At the ZVEI's EMS Roundtable - also one of the virtual rounds at this year's electronica - the panelists took a look behind the scenes of electronics contract manufacturing and showed what EMS companies are achieving today. They secure the manufacturing base and are therefore of great importance for the diversity of the European industry.
Johann Wiesböck, Editor-in-Chief of Elektronikpraxis magazine (Vogel Verlag, Würzburg), moderated the web conference discussion. He began by discussing the current situation and the number of EMS companies: There are over 500 in Germany alone and they are the basis for security of supply in the electronics supply chain. Current topics were discussed in a series of question and answer sessions. The participants each presented their company's situation, activities and perspective. The participants were:
- Johann Weber, Chairman of the Management Board, Zollner Elektronik AG, Zandt
- Michael Velmeden, Managing Director, cms electronics gmbh, Klagenfurt, Austria
- Helmut Bechtold, Managing Partner, Profectus GmbH, Suhl, Germany
- Dietmar Günther, Managing Director, Sanmina Corp., Gunzenhausen, Germany
- Thomas Beck, Managing Director, Würth Elektronik GmbH & Co. KG, Niedernhall
- Thomas Kaiser, Executive Vice President, GPV International A/S, Lachen, Switzerland
Effects of the Covid 19 pandemic
As Johann Weber explained, the pandemic is affecting the customer industries differently. The impact on EMS companies is therefore also different. Those serving a broad mix of industries are less affected.
As the protection of employees is a priority, EMS companies have responded with tailored hygiene concepts, such as breaks between shifts for disinfection and also so that fewer people meet each other. In addition, the vast majority of people working in the office worked from home, at least some of the time.
The supply of materials is also a problem that is (still) being worked on. The new buzzword at the moment is: "Material is king", as Thomas Kaiser aptly put it. This describes the current situation, which is mainly caused by the disruption to international transportation. It will continue for even longer, as passenger air traffic has collapsed and there is no sign of an imminent recovery. As a result, there is also significantly less air transport capacity available for freight, which, as Johann Weber emphasized, is a "huge challenge", as around 60% of electronics were previously transported by air freight. In the meantime, however, it has been possible to switch to transport via the so-called New Silk Road.
Security of supply in Europe - also through expertise
Many products contain electronics and the latter are complex. Product manufacturers are therefore often no longer able to produce them themselves. They are dependent on supplies from EMS companies. Michael Velmeden commented: "The EMS companies have a responsibility."
Thanks to internal coordination and coordination with customers, EMS service providers have been able to deliver even during the pandemic. Production has not come to a standstill either. According to Dietmar Günther, customers expect to be able to deliver at all times. However, this is not so easy with the current strong fluctuations in order volumes. At the beginning of the pandemic (March/April), there were sometimes problems with the availability of sufficient single-source materials. Then (from May), a number of customers initially reduced their requirements significantly and then increased them again considerably in the third quarter. This was not foreseeable. However, the customers themselves are once again dependent on their customers and end customers. According to Thomas Beck, this has had an even greater impact on PCB manufacturers - a whip effect in the supply chain. The ability to deliver is currently ensured by means of material buffers. Where the supply chain has been optimized towards minimum stock levels, the pandemic has taken full effect, which is now leading to a rethink or new way of thinking.
Helmut Bechtold noted that customers no longer have (electronics) design and production expertise, nor do they want it. They therefore need competent service providers. Thanks to the broad EMS competence portfolio, which covers the entire electronics value chain, customers can now call up everything they need. PCB manufacturers also support customers with design and new technologies. And customers can concentrate on their core business thanks to the comprehensive EMS expertise. EMS expertise is being further developed through the use of standardized processes in the plants in conjunction with special application/industry know-how. Digitalization is also being driven forward by Covid, which will strengthen communication with customers and suppliers. The original assemblers and contract manufacturing providers have thus become, as Michael Velmeden put it, "partners with the greatest responsibility", offering cost-optimized solutions through to PCN measures to ensure the product's life cycle.
Digitalization - Corona as a turbo and virtual trade fair
As Dietmar Günther said, little has changed in this respect due to the pandemic in the industry, as the EMS industry has been working digitally for a long time. Only working from home is being practiced on a larger scale and, thanks to the technology available, so successfully that it will continue to be used more. According to Thomas Beck, networking between companies is so advanced that many things are now only exchanged digitally. Thomas Kaiser reported that due to travel restrictions, the launch of new products, among other things, is transmitted via online video. Other Covid consequences include remote audits and web conferences. Michael Velmeden commented: "Meetings have become more efficient." Because people don't want to sit in front of a monitor for so long. Digital saves a lot of time.
Another consequence of the pandemic is the virtual trade fair. "Nothing can replace direct contact, but it should be limited to what is necessary," said Johann Weber. The infrastructure for digital communication must also be available, and Germany still has some catching up to do. "Trade fair contact is more than just digital point-to-point communication," added Michael Velmeden. This is because third parties can also be involved. A trade fair conversation is important, also in the future. Dietmar Günther predicted: "There will still be face-to-face trade fairs, but the format will change." In conclusion, Johann Wiesböck noted that he too had always learned and taken away a lot at trade fairs. A statement that is also a conclusion and underlines the importance of trade fairs.
