SMT007 Magazine


Issue link:

Contents of this Issue


Page 68 of 97

December 2016 • SMT Magazine 69 EMS INDUSTRY SALES AND MARKETING: WHY STRATEGIES VARY WIDELY tomer base when the current management team took control. In conducting this customer ratio- nalization strategy, the management team uti- lized the Boston Consulting Group (BCG) ma- trix. Each customer was analyzed and assigned a favorability score based on the following criteria: • Volume (100K unit per year) • Mix (# of assemblies) • Complexity (BOM line items) • Auto placements • Procurement challenge (end of life, sole source, allocation issues, etc.) • Product life cycle (years) • Customer's internal PCBA capability • TAM (rev. potential) • Manageability (documentation, systems, logistics, internal support, etc.) • Margin potential (throughput %). Customers with low revenue and a low fa- vorability score were encouraged to transition to other suppliers. Customers with low revenue, but a high favorability score were classified as "up or out." Customers with high revenue po- tentials and a high favorability score were clas- sified as keepers and customers with high reve- nue and a low favorability score saw an increase in pricing as a motivation to exit. Because of the rationalization process, the business base went from more than 20 custom- ers and over 5,000 unique part numbers to less than 10 customers and under 1,000 unique part numbers. This significantly reduced the com- plexity of the business and enabled more focus on the needs of preferred customers and target- ed customers with high favorability scores. The team then rationalized its supply base to a core group of suppliers willing to align their systems with the company's Lean model. It then positioned itself as a higher value cus- tomer within its supply chain because its cus- tomer base fine-tuning combined with its Lean disciplines minimized the amount of "work" it represented to the supply chain. From a marketing perspective, the compa- ny does little outside of articles and press releas- es. Its industry leading metrics have resulted in a string of awards for operational excellence in- cluding recognition from Frost & Sullivan, the Small Business Administration, Circuits Assem- bly's Service Excellence Awards and Michigan Celebrates Small Business. From a sales perspective, it has a sales force of one and some support from manufacturer's reps. The bulk of its growth comes from cus- tomer and supplier referrals. The metrics driving this performance in- clude: • On-time delivery: 99.6% • Inventory turns: 12 to 14 • Gross margin: >21% • Compound annual revenue growth rate: >50%. Milwaukee Electronics Milwaukee Electronics is headquartered in Milwaukee, Wisconsin and has additional man- ufacturing facilities in Portland, Oregon and Tecate, Mexico, plus an International Purchas- ing Office (IPO) in Singapore and a Business Process Office (BPO) in India. A key point worth noting is that the company is one of the oldest EMS companies in existence, having celebrat- ed its 60 th anniversary in 2015. While there are a few older companies who evolved into EMS providers, Milwaukee Electronics' focus has been contract engineering and manufacturing services from day one. The company's primary focus has been ad- dressing gaps in EMS service delivery process. In doing so, it aligns closely with the Service Ex- Milwaukee Electronics' business model includes product design engineering capabilities, and in some cases, ODM capabilities utilizing proprietary motor and control technology.

Articles in this issue

Archives of this issue

view archives of SMT007 Magazine - SMT-Dec2016