SMT Magazine

SMT-Apr2016

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50 SMT Magazine • April 2016 by Bjorn Dahle KIC ThErMAL With a level playing field in terms of access to talent, technology, knowhow, infrastruc- ture, and financial resources, how can an EMS company build a successful business year after year, decade after decade? There may not be a magic formula that works for everybody in this fiercely competitive business. As a matter of fact, having a differentiated strategy relative to the competitors is one opportunity for suc- cess. With the ever-growing pricing pressure is there any alternative to penny pinching? In my opinion, not only do successful alternatives to penny pinching exist, but they are necessary for long-term success. The teachings of a competi- tive strategy led by Michael Porter states that in a commodity market there is only one long- term winner, which is the lowest cost leader because he can lower the price until everybody else leaves the business. So unless you are the Walmart or Amazon of the EMS business, you may want to consider a differentiation strategy. One EMS company in the St. Louis area has used a number of successful strategies, some of which are counterintuitive, that have led to a successful business since 1963. There may be lessons to learn when dissecting Sie- mens Manufacturing Co. Inc.'s strategies. (No relation to Siemens AG, the multinational conglomerate.) The first striking revelation about this man- ufacturer is that it does not specialize in any specific industry segments or applications. As illustrated in Figure 1, the company serves nu- merous industries. According to Mike Siemens, director of business development, a diverse spectrum of clients provides less volatility in demand since various industry's segments tend to be coun- tercyclical to others. A growth in some indus- try sectors often compensates for downturn in other segments. Benefits of Improving Reflow and Screen Printing Processes fEaTurE

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