Communication breakdown

The electronics industry's division into two types of companies—those that conceptualize and create products and those that manufacture, test, and ship them to customers—continues to accelerate. The image of a vertically integrated operation like the monolithic conglomerates of years past has lost its luster. Clever designers can bring innovative products to market with little investment and no manufacturing capability. Even companies that make their own products have logistically separated the manufacturing facilities from the source of the designs, performing "contract manufacturing" in everything but name. No force on earth will slow this inexorable trend.

Venture capitalists hesitate to invest vast sums for manufacturing infrastructure in such a volatile environment. In fact, one prominent contract manufacturer has referred to his operation as "infrastructure for rent."

Complex boards like this one present a challenge to contract manufacturers. Courtesy of Teradyne.

As a result, OEM expertise in manufacturing issues is declining. Companies have to rely more heavily on the CM's understanding of the ramp-up from the lab bench to full production. But without their own independent knowledge, how can OEMs know for certain that CMs will make the best choice in a particular situation?

The short answer is: They can't. Eventually, OEMs and CMs will no longer speak the same language. Each will have to rely on the other's experience to bring their creations to fruition. But their priorities are different. Over the long haul, the inability to communicate promises to deliver technical and economic headaches and disasters. Ironically, the race to downsize to improve the bottom line (at least in the short run) encourages this trend.

OEMs have to find incentives to keep experienced manufacturing engineers on the payroll to serve as liaisons between designers and the contract houses. After all, the company whose name goes on the front of a product wants some assurance that the product will perform as advertised.

However much we separate the process of translating a gleam in someone's eye to manufacturing reality, the steps are and always have been interrelated. We will always need talented and experienced people to manage the transition.

Steve Scheiber, Contributing Technical Editor, sscheiber@aol.com