EMS industry trends & 2020 outlook...
Author : John Watt | Financial Director | Dynamic EMS
02 March 2020
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As we reflect on 2019 and recall the political, economic, social & technology factors impacting the EMS (electronics manufacturing service) industry, it’s easy to be discouraged by the headlines of doom & gloom portrayed in the media.
This article was originally featured in EPDT's 1H 2020 Electronics Outsourcing supplement, included in the March 2020 issue of EPDT magazine [read the digital issue]. Sign up to receive your own copy each month.
However, despite transitioning around £1.5M of business in the year to a low-cost Tier II supplier in Singapore – bringing the challenge of having to replace this business and still grow – the resilience and determination of Dynamic EMS, its people, and indeed, the sector itself, has resulted in another year of growth for the company. John Watt, Financial Director at EMS provider, Dynamic EMS looks back on last year’s most compelling industry trends and offers its vision into 2020...
As we all know, Brexit and its ripple effects on the business world continued to dominate the political landscape. It’s inevitable that its ramifications will do the same in 2020 – and that’s of course something of which to be mindful.
However, predications and navel-gazing rarely result in positive outcomes for any business; so with this in mind, Dynamic EMS has continued to build its ‘business eco-system’, attracting new business in high-growth niche market-spaces, such as IoT, aquaculture, agritech and medical devices.
We continue to work with development opportunities where technologies are disruptive and, in some cases, driven by legislation. In certain instances, we see project design windows lengthening, as companies seek some sign of stability in market conditions. Nevertheless, the overarching ‘hangover’ is still uncertainty.
While our organic customers continue to see growth in their end markets, the geography and political landscapes of those end markets is changing. The US, China and the EU have all been impacted by trade tariffs and their related currency fluctuations, and this has resulted in an inability to accurately forecast requirements.
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As Dynamic EMS has a global supply chain, we are quite mindful of this instability – to do anything else would be negligent. With that in mind, we have deployed ‘guardrails’ to try and mitigate risks within our supply chain, working closely with our strategic suppliers to get ahead of potential issues of supply and logistics.
On the supply side, mergers and acquisitions activity and consolidation continued in 2019 – and will remain a factor in 2020. We believe we will also start to see similar activity in the EMS market.
In such a fast moving market, one of the critical capabilities of an EMS manufacturing partner is not just handling today’s requirements, but being resilient enough to anticipate and meet those of tomorrow. It’s also vital to keep a watchful eye out for forces adjacent to our market that could impact our products in the future. Our customers know this all too well, and rely on Dynamic to ensure their success.
As we look forward to 2020, we are continuing with our profitable growth strategy and are predicting structured growth in a way that doesn’t have a negative effect on working capital. We are excited about the potential of the new business opportunities we have engaged with over the last 24 months, as they continue their journey with us.
We are also encouraged by the number of opportunities the market is currently offering and the potential to engage in other geographies. As the world shifts, Dynamic’s proven ability to enable scale, scope and speed will be critical to navigating the roadblocks ahead.
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