Common challenges electronics start-ups face...
01 September 2019
The electronics industry has realised that innovation is no longer the sole responsibility of a company’s R&D team. Globally, a trend has developed for OEMs to partner with electronics manufacturing service (EMS) providers to harness their ‘concept to creation’ experience & expertise, while also religiously protecting the OEM’s intellectual property (IP).
This article was originally featured in EPDT's 2H 2019 Electronics Distribution supplement, included in the September 2019 issue of EPDT magazine [read the digital issue]. Sign up to receive your own copy each month.
We’ve seen this within the tier 1 EMS environment, with companies like Jabil, with its ‘Blue Sky Centres’, and Flex, with its ‘Product Innovation Centres’. But this market need isn’t exclusive to tier 1s. Here, Chris Johns, Chief Technology Officer for electronics manufacturing service provider, SMS – Smart Made Simple discusses EMS needs and challenges for electronics start-ups...
SMS – Smart Made Simple sit in the low volume/high mix arena, specialising in complex, full-service level assembly (SLA) and customisation. We’re not a mass manufacturer and we like to tailor our approach to the individual needs of all of our customers. As we’ve been in the UK electronics industry for approaching 100 years, we have a reputation as the go-to people to take care your electronics product from concept through to commerce. This positive association brings many brand benefits, but also opens the floodgates for lots of enquiries from the start-up community. “Sometimes, you have to be the person in the room who instigates the ‘unfit for role’ conversation,” says Chris Johns, CTO at SMS – Smart Made Simple...
Starting up? Start out right...
Over 500,000 start-ups fail per year. Given the complexity and risk associated with product introduction, OEM customers understand that their need is the success rate of product introduction, development and market adoption, in an environment where speed-to-market and time-in-yield is critical.
The common challenges our developmental customers face are:
• Time-to-market risk
• Limited engineering resources
• Access to state-of-the-art equipment
• Market entry and supply chain risk
• Ability to scale
Given that speed is of the essence, we pride ourselves on our ‘open book’ policy. We will be honest, straightforward and challenging during our initial conversations to validate your concept in a timely manner – not only for our own benefit, but for our customers’ benefit too. Time becomes a very valuable commodity during the product introduction phase. From experience, this is when we tend to categorise our new, start-up customers into three types:
1. They have an idea, but they don’t know how to implement it
2. They have had their idea implemented and qualified using a developmental platform such as Raspberry PI, but they now need support and security in its evolution
3. They have a full circuit diagram and their first printed circuit board has been assembled (PCBA), but they now need support and security for scale and speed
Limited engineering resources
Our sweet spot is customer number two, and we are not alone. This category of customer has been one of the main drivers for the influx of design houses opening to offer solutions in mechanical, optical, software and firmware design. To this technology cluster, bringing together these vertical services (VI) becomes like a jigsaw puzzle, as they try to navigate how to put in place their supply chain. Of course, too many touchpoints increase risk and supply chain fragility. This is why more OEMs are demanding in-house VI, to reduce complexity and risk, while keeping the end goal of speed in focus.
As we become more involved at this point of the product life cycle (PLC), we can also help to erode a scenario that has been quite common up until now: over engineering. We have seen, as developmental companies start to get excited about their product introduction, there can be a tendency to over-engineer the product for their intended target market. Our engineering experts will strip back the requirements to quote for what they believe the market actually requires, matching the product to its intended application. These consultative actions help reduce unnecessary complexity and cost. However, this is never a cost conversation, but a volume/product tailoring to suit. We often work to remove component parts that we know are difficult to source, or could obsolete, or we can take advantage of component pricing that we only achieve by buying in bulk, which of course leads to further economies of scale for our customers.
Access to state-of-the-art equipment
Our ‘Development Services’ area is a department dedicated to supporting customers’ needs for prototype, rapid build and low volume manufacture. Functioning as an autonomous and dedicated department, with the flexibility to scale up to be able to tap into the resources of our manufacturing. The development centre has grown significantly for us since conception. To support this growth, we have continued to invest in new technology and equipment.
Our latest investment is part of a long-term strategic plan, to introduce a new Mycronics Mydata assembly line for printed circuit board assembly (PCBA), including its MY600 Jet Printer and MY200X Pick-and-Place machine.
Market entry and supply chain risk
We have made a commitment and investment to operate with the agility and flexibility of a tier 2/tier 3 player, but with the technology engine of a tier 1 EMS provider.
Customers come to us as we offer them an understanding of their total landed cost and complete supply chain transparency and traceability, as advanced software solutions continue to transform the supply chain and devices become interconnected, to create the Internet of Things (IoT).
By harnessing technology at the speed of innovation, we understand how performance is improving year-on-year, especially at the lower volume/higher mix product configuration level. Competitiveness is now being achieved in the UK, which was once considered a higher cost economy.
SMS provides a total smart supply chain management solution, increasing our customers’ flexibility and reducing distribution barriers, turnaround times, and overall transportation and product costs. Our product fulfilment and vertical integration with first-rate component capabilities helps OEMs create market-leading products.
From concept to creation, to commercialisation, to customer, SMS is a leader in the specialist low volume, highly complex manufacturing services market space. We have earned critical industry facility certifications that bring full viability and credibility in the aerospace & defence, communications, industrial and medical markets. SMS brings the right scale, capabilities and competitive solutions to customers needing high-reliability attention, product realisation and supply chain optimisation.
Ability to scale
We know that if one of our developmental customers does fly high, we need to build a flight path for them – and we will be here for the next generation, and the next generation, which keeps our future exciting.
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