Circuits Assembly - March 2008 - (Page 59)

Offshore Expansion the ability to migrate projects from other KEG facilities, as well as winning additional business from existing and new customers. Most important, projects moving to China were strategically aligned with the company’s long-term business vision. Customer reaction to outsourcing to a wholly owned Asian facility has also proved somewhat different. RMS customers that had once been concerned about using a strategic alliance relationship have embraced the KEG model. For example, a manufacturer of public safety products chose to move lower-volume, higher-mix mature product to the new facility. It had previously shown disinterest in this type of move because of the project’s demand variation complexity. The alliance model simply didn’t permit RMS to control production resources and provide the level of visibility required. The KEG model provides better visibility and close U.S.-China program management team coordination. Today, the project is jointly manufactured in KEG’s Nanjing and Tampa, FL, operations, and the associated project teams communicate seamlessly with the customer. In another example, an RMS medical customer was experiencing cost pressure on some of its mature product. Its reluctance to outsource under the strategic alliance primarily was related to concerns about IP protection and unauthorized parts substitution. While still concerned about China manufacturing in general, under the KEG model, the customer was comfortable transferring some production to KEG’s wholly owned facility in Thailand. Two assemblies were transferred to the Thailand operation. Today, Thailand builds these assemblies to a generic configuration, while final configuration and test are performed in Tampa. The customer has achieved its cost-reduction goal within a framework that also addressed perceived risk factors. More than one road exists abroad. Both the strategic alliance and greenfield facility models have advantages and disadvantages. The best path is determined by a combination of the EMS provider’s business model, internal resources for growth and customer requirements. Carefully consider the pros and cons of each choice before embarking on the journey. From a customer perspective, high-volume customers probably benefit most from EMS providers with a wholly owned global footprint, but for companies with high-service needs or smaller pieces of business, the choice isn’t as clear. Companies with an occasional need may benefit most from a strategic alliance. ■ Paul Plante is vice president, medical industry solutions, Kimball Electronics Group (kegroup.com); paul.plante@kimball.com. Get your daily dose of PCB industry news and views. Subscribe to PCB UPdate The daily e-mail newsletter ﬁlled with news and resources for PCB design, fab and assembly professionals. Edited by Ronda Faries, former editor of Printed Circuit Design magazine, PCB UPdate does the work for you—ﬁnding and organizing the latest news and articles from Printed Circuit Design & Fab, Circuits Assembly and the World Wide Web into an easy-to-read, one-page e-newsletter Experience the convenience of e-mail news delivery, combined with trusted brands and industry expertise. Subscribe now at www.pcbupdate.com. circuitsassembly.com Circuits Assembly MARCH 2008 59 http://kegroup.com http://www.pcbupdate.com http://circuitsassembly.com

Table of Contents Feed for the Digital Edition of Circuits Assembly - March 2008

Circuits Assembly - March 2008 Caveat Lector Letters Industry News Market Watch Talking Heads Focus on Business On the Forefront Screen Printing What Drives the Crowd? Mastering ESD Control in Automated Handling Systems Beating the RoHS Heat Trade Secrets True to Its Roots The Road Abroad - Strategic Alliance or Greenfield Facility? Tech Tips Wave Soldering Test and Inspection Process Doctor Pb-Free Lessons Learned Getting Lean Materials World Equipment Advances Apex Product Preview Ad Index Assembly Insider Technical Abstracts

Circuits Assembly - March 2008

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