Issue link: https://iconnect007.uberflip.com/i/1493797
12 SMT007 MAGAZINE I MARCH 2023 combination of labor shortages, supply con- straints, demand surges, and global disrup- tions. In the past, EMS companies and their customers could typically escalate within their established supply chains and reasonably mit- igate significant constraints to a manageable level. is has not been the case over the past couple of years. Trusting that the original part from the established supply chain would ulti- mately be available with enough effort and leverage has just not worked. As a result, EMS companies have been forced to push component issues back to their custom- ers more oen than ever before. When the parts are available in secondary markets or from bro- kers, they are viewed as having higher counter- feit risks and are oen at extremely high relative costs. If the secondary market is not an option, the burden typically falls on the customer to explore alternate designs. ese are usually last resorts and can create high-risk product tran- sitions. Ultimately, all these issues are pushed back to customers for risk signoff and financial support, or an EMS company may not be able to survive the financial consequences. e availability of a trained workforce, espe- cially on the production floor, has also been challenging, especially as demand has grown. When parts are available, many EMS com- panies have not had enough wage workforce available to recover quickly. e result? Even the most historically effi- cient EMS operations are being continuously disrupted and too many materials are occupy- ing space, if not cash. Customer relationships, cash flow, and EMS profits have all been under duress. Five Issues Plaguing EMS Companies? Here are five issues I hear most oen among leaders of U.S. EMS companies. I'll explain the issues and what I see can be done about it. How do I address my ongoing talent shortages? Most EMS companies are finding it very challenging to attract, develop, and retain the workforce they need today, yet alone for future growth. is applies to the production floor as well as administrative and technical profes- sions. In IPC's January Global Sentiment Report 1 , survey results indicate that only 13% of global companies in the electronics supply chain believe that their ability to recruit skilled tal- ent is improving, while 39% report it's getting worse. e outlook over the next six months is similar. Not surprisingly, labor costs and skilled talent shortages have joined material costs as the most significant headwinds in the industry. Unfortunately, there is no single solution to the talent shortage in electronics manufactur- ing. Most jobs are certainly not virtual, espe- cially as EMS companies are being challenged to build more complex products. e solution requires efforts to create greater visibility for young students, so they are excited about at least exploring electronics as a potential career path. EMS companies then need to demon- strate that they can provide a challenging and rewarding career and that they are not just a temporary stop for a specific job. In support of these needs, the industry needs much stronger onboarding, pathway-related (growing in the job) and upskilling-related (preparing for the next job) education and training. When the parts are available in secondary markets or from brokers, they are viewed as having higher counterfeit risks and are often at extremely high relative costs. 1