Report: EMS Business Practices Must Change To Avoid Another Inventory 'Train Wreck'

Jan. 13, 2005
Compiled By Deborah Austin Original equipment manufacturers (OEMs) and their electronic manufacturing services (EMS) providers must resolve lingering supply-chain-relationship issues -- including poor communication and lack of clear task delegation -- ...
Compiled ByDeborah Austin Original equipment manufacturers (OEMs) and their electronic manufacturing services (EMS) providers must resolve lingering supply-chain-relationship issues -- including poor communication and lack of clear task delegation -- to avoid another "inventory train wreck" like that which occurred in 2001, suggests "EMS Industry Adjusts to New Realities," a report from the iSuppli Market Intelligence Services group. These issues -- combined with excess-inventory handling concerns and increased EMS components spending -- could spawn another inventory glut. OEMs and EMS providers must find a better partnership model for assigning such responsibilities with financial terms upfront, suggests procurement and supply-chain-operations services provider iSuppli Corp., El Segundo, Calif. The EMS industry purchased $66.6 billion in electronic components in 2001 -- nearly 24% of total electronics industry spending -- and could spend $71.6 billion in 2002, says the report.

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