When observing the collaboration between electronics manufacturers (OEMs) and their electronics manufacturing outsourcing (EMS) suppliers, one can see very different concepts and approaches on both sides. From completely simple, focused on the short-term goal of assembling a batch of devices, to long-term cooperation initiated at the idea stage, through mass production and introduction of subsequent generations of improved products. EMS-OEM collaboration must take this into account.

1. What determines whether the parties will enter into long-term cooperation?

Previous experiences, goals set by superiors, or even the personal character of the persons starting the cooperation determine the factors of supplier selection and shape future cooperation. The choices made often have a significant impact on whether and what results can be achieved.

Mutual satisfaction, however, is usually determined by an important parameter – the fit between the two organizations on a value level.

The answer to the question “what are the key values for each party involved in the cooperation?” will allow the first conclusions to be drawn as to whether we can potentially do good, solid business together.

2. What are the foundations on which mutual trust can be anchored?

If both the OEM and the EMS feel the cooperation is valuable, you can count on both parties to be committed to maintaining it in the long term. If so, they have the opportunity to build up an appropriate level of trust over time. Of course, personal trust between people working together, although necessary, may not be sufficient. Therefore, at the very beginning of cooperation, it is worth taking care of the formal basis. Before we start transferring data constituting company secrets, it is advisable to consider signing a reasonable confidentiality agreement (NDA).

In addition to the act of concluding the agreement, it is worth determining how the EMS provider has ensured that the confidential data provided by its customers is secure.

The answer to this question will tell you a lot about whether the organization is mature enough. Apart from investment in machinery, has there also been investment in establishing the legal and organizational foundations of the business? Does the company have defined procedures for handling confidential information, does its infrastructure allow for the protection of confidential data.

A good assessment in this area may in the future allow the level of openness to be raised above the necessary minimum and result in increased value from the cooperation.

Once the selection process of the EMS provider has been completed, the fulfillment process begins, which should confirm the declarations made and demonstrate on a daily basis that the sales process was not just based on empty declarations.

When the relationship consolidation phase arrives, it is worth giving yourself the opportunity to turn the trust you have built into added value for the cooperation.

3. What can be expected from an informed EMS partner?

A well-informed EMS partner will support his client in business development. They will help their customers reach for additional sales opportunities and overcome existing barriers. They will invest in the relationship, trusting in future benefits for both parties.

If they know their client’s barriers to success, they can point to possible solutions.

They can look for effective ways to shorten delivery times, they can identify extremely expensive areas of manufacturing by suggesting alternatives. They can help you develop effective test procedures.

Finally, the company can adjust its machinery or even its competence to new projects in advance, so that the introduction of new products to the market can take place without unnecessary delays.

Joint consultation at the design stage of new equipment may save the client from non-optimal solutions from the manufacturing cost point of view and once again shorten the time between product debut and full availability of reliable products on the market.

4. How to exploit synergies but preserve confidentiality?

When thinking about EMS-OEM collaboration, it is worth remembering that a team of people working together is more valuable than the sum of the work done by each of them individually.

Do not forget, however, that a good practice for taking care of company secrets is to share them with certain restrictions. Namely, you should provide information only to the extent that is necessary to achieve the purpose of the cooperation and only to those people whose participation in a given project is necessary. This type of arrangement is one of the conditions for recognizing the care of business secrets in a proper manner.

Author of the post:

Sławomir Pieszczek
CEO of JM elektronik sp. z o.o.

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