New Directions in Manufacturing Report of a Workshop (2004) / Chapter Skim
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12 Insights on Outsourcing
12 Insights on Outsourcing
Pages 65-72
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From page 65... ...
These include cost reduction and improved asset utilization; quality improvement; agility and/or flexibility; timeliness and delivery assurance; technology advancement; vertical integration leveraged from the EMS; business and/or risk management; global footprint; long-term relationships. As the leading strategic consulting firm servicing the EMS sector, TFI is in a unique position to evaluate the needs and requirements of OEMs served by the EMS providers.
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From page 66... ...
response to questions on what constitutes EMS value and services, TFI received a total of 323 responses on items that are significant factors in choosing and maintaining a relationship with an EMS supplier. The top items in the OEM's perception of EMS value and service are cost/price, quality, and dependable delivery.
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From page 67... ...
expectations Performance targets, including cost reductions, are unclear and unmet. employment of over 3 million.1 Companies in the aerospace/defense products industry manufacture a wide range of products, including computer systems, tanks, guided missiles, aircraft, navigation systems, arms, and ammunition.
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From page 68... ...
The aerospace/defense industry uses 14 NAICS codes, and production is spread over a wide range of activities. Products contributing heavily to total industry revenue and employment include electronic computers; communications equipment; search, detection, and navigation equipment; aircraft; and aircraft engines.
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From page 69... ...
bolstered by large budgets aimed at transforming the military for a war on terrorism and perceived foreign threats from nations such as Iraq and North Korea. This military buildup will not be able to offset the ongoing crisis in commercial aviation, however.
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From page 70... ...
The following aerospace/defense companies currently outsource some manufacturing: Lockheed Martin; Boeing; Northrop Grumman; Raytheon; General Electric; Harris; Motorola; EADS; Rockwell Collins; United Technologies; and Honeywell.7 In a survey of aerospace/defense contractors, the following were identified as the top criteria by which they select an EMS supplier: exceptional quality; technical capability; acceptable/certified processes; financial stability; effective cost management; component management/engineering; delivery performance; and aerospace/defense experience. When surveyed on the reasons why they would choose not to outsource or to limit their outsourcing, aerospace/defense contractors cited maintaining required quality and fear of losing control of the project as their highest concerns.
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From page 71... ...
Salisbury, MD 60 35 Nortech Systems Wayzata, MN 60 20 Teledyne Electronics Lewisburg, TN 60 30 SMS Technologies San Diego, CA 45 10 Raven Industries Sioux Falls, SD 35 50 Micro Dynamics Eden Prairie, MN 30 20 Ramp Industries Binghamton, NY 25 20 General Technology Albuquerque, NM 25 95 of the EMS market will experience moderate growth over the next 5 years. In addition to technical capability, quality and dependable delivery at a competitive price remain the primary factors for contractors when selecting and continuing to use contract manufacturing partners.
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