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How Do EMS Providers Decide Which OEMs to Partner With?

March 17,2021


Original Equipment Manufacturers (OEMs) tend to struggle when searching for an EMS provider (aka contract electronics manufacturer) for their projects. Despite the plethora of options available, finding an EMS provider can be a long and tedious process. This is often due to the EMS provider’s (un)willingness to collaborate, rather than the OEM’s ability to look for a partner.

Wondering what considerations EMS providers keep in mind when choosing to collaborate with OEMs? Let’s take a look at some of these.

Market Match

One of the first things EMS providers check when approached by OEMs is whether or not the latter is a good market match for them. They’ll want to know what market sector you as an OEM are selling into, and if it’s a sector they have experience supplying to.

Think of it this way: just like you’d prefer to work with a business partner who has experience in your field, an EMS provider would also want to collaborate on projects where their industry experience and relevance can be matched. Thus, if your market sector doesn’t fall within the scope of an EMS provider’s target industries, you’re likely to hear back a “No” from their end.

This isn’t necessarily a bad thing. In fact, it’s recommended that OEMs partner with EMS providers who have relevant knowledge and experience working in the same industry. It just means that you’ll have to keep looking a little longer.

Production Volume

Another deciding factor for EMS providers is the volume required. Many EMS providers support prototype quantities and are willing to produce small volumes for the OEM in question. However, they may struggle to keep up with increased demands over time.

On the other hand, EMS companies cater to medium to high manufacturing volumes at a time, and cannot produce components in a lower volume. This is why many EMS companies prefer getting involved after the prototypes have already been a success in the market and there is a demand for more.

 

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