Top 4 Emerging Trends in US Contract Manufacturing
June 9, 2014
Contract manufacturers in the US have learned to adapt to challenging business conditions. They are well aware of the intense cost pressures, increasing global competition, inconsistent and highly variable demand from OEM's and the corresponding need for super-human responsiveness. They have dealt with these issues most days before they have even finished their first cup of coffee. This environment has led to most US contract manufacturers proudly declaring themselves a "high mix, low volume" contract manufacturer.
Are you ready to adapt again? As a business leader or owner you know you have to continually look over your shoulder for that next threat or opportunity.
Here are the 4 ongoing trends we believe will either challenge or create opportunity for your business:
- Engineering Shift – In years past you pleaded with OEM engineers to request a deviation from specifications to save them money and you couldn’t get their time. Now OEMs are beginning to outsource more engineering to their contract manufacturers to drive cost savings, rationalize SKU counts and to improve form, fit and function. Have you considered how you might capitalize on this trend to create value for your customer?
- Compliance Challenges – If you've dealt with ROHS, REACH, ITAR, Conflict Minerals or any other compliance requirements you can already begin to feel the headache building. This trend will most likely not go away, but rather continue to accelerate. We have seen instances where your ability to manage the compliance challenge for your customer or to align with partners who can stay in front of these initiatives can result in the difference between winning or losing certain accounts or projects. Do you have the resources to stay in front of these emerging compliance requirements?
- On-shoring/Re-shoring – In recent years we have seen resurgence in US manufacturing with companies investing to bring back production to North America for a variety of reasons. While much of the volume related business is returning to the Mexico/US border, we are definitely seeing opportunities improve in the US for the complex and highly technical assemblies. Are you positioned properly to be able to secure some of this returning business?
- Finding Talent – Finding and retaining good talent is an age old problem within most businesses. It warrants discussion in this context because this talent gap seems to be extending to all parts of your organization. From the corner office to the shop floor and everywhere in between we are now seeing challenges in closing talent gaps. With generational workforce shifts, seemingly fewer qualified and committed employees are able to step in with the experience and know-how to take over for your 25 year veteran who is retiring. Have you considered how you will build key talent for the future?
IEWC is uniquely positioned as the only global wire, cable and wire management specialist to focus on the unique challenges you face as a contract manufacturer. As a leader in serving contract manufacturers, IEWC is an active participant in the Wire Harness Manufacturers Association "WHMA" and partners with all shapes and sizes of contract manufacturers. Our business is built and our resources are allocated to help you meet the traditional challenges of contract manufacturing and the emerging trends. We have built dedicated service teams to handle the responsiveness needs, invested in sales specialists (FABTECH) to assist you with your sourcing and product rationalization needs, we are a leader in getting out ahead of compliance challenges with our supply chain and with a global infrastructure we can assist you where your needs arise. These resources are available to assist in supporting your value proposition and to aid in driving efficiencies and cost savings for you and your end customer.
At IEWC, we are yourteam, and we look forward to being an extension of your business and your partner in success, not just another supplier for you to manage.