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64 SMT007 MAGAZINE I AUGUST 2022 management at Michigan State University. His work on "earned preferential treatment" 1 showed that "buyers receive perks and bene- fits not earned by large volume purchases or by paying on time, but rather by being a good cus- tomer." In the case of EMS companies, being per- ceived as a good customer may come from sharing accurate demand forecasts, greater col- laboration on production scheduling, involve- ment in the development of innovations and more. e key is having an ongoing dialog with trading partners to understand what is impor- tant to them and how both companies can bet- ter work together. ere are plenty of exam- ples where an EMS company has bent over backward to help customers that weren't nec- essarily their largest one. Seeing the Forest and the Trees As the keystone of the electronics sup- ply chain, EMS companies have significant industry and supply chain insights that their upstream customers quite oen do not. In most cases, a large customer like the Department of Defense (DoD) will buy from a defense prime contractor, which buys from a third-tier sup- plier that then buys from an EMS company. When the buyer (at whatever tier) turns over the bill of materials (BOM), it oen iden- tifies several authorized suppliers of the vari- ous components, ranging from printed circuit boards (PCB) to passive and active electronic components. e decision on which of those authorized suppliers will be used is up to the EMS company, and that information is oen not shared with the customer. In many cases, there is not a list of authorized suppliers, and the EMS company has even greater discretion on where the components are purchased. Consequently, the one company that has the greatest insights into what is going into each product is the EMS company. Now, consider that these EMS companies are getting quotes and buying high volumes of components from providers all around the world. at results in EMS companies gathering a considerable amount of industry insights, like lead time and pricing, that again are oen not shared with upstream customers. In this case, EMS compa- nies have the greatest ability to see the entire picture in ways that many other electronics supply chain participants cannot. You Won't Find What You Don't Seek Being the keystone of the supply chain places a significant burden on EMS companies, and it also presents upstream customers with consid- erable risks. What if the EMS company doesn't have the tools and relationships in place to properly manage its supply chain? Could its suppliers be at risk from financial issues, child labor law violations, conflict minerals use, and so on? How well does the EMS firm commu- nicate with its customers about these supplier issues when they do arise? ere is also the question of trustworthiness. Customers must trust that EMS companies fully comply with requirements like export control and counterfeit detection. Aside from an initial site inspection, many customers do not regularly visit suppliers to validate compli- ance with requirements or seek out risks. is problem is exacerbated in volatile times like those being experienced now. Shortages of everything from chips to capacitors to con- nectors increases the level of counterfeiting in the industry. As Matt Turpin, senior advisor The key is having an ongoing dialog with trading partners to under- stand what is important to them and how both companies can better work together.