Less and less companies want to invest their capital into hardware, which then needs to remain unchanged over the coming years. Today’s competitive market environment is asking for solutions where manufacturers can adapt their production equipment based on changing requirements. In times with shrinking profit margins, additionally important are fixed cost basis which exclude all possible risks. SMTH House Renting Solutions offers for this market situation solutions which fulfill all these requirements.
Surveys analyzing buying behaviors of customers show that if similar products are evaluated, the price remains the top argument. However, the importance of financing solutions as well as the possibilities of changing equipment rapidly if the production demands evolve is getting more important.
General market tendencies, which apply also outside of the electronic manufacturing industry, show the lesser companies want to spend their capital into fixed assets. Reason is that also own capital has to be calculated with interest rates and in times where the profits and economical cycles are getting smaller, companies want to have enough cash reserves for difficult times. Using their own capital instead for expanding the business itself (by example through developing new products, expanding distribution and sales channels) clearly shows the potential of new ways of financing production equipment.
The operation of own production lines includes additional risks. The high investments in machinery lead to a long usage of such lines as they need to be amortized over the years. Running such machines for long periods create risks like high maintenance costs, but also the risk of sudden failures which can lead to full production stops.
Producers of own electronic products are in the relatively good position to preview future production requirements which they can already respect when buying new equipment. Contract manufacturers are in a more difficult situation. They know their current customer requirements and the general technology tendencies, but they cannot predict the requirements of new customers. Over the years, new demands regarding component range, combined processes like the combination of SMT and packaging, speed or the need to higher flexible production can appear. If the equipment is just bought a few years ago, most of the manufacturers are not in a position to change their manufacturing lines to more efficient systems. Result is that the profit margins are further reduced and the production cannot be optimized.
Changing such equipment is costly. Either a standard leasing contract must be terminated and high termination fees must be paid, or if the equipment is bought and sold to a broker or is traded in at a machine supplier only a fraction of the original price can be generated.
The new rental solutions from SMTH Financial Services are targeted to the electronic manufacturing market and covers all demands of it:
- Complete SMT Lines or single machines can be configured via SMT House from worldwide recognized suppliers.
- No equity/capital needs to be invested. The balance sheet is not affected and equity can be used to expand the current business or cash reserves can be secured.
- For the chosen equipment, individual renting contracts including installation, training, warranty and also complete service costs over the duration of the contract can be defined. Resulting in the customer has a fixed monthly fee over the duration of the contract excluding all potential other financial risks.
- The duration of the contracts can be from 18 – 72 months. Rental contracts can be extended with an additional option to change the equipment during the current rental contract, giving the customer the flexibility to adapt the equipment to changing production demands.
The individual configuration of the required production equipment and the flexible adaption of the rental solution can be offered for a single machine to complete SMT production lines for the high, medium and small/NPI market segment.
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