THE CHANGING LANDSCAPE OF CONTRACT ELECTRONICS MANUFACTURING
Author: Denis P. Stradford Company: Flextronics International Date Published: 9/10/1996
Surface Mount International
Abstract: We are in the middle of a great shift in the way companies Total Contract Manufacturing Services Market: have traditionally done business for over one hundred years — a shift from a vertical paradigm where companies possess capabilities for all aspects of their business, to a horizontal model. In this new landscape, outsource specialists are cross-linked in virtual ways to perform a spectrum of tasks keyed to core competencies, a model which supports products from design to marketplace. Futurologist Paul Saffo says, “In this era, the model organization mirrors our networked information structure. It’s a web, not a hierarchy.”[ 1] In the electronics industry, most PC companies and many consumer electronics firms have shifted away from manufacturing, to outsourcing with an outside manufacturing specialist. This revolutionary shift began less than ten years ago and may take another ten years to fully mature. Defining the future of this industry — one of the fastest growing— is the purpose of this paper.