Take up the cost reduction challenge


ES Nov14 Pg36 & 37 Dynamic 1bCost reduction is an ongoing challenge. Dynamic EMS tackles the issue head on with supply chain management, standardisation and design for manufacture strategies

For many, the issue of cost reduction is an ongoing challenge thanks to market drivers, while for others, cost is a secondary issue behind quality and reliability. No matter what the end-market however, globalisation and volatile material pricing affect everyone. Although manufacturing in low cost geographies has been a successful cost reduction strategy for some high volume markets, today ‘near shoring’ and ‘right shoring’ often promise quicker response times and simplified supply chains. Some customers, however, require a creative solution involving ‘blended’ operational supply chain models.

Early supply involvement

At Dynamic EMS, supply chain management is an integrated part of the development process through the company’s early supply involvement (ESI) program. Customers often begin the process by designing a prototype using catalogue parts, while simultaneously the Dynamic EMS materials team is working with supply chain partners to pipeline key components in order to minimise the impact of allocation. This minimises time-to-market, enabling customers to deliver volume product at that critical point of market entry, thus gaining market share. By working with a supply base of 24 strategic vendors, Dynamic EMS also aims to reduce the cost of maintaining numerous vendors.

Having a long-term manufacturing partner that is financially stable may not seem an obvious route to savings, however, with longevity comes trust and increased purchasing power. The results: better terms and flexibility. Many of Dynamic’s customer relationships span over ten years which Dynamic credits to its agility and responsiveness. One customer in the oil and gas industry, for example, stated: “We require a flexible, high quality, EMS partner that can adapt to our changing business needs – Dynamic EMS fulfils all of these criteria and has been our partner for more than 10 years.”

Standardise assembly

Standardisation is another route to cost reduction. The cost to manufacture surface mount technology (SMT) varies little between the UK and low cost locations. When products include mixed technologies and box-build assembly, creative solutions are needed to reduce labour to a minimum. A recent example of this involved standardising a customer’s product range using a modular approach to component parts and simplifying assembly to reduce labour to a maximum of 10 minutes. With these measures has been possible to retain manufacturing in the UK.

Another aspect of reducing cost is to ensure the product is well designed for the intended marketplace using DFx principles such as design for manufacture (DFM) and design for test (DFT). Time spent involving a manufacturer during the design and pre-production stages can save money later in a product’s lifecycle.

Design for procurement

Design for procurement (DFP) is another, often overlooked, area where early supplier involvement can achieve considerable cost savings over the lifecycle of the product. Supporting customers through this critical phase is key to achieving long-term sustainable cost reduction. Dynamic EMS claims its experienced manufacturing, test and engineering teams in the UK provide strong, local, support.

Dynamic EMS’ Andy Thwaites concluded: “Continuous delivery through sustainable partnerships is what we offer. With investment both in people and equipment, Dynamic aims to stay ahead of the game by delivering sustainable, competitive solutions to both new and existing customers.”