Growth strategy of contract manufacturers.
Tay, Lim Low.
Date of Issue1997
College of Business (Nanyang Business School)
Increasing product complexity, shorter product life cycle, rapid price erosion and high variability in demand has forced the manufacturers of electronic products to rethink its manufacturing strategy. Contract manufacturing (also known as electronic manufacturing service, EMS) is the result of the original equipment manufacturer (OEM) focusing on its design and development and marketing and distribution. OEMs make use of contract manufacturers (CMs) to cushion its variation in demand and convert a big part of fix investment to variable manufacturing overhead. The contract manufacturing industry has inherent industry risk, foreign exchange risk, need to be able to cope with changes in manufacturing technology and many CMs are also heavily dependent on a few key customers. This is however an industry that is expected to grow at 30% per annum through the year 2001.
DRNTU::Business::Industries and labor
NANYANG TECHNOLOGICAL UNIVERSITY