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20 SMT Magazine • May 2016 by Michael Ford MENTOR GRAPHICS Unlike OEM companies that can spread the cost, risk, and allocation of production jobs across multiple lines, EMS companies are of- ten forced to focus customer's products on in- dividual dedicated lines and small groups of resources. As EMS companies typically have to deal with significant variation in demand from their customers, automation could be signifi- cantly under-utilized, which makes the justifi- cation of automation much more difficult. Are smaller EMS companies effectively dependent on manual labor and excluded from the innova- tion that automation and the computerization of the factory operation can bring? The answer is no because IoT is coming to the rescue. Comparisons are often made between OEM and EMS models of production. The perception of the OEM model is that products can be al- located freely across the entire factory to best meet individual product delivery requirements. The advantage that the vertical organization brings is often not fully embraced because most OEM operations still lack the engineering tools that provide the product portability or finite planning solutions. Some, normally larger, EMS companies are in a similar position, where a bulk of products from a specific customer will be made together in the same factory. In these cases, the EMS factory is almost like a replace- ment or extension of the OEM factory, with the same opportunity for product allocation. In the majority of cases, typically more in the smaller EMS companies, a wide range of products for different customers are made si- multaneously, often across different sectors of the market. This is a smart approach that con- siders customer dependency and load balancing because different sectors have peaks and troughs in production as they are affected by seasonal- ity, product cycles, marketing campaigns, and competition. Understanding the Costs of automation All of these factory models suffer from the same issues of efficiency and productivity, but in cases where single lines are effectively dedi- cated to a customer's production, certain issues EMS Rules of Automation & ROI FEatuRE