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Electronics Buyers' Guide

Electronics Manufacturing & Production Handbook 2019


 

Success factors for contract manufacturing in 2017
22 March 2017, This Week's Editor's Pick, Manufacturing / Production Technology, Hardware & Services

The South African contract manufacturing industry stands at a crossroads – to develop its value-add and skills base to carve out a niche in high-end delivery, or to specialise as outsourced labour. It is in fact a choice between investing in costly research and development (R&D) on the one hand and assembling at a low margin without the guarantee of viable volumes on the other.

Owning the supply chain

Manufacturers going with the first choice are faced with the need to invest in more parts of the supply chain, such as distribution and packaging, and selling to customers in order to retain more of the margin from the selling price.

Many electronic, automotive and white goods manufacturers have built factories in South Africa. Here they utilise IP from their ‘mother company’, procure labour and a portion of components locally, whilst still importing some components, and then proceed with local assembly. They then advertise their product and sell to retailers directly. Owning the entire value chain is ideal, but remains a costly and long-term investment that’s out of the reach of small manufacturers.

Own the labour market

The second choice can work if you enjoy an equal partnership with your customers, in which both depend on the other and your risk is lower.

Foxconn in the USA manufactures for household names like Apple and Amazon, but this kind of contract requires extensive capacity, which again seems unattainable for most small manufacturers.

Preparing for 2017

How then can a low-to-medium capacity assembler attain the scale, value-add or end-to-end delivery to meet the volume and quality requirements of global brands?

By getting customers to commit to sufficient and reasonably consistent volumes to justify the investment in equipment and mitigate their risk. No-one wants to put all their eggs in one basket, and a big customer may well decide to groom an eager, dynamic small supplier as backup. Don’t put all your eggs in one basket either – don’t focus on one or two clients or products when you can spread your risk. Include high volume and high margin items with lower volume, higher value items.

Minimise your costs, for example by taking advantage of special economic zones with different tax, labour and resource dispensations. Be prepared for an economic downturn with a diverse pipeline of opportunities and diligent relationship management.

The manufacturing life cycle is long. Plan in advance and have several prospects going. Have new ideas in the pipeline and spend some money on R&D. Join industry associations and lobby groups to raise awareness of the local electronics contract manufacturing industry.

Global markets remain a real opportunity for local assembly in the areas of smart metering – managing consumption of energy and harnessing natural energies. Pick the right horses and be innovative.

For more information contact Duncan Pollock, Grand Tellumat Manufacturing, +27 (0)21 710 2911, dpollock@grandtellumat.com, www.tellumat.com


Credit(s)
Supplied By: Leratadima Tellumat Manufacturing
Tel: +27 21 710 2874
Fax: +27 21 710 2275
Email: manufacturing@grandtellumat.com
www: www.grandtellumat.com
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Further reading:

  • Avnet hosts another successful technical seminar
    27 March 2019, Avnet South Africa, This Week's Editor's Pick, News
    The event gave delegates the opportunity to learn about some of the latest technologies available from Avnet and its suppliers, and to network with representatives of the company and with each other.
  • Load shedding’s toll on electronics manufacturing
    27 March 2019, Technews Publishing, Barracuda Holdings, Phahama Systems Development, TraX Interconnect, Production Logix, This Week's Editor's Pick, News
    Dataweek asked some of the local players how the week or so of load shedding in February this year affected them, as well as their forecasts for the future.
  • How to analyse blind via hole failures
    27 March 2019, This Week's Editor's Pick, Manufacturing / Production Technology, Hardware & Services
    It has become common practice to use blind, filled and stacked vias in many portable electronics products. Experience has shown that this method of interconnection is reliable, provided the fabrication process is well defined and controlled.
  • PCB microsectioning – paying attention to detail
    27 March 2019, Cirtech Electronics, This Week's Editor's Pick, Manufacturing / Production Technology, Hardware & Services
    In our high-tech world, it’s easy to overlook the importance of the humble printed circuit board (PCB). Buried in each electronic gadget or appliance there’s always at least one PCB and each one has ...
  • Sharing the power of digital twinning
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  • Harvesting kinetic energy to power smart objects
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    As the world becomes increasingly smart and connected, batteries are not always the right choice in some of the emerging use cases.
  • Identifying and remedying lead-acid battery failures
    27 February 2019, Forbatt SA, This Week's Editor's Pick, Power Electronics / Power Management
    Proper management and regular maintenance can extend the life of a battery, but what are the possible causes of failure and what should be done if a battery fails?
  • Pros and cons of popular battery cell formats
    27 February 2019, Uniross Batteries, This Week's Editor's Pick, Power Electronics / Power Management
    Flat-cell designs are getting price competitive and battery experts predict a shift towards these cell formats, especially if the same performance criteria of the cylindrical cell can be met.
  • How a global parcel tracker was brought to life in just three years
    30 January 2019, Avnet South Africa, This Week's Editor's Pick, Telecoms, Datacoms, Wireless, IoT
    It took Avnet less than 1000 days to take Hanhaa’s concept, prototype it, refine it and get the first 20 000 units manufactured.
  • Wireless charging set to pull the plug on wired technology
    30 January 2019, TRX Electronics, This Week's Editor's Pick, Telecoms, Datacoms, Wireless, IoT, Power Electronics / Power Management
    The technology will fully deliver on its promise when people can go about their everyday lives without ever worrying about carrying cables or power banks along with them.
  • Overcoming the challenges of implementing IIoT technology
    30 January 2019, Altron Arrow, This Week's Editor's Pick, Telecoms, Datacoms, Wireless, IoT
    The fundamental technologies that will form the basis of IIoT implementations are connectivity, sensors and actuators.
  • What you need to know about the Hermes standard
    EMP 2019 Electronics Manufacturing & Production Handbook, Manufacturing / Production Technology, Hardware & Services
    Taking advantage of modern TCP/IP communication and XML data format technologies, Hermes is effectively a replacement of the more than 20-year-old SMEMA standard.

 
 
         
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