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The European electronics industry is undergoing major changes in the wake of the financial crisis. The NCAB Group’s vice president, Martin Magnusson, sums up developments and tells about the NCAB Group’s plans for the future and what those will mean for customers.
CONSOLIDATION STRONG TREND
“With businesses falling by the wayside, the recession has led to a consolidation of the EMS branch. We’re seeing a trend towards fewer and bigger players on the market. These companies are, at the same time, becoming increasingly global and setting up manufacturing units in low cost regions.”
Of the 1300 EMS companies in Europe, 56 companies, whose turnover exceeds 50 million euro, account for two thirds of the branch’s total annual turnover in Europe; in black-and-white figures, that’s 14 of a total of 21 billion euros. “Despite the consolidation trend, small and medium-sized EMS companies are still able to grow by cleverly adapting to their local market conditions.” says Martin.
“The growing number of global companies that emerged as a result of the consolidation process is one of the reasons why we have chosen to establish ourselves in England, Poland and the Czech Republic, as well as strengthen our organization in Germany and China.” Our next step will be France, where operations will be under way at the beginning of the second quarter 2011.”
At the same time, Martin underlines that the NCAB Group’s objective is not just to establish a presence in a large number of markets. “What’s important is to be able to provide service in the markets where the customers are physically located.
He says that to achieve this, the NCAB Group needs a local presence and competence.
He emphasizes that: “To be able to offer a high level of service to our customers, we need to be on the spot.” There is also an ongoing consolidation process taking place at the PCB factories in China. There, large volumes are a vital factor in ensuring that a buyer’s requirements are met. The NCAB Groups’ large and growing purchasing power is a definite advantage in this contex.
“Thanks to our size, we are learning more and more all the time. This year we will be manufacturing 8000 new PCB designs and we are also continuously building up our knowledge bank in collaboration with its factories and customers.” Martin underlines.
OUTSOURCING ON THE INCREASE
The outsourcing trend, which has come far in northern Europe has now reached central and southern Europe. An increasing number of OEM companies are now outsourcing their manufacturing operations to EMS companies.
“The outsourcing trend has also led to steadily growing demands on quality and delivery precision, with the biggest driver being the automotive industry. The NCAB Group is currently running an internal project aimed at meeting the automotive industry’s quality requirements. The objective is to achieve 10 PPM (Parts per Million). To better fulfill these customers’ demands for 100% delivering precision, the NCAB Group is continuing to develop its internal systems.
We are today working on an IPL (Inventory Planning System) in order to handle forecasts and are continuing to implement our global ERP and CRM systems at all our companies and are also developing a tracking system together with DHL Global Forwarding in order to further improve our tracking ability in the delivery chain.”
EARLY ACCESS TO KNOW-HOW
“Another challenge is facing the EMS companies, namely that they must be able to handle many different customers with a variety of requirements, which puts greater demands on cost control and short production lead times.” says
THE GROWTH OF THE PCB MARKET IN EUROPE
To achieve this calls for access to PCB know-how, as well as bringing in the EMS company and PCB producer earlier on in the production chain at the end customer. This to ensure that the correct choice is made already at the design phase. This enables us to control the total manufacturing cost while at the same time cutting lead times.
“This is where the NCAB Group comes in with its in-depth know-how within PCBs and the extensive quality control and follow up processes we implement in our factories in China.” says Martin.
Through its strong presence in China together with working closely with the factories to develop them, the NCAB group can also guarantee a high and even quality in its products. Continuous audits are carried out to keep a check on the factories in a way that would be extremely difficult for individual buyers to do by themselves.
“We carry out about 250 factory visits every year. That’s why when our customers call us, it is for them as if they were talking directly with the factory. We control the entire process, which benefits all our customers, be they large or small.” says Martin
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The NCAB Group is one of the fastest growing PCB producers in Europe, whose focus has from the start, been on customer & market presence. Producing printed circuit boards on time with zero defects is NCAB's everyday challenge, before, during and even after, the complex production process starts. Their mission is to ensure you can concentrate on your core business which might not be sourcing, procuring, negotiating and assuring the quality of your PCB’s at the best lead time and cost.