The Electronic Manufacturing Services (EMS) industry started over 30 years ago when companies were formed to manufacture designs created by governmental agencies such as the Department of Defense (DOD) and NASA. During the 1980s, a handful of contract manufacturing companies or "board stuffers" were formed each year. Many of these companies started with one or two Surface Mount Technology (SMT) lines, accepting contracts from companies that had an overflow of work.

Since then, the EMS industry has grown to an estimated $100B industry worldwide. Today EMS companies offer a full range of services that include design, engineering, manufacturing, test and logistics to original equipment manufacturers (OEMs) like Dell, Ericsson, Motorola and Microsoft. This outsourcing model involves a complex process in which services must be offered across the entire product cycle from product design to system build to logistics. A turnkey approach to manufacturing allows the EMS to take projects from the concept and design phase to industrialization, manufacturing and deployment.

Turnkey Solutions for Branded Technology Companies

What is outsourcing? And why are branded technology companies opting to utilize outsourcing as a business model? When looking at the technology sections of newspapers and magazines around the world, there is increasing news of major technology companies turning over the production of their products to EMS providers. Intense competition and a worldwide economic slowdown have forced more companies to explore this model, and it is in this exploration that companies are realizing the huge potential benefits that outsourcing can provide.

Historically, OEMs were largely "vertically integrated," internally designing and fabricating the components and then assembling and testing the final product. However, as the need to accelerate time-to-market and lower total costs has increased, an outsourcing model has emerged where global turnkey services have spawned a new industry -an industry that offers a vast array of services that include the design, engineering, test, full system assembly (manufacturing) and shipment (logistics) of electronic products.

The outsourcing process is analogous to a family that shops at a local supermarket for food and supplies instead of raising cattle and growing vegetables in their own backyard. By utilizing the EMS' full array of services, the OEM is able to reduce total costs, increase cash flow, conserve capital, and in turn focus on their own core competencies such as research and development, sales, marketing and branding.