the OEM permits—andlimited influence over component suppliers and distributors, EMS providers werenot natural power brokers in the electronics industry.That situation has changed little despite strong efforts on the part ofsenior executives to raise the profile of EMS companies. Even companies likeFoxconn, the world’s mega-EMS provider, are severely limited by what theirequally mega-OEM customers, such as Apple, HP, and Dell, permit. Ratherthan butt heads with customers, but still conscious of the need to improvemargins and profitability, EMS companies in more recent times have resortedBolaji OjoSHUTTERSTOCKS-20 Top 25 Global Distributors May 2013