Relationship building

Neil Tyler talks to Dan Atwell, of Offshore Electronics, about current trends in contract electronics manufacturing. Recently published research from Polaris Market suggests that the electronic contract manufacturing services market could be worth in excess of $554bn by 2026. It’s a market that is seeing increased levels of competition as more OEMs seek support from electronic contract manufacturing companies to take advantage of their design expertise, supply chain management, and manufacturing capabilities. Electronic contract manufacturing is also being used to retain in-house activities and better manage a range of responsibilities from quality assurance and product cost management to assisting in the introduction of new products. According to Polaris OEMs are also looking to subcontract their design and circuit assembly requirements to contract manufacturers, a move that tends to help them significantly boost their profit margins. Crucial to all of this is good communication between the OEM and the CEM, whether that’s when it comes to sourcing components or consulting on design changes. Communication is now what separates a ‘good’ CEM from others in the industry. “Good communication is critical,” says Dan Atwell, Technical Sales Director at Offshore Electronics, “but so too is knowledge about your customer and their products and putting in place a team with whom the OEM can have an open and frank discussion. Success for a CEM is driven by communications and flexibility – in short, relationship building.” Based in Guernsey, Offshore Electronics was formed in 1990 after a management buy-out and since then it has grown steadily supplying a range of OEMs around the world from the likes of Rockwell Automation to SMEs. “We’ve invested in automation and new machines doubling the size of the factory in the process,” explains Atwell. “We’ve moved from hand assembly to machine assembly and grown our customer base significantly.” Like many other CEMs Offshore Electronics had to contend with Covid and the knock-on effects of supply chain disruption and the closing down of many key customers. “Based offshore we weren’t as badly affected as some,” concedes Atwell. “We also benefitted from being a key infrastructure supplier. So, in a matter of months, we were back to almost a normal level of activity.” While certain sectors witnessed a severe slowdown others continued to perform well, according to Atwell, but today, “most of our customers are now back on a normal footing and we are seeing plenty of new projects. And that is despite price increases across the board and volatility in the raw materials market driving up costs. Air and sea freight is now considerably more expensive and less reliable too, than before. The semiconductor crisis also resulted in long lead times and many cheaper suppliers are no longer able to offer consistent pricing and delivery. “Because of that people are now having to look further ahead but there is now more confidence in placing long term orders,” explains Atwell. The importance of good communications between OEM and CEM is essential, but Atwell also makes the point that as a CEM, Offshore Electronics is also a contract manufacturer with engineering at its heart. “You need to be able to engage with engineers when it comes to taking out costs and designing for manufacture. If you understand engineering, you can make recommendations regarding a design, whether that’s substituting components or taking out costs. It’s true to say that much of our business is won because of our engineering knowledge. It’s a real differentiator when it comes to winning contracts.” Customer engagement As a result of supply chain problems, Covid and economic uncertainty the relationship with customers, partners and distributors has changed. “Ultimately we are now an extension of our customers,” Atwell explains, “and we want them to be able to come to us for answers when confronted with problems, so the focus is very much on delivering strong customer services but that requires openness and honesty on the part of both parties. “We’ve also built up very strong relationships with our suppliers, cutting the number that we deal with but developing a far closer one with those we keep – again they are an extension of our business.” The issue of communication comes to the fore again as Offshore Electronics ensures that all its customers are kept informed of supply chain issues and it uses on-site visits to its facility in Guernsey and meetings at customer operations to better understand problems and the challenges they are faced with. “The aim is to improve the working relationship with customers and, ultimately, take […]

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