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North American EMS Aerospace and Defense Market
Frost & Sullivan, Sep 2010, Pages: 31
Total EMS Solutions Continue to Drive Outsourcing Plans for OEMs in the North American Aerospace and Defense Market
Cost-effective and highly efficient manufacturing solutions are helping to boost outsourcing plans for the North American electronic manufacturing services (EMS) aerospace and defense market. The demand for more integrated electronics in the aerospace sector and implementation of modernization plans by the Department of Defense (DoD) have opened up new avenues for EMS providers. OEMs including defense prime contractors are constantly seeking EMS providers for outsourcing activity due to tensions in Iraq and Afghanistan and expansion plans of the DoD. These factors require higher defense spending, resulting in more opportunities for EMS providers. “The current economic situation has put cost efficiency on the top of the agenda for OEMs,” notes the analyst of this research service. “OEMs are seeking EMS providers that offer additional manufacturing benefits and cost-effective solutions while keeping up with the demand for advanced electronic products and systems.” As EMS providers offer more innovative manufacturing technology and design expertise, OEMs will continue to turn to EMS providers for outsourcing opportunities.
Although the prospects for the market look upbeat, there are some impediments stalling its progression. Fierce competition dominates the North American EMS aerospace and defense market, where the EMS providers compete on two primary factors namely performance and price. As competition continues to intensify, OEMs are more likely to gain assistance from EMS providers with regards to best-in-class manufacturing technology, design proficiency, and aftermarket services. Lack of adequate knowledge about regulations in the aerospace and defense industry is another factor hindering market development. For this reason, OEMs are forced to restrict outsourcing to EMS providers who can comply with regulations. This can be detrimental for some EMS providers because it can create a barrier for OEM business opportunities. Conforming with stringent aerospace and defense regulatory standards will enhance the chances for an EMS provider to deliver the most advantageous manufacturing process for customers.
To remain successful in this space, EMS service providers must align their business models and manufacturing services with the needs of OEM customers. This entails new product introduction (NPI) prototypes that offer full scalability and improvements over inadequate conventional manufacturing strategies. “Financial stability, on-time delivery, procurement, and materials management are factors that are just as imperative as the manufacturing process itself,” says the analyst. “An EMS provider needs to proactively emphasis each factor to optimize company best practices.” EMS providers need to collaborate closely with OEM customers and supply chain partners to ramp up the supply chain infrastructure.
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
- Military
- Commercial
This research services is an assessment of the fiscal year 2009 spending for the United States Department of Defense (DoD) on products and services related to enterprise IT. The research service identifies the major market dynamics that are currently influencing growth (drivers and restraints), as well as trends and threats that are impacting the industry. The research service provides a competitive overview and details for the key industry participants. In addition, the research service contains spending forecasts, competitive information for each segment of the market. The period for the study is 2009 to 2015, with 2009 as the base year. Companies will be able to use this information to highlight opportunities within DoD.
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