Good Fences Make Good Neighbors.

As editor-in-chief, I'm in the fortunate position of hearing many different readers' opinions on many industry subjects. And one topic that cropped up again and again in 2000 was how industry trade shows often cater to the large electronics manufacturing services (EMS) providers. Some readers have told me that most conferences ignore the needs of small- to mid-sized EMS providers.

On the surface, this focus on the big guys makes sense from a trade show organizer point-of-view. Compared to smaller manufacturers, the larger EMS players have bigger travel and training budgets and are more able to spare folks from manufacturing lines. However, consider this: According to Technology Forecasters, Inc. (Alameda, CA), the top 12 EMS companies in 1999 accounted for about 42 percent of total EMS revenues. [1] That means that the other 58 percent came from small- to mid-size companies with yearly revenues mostly under $500 million.

Also consider that small- to mid-size contractors have specific business needs that are often quite different from those of the Top Ten. For example, smaller manufacturers' relationships with component and material suppliers may be different or they may have less R&D money to spend. Where are the tech sessions and conferences dedicated to these issues? With the majority of EMS providers under $500 million and their specific business needs unmet, is any educational outlet listening to the knock of opportunity? "Do something!" many of you shouted at me through e-mail.

At least one 2001 trade show listened to your concerns. The IPC asked me to chair a Free Forum panel session at their SMEMA Council's APEX show in San Diego. When I approached them with the topic--Business Issues for the Small- to Mid-Sized EMS Provider-- the organizers simply said, "We love it. Let's do it."

So, I gathered together a group of panelists that would represent the small- to mid-size EMS market, and we descended on San Diego in mid-January. The panelists were:

* Bob Bilbrough, president of Qualcon, an EMS provider in Flowery Branch, GA

* Bonnie Fena, president of the Hibbing, MN, facility of Reptron, Inc., who represented a smaller EMS provider who made the jump to larger

* Jerry Panos, president of Masstech EMS, a contract manufacturer in Newton, MA

* Dr. Bruce Spivack, senior consultant with Technology Forecasters, who provided information on the small to mid-size EMS market.

I must admit that I was nervous about any attendees showing up for the panel. I had the same misconceptions that smaller EMS providers just wouldn't have the budget to attend APEX. Boy, was I wrong. We faced a packed house. A vocal packed house. The attendees were there to make their questions, concerns, and comments heard.

We covered the gamut of business issues relating to the smaller EMS provider. Questions and answers included:

* Q: As a smaller EMS provider, how do you pick and keep the correct OEM partner? A: Do your homework and make sure your potential customer is financially stable; don't engage with startups.

* Q: How do you develop a strong relationship with your customer? A: At the bare minimum, have quarterly reviews with your customers. Hire a strong program manager who's a good quarterback. See the customer. See the customer. See the customer.

* Q: If you're interested in being acquired, how do you get your house in order? A: Infrastructure, management team, and customer base are the top things that a potential buyer looks for. Remember, the human side of the business is the most critical to your success, and honesty plays a big part in the whole acquisition -- be honest about what you want.

Perhaps, though, the most solid piece of advice was that "good fences make good neighbors:" Unbelievably, some of you smaller contract manufacturers are operating without a contract. The advice from the panel: Get thee a good lawyer and develop specific contracts for each customer. A good accountant and safety partner aren't bad ideas either.

Anything else is just spitting in the wind-real messy.

Reference

(1.) Quarterly Forum for Electronics Manufacturing and Supply Chain. (November 2000). Technology Forecasters. Inc.

Lisa Hamburg, Editor-in-Chief