The company’s vision is to be the leading integrated electronics manufacturing services (IEMS) provider to communications technology customers. Having such a focused approach is unusual for top tier EMS companies such as Elcoteq, whose consolidated net sales for 2006 totaled 4.3 billion euros, employs about 23,000 people in 16 countries on four continents, and is the largest European EMS company. It would seem like a considerable risk to put the proverbial all ones eggs in one basket approach to business, but the IEMS provider sees many advantages and benefits to its customers and to its own business operations by concentrating on this strategy.
The main goals are to drive shareholder value on par with competition and beyond and to create superior value to communications technology customers. Strategic themes include expanding its service offering, operational excellence, and focused growth while aligning talent, structure, and people processes with the needs of the business. The enterprise furthers its service offering by developing the existing operating model along with merger and acquisition arrangements and various forms of collaboration with other companies in the same field.
Elcoteq’s philosophy is that focus is the key to success. By focusing on customers and their needs in one discipline, communications technology, a greater degree of competence is achieved. Concentrating knowledge and resources in one area demonstrates a commitment to sharing this industry’s future with long-term partnerships. The enterprise can evolve with the market and can expand to provide services in the geographical areas where the communications technology industry, and the firm’s customers, are locating.
The communications technology business consists of three areas: personal communications, home communications, and communications networks. Personal communications covers mobile phones and their parts and accessories. Home communications includes products such as set-top boxes and electronics for flat-screen televisions. Communications networks consists of wireless and wireline infrastructure products and enterprise networks.
Operational model
The company’s service offering (see figure 1) has three parts: anticipating future customer and market demand and emerging technologies; integrated end-to-end services for the products’ whole life-cycle; and horizontal integration from product development to after-sales services. Its operational model combines consistent manufacturing processes and globally integrated services. The firm’s focus results in consistency, flexibility, and speed.
Long term partnerships
Starting with design and development services, a common technology, product, and market focus enables a company to be in touch with the technologies that are needed and those that are driving the market. There is familiarity with platforms, software, hardware, and all phases of manufacturing as well as disassembly, rework, and repair. There is a realistic understanding of the timetables involved from design to market and all phases of the supply chain.
Sourcing involves what to buy, where to buy, how much to buy, and when to buy. The focused model enables the IEMS provider to better answer these questions and needs of customers. He knows the suppliers for communications technology products, who can produce the quantities needed, and who can deliver them on time to the multiple locations in which the product might be built. The enterprise can look at their customers’ products and product life cycles and determine what components might be available now, what might be obsolete when a new design is ready for manufacture, and recommend products that are projected that might be better in the customer’s design. Focusing on one area provides flexibility with inventory and in accessing parts so deadlines can be met.
Evolving with the market
Logistics, both inbound and outbound, can be a tremendous variable in the total cost of operation. Decisions made can result in extra savings or additional costs. Handling logistics on a global scale for similar products or similar markets provides many benefits. This is especially true for Elcoteq who has manufacturing plants all over the world and can tap into suppliers, manufacturing, and operations where and when they are optimal. The result is flexibility in production and delivery schedules and getting things to customers faster. The company works with customers to determine the best location for designing and manufacturing their products. Logistics personnel understand the customs, duties, and tariffs involved, the paperwork required, and the advantages and disadvantages of each method of transporting goods.
Manufacturing derives a huge advantage from the focused model. The manufacturing plants are set up with the same equipment, procedures, and processes. Commonalities in all the firm’s plants include business control, human resources, manufacturing technology, product development, quality, information systems, materials, and logistics. This creates efficiency, consistency, flexibility, reduced time-to-market, and cost savings. A product can be developed in a new product introduction (NPI) center close to the customer, then transferred to the most beneficial production site. The process transitions smoothly because of the company’s consistent manufacturing solutions worldwide. Plant personnel can adapt more quickly to the requirements of the new technology. The firm’s NPI team can audit the facilities in the NPI center, then duplicate the process in another geographical location for lower-cost volume manufacturing.
Trusted by industry leaders with proven success
The IEMS provider has vast knowledge about the capabilities of high volume assembly equipment and all facets of the modern electronics production line, and has systems in place to optimize process flow. The focused model enables economies of scale. Purchasing similar equipment for all facilities reduces the cost of equipment and parts, training, and both set-up and down time as equipment can be transferred from one plant to another or one line to another.
Quality control can be assured through duplication of processes and services. Although standards and environmental restrictions and regulations may vary around the world, the company maintains the highest standards and skilled workers and ensures that all plants meet the most stringent guidelines.
After-sales service is an integral part of the focused business model. From the beginning, the enterprise is involved in the environmental life cycle considerations of its customers’ products. The aim is to avoid or minimize significant environmental impacts at all stages of the life cycle including end-of-life disposal. Service, support, warranties and repairs are faster, more flexible, more consistent, and more reliable when conducted on a universal basis.
Partner with the best
The firm’s focused business model provides its customers with the lowest total cost of ownership. This is derived from the company’s processes which are integrated globally, its proximity to end markets and skilled labor, its expertise in the industry’s designs, development, products, and technologies, along with volume manufacturing in cost competitive locations, optimization of the supply chain, and the high standards for quality that result in higher yield and faster time-to-market. Focus in communications technology means understanding growing and continuously changing end-user needs, future technologies, and customer business models. The company claims to anticipate market movements and to have the agility to respond to them. In addition the IEMS provider is protecting its customers’ brands with its efforts in corporate, social, and environmental responsibility. The provider has found that its focused approach is driving success for itself, its customers, and the communications technology industry.
www.elcoteq.com
EPP Europe 406
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