Environment
  • Equipment Manufacturers (EMs) of various industries from the US are continually striving for reducing costs of fabricating their non-core products
  • EMs continue to move manufacturing plants and design activities to Singapore in exploitation of the area’s attractive tax incentives, well-educated work force, established and reliable intellectual protection (IP) practices, and close proximity to their Asian emerging market of end customers
  • While the manufacturing plants focus on the production of the core systems require the integration of their supportive non-core products, which tend to be very complex and observe low volume high mix nature. It requires high level of attentive supports, meticulous operations, and skillful project management
  • These non-core yet complex hybrid systems require expertise in vast varieties of fabrication practices across multiple product commodities
  • These complex hybrid systems not only command the technical skill sets required for manufacturing and testing but also oblige
  • These complex hybrid systems not only command the technical skill sets required for manufacturing and testing but also oblige
  • the experience in managing multiple sub- assemblies structured in multi-level BOMs which contain up to thousands of line items
  • the ability to plan materials and resources in a concerted efforts
  • the capacity to manage inventories and supported logistics
  • competence to industrialize the flow of products in a cost competitive manner
  • the financial backing to carry expensive inventory items over the course of payment terms
  • Producers of vertically integrated assemblies must realize the cost savings sufficiently worth the tradeoff for the product relocation, technology transfer, and end-customer site support and installation logistics. Under-one-roof manufacturer offers such an attractively appealing attribute. The savings realized from the economy of scales, efficient materials handling, consolidated overhead, effective operations, and, most important of all, the “double” mark-up are enormous.
  • Large-scale Contract Manufacturers (CMs) like Sanmina, Jabil, Flextronics, or FoxConn tend to shy away from “smaller” customers that need production run at much smaller quantities, which are in the hundreds or less. They lack the engineering expertise, technology know-how, and deep understanding of product development and life cycle of high value, fully functional and highly complex capital equipment
  • The CMs face increasingly high operating costs. Large staff requires high operations expenditures. Labor costs at their China and/or Singapore facilities are continually increasing. Higher training costs and materials scrap factor results in high turnout. “Outsourcing” lower level assemblies to supply base inherently bears “double mark-up” characteristic.