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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.