A midmarket electronics manufacturing services (EMS) provider has a few different options to compete with its larger brethren. First, it can outsource manufacturing to low-cost countries such as China. It can decide to keep all of its manufacturing in-house and close to home. Or it can customize its supply chain model based on its customer list.

MC Assembly in Melbourne, Fla. has focused on the latter two strategies to "provide tier one type capabilities to tier two and three customers," according to Jake Kulp, vice president of sales and marketing.

MC Assembly has manufacturing facilities in Florida and Mexico and builds printed circuit boards and systems for North American industrial control, medical electronics and defense and aerospace OEMs. The company's manufacturing uses surface mount ball grid array. Currently, about 65% of its business is printed circuit board assemblies and the rest is box build.

A number of MC Assembly's customers never see the product that the company builds for them. "In our direct fulfillment model, we build a box to their spec, functionally test it, drop it in their carton, put their manual in it, ship their invoice and advise them the box is going to point of use," Kulp says.

While the company has strong board assembly and box build capabilities, the key to MC Assembly's success has been its ability to cater its purchasing and sourcing strategies for each of its accounts.

"We try to create a purchasing or supply chain model for each of our customers because they all are different," says Stan Vogt, director of supply chain materials. MC Assembly has a diverse customer base and customers have different materials requirements.

"They may also forecast and order differently. We try to understand the way they forecast an order," says Vogt.

He says some customers may use standard commodity parts that have short leadtimes while others may use non-standard components that have longer leadtimes. "Some customers may have demand that goes out six to nine months while for others it is just four or five months," says Vogt.

Different material and demand requirements often mean customers need different supply chain offerings. For instance, OEM customers that use parts with long leadtimes may need a consigned inventory program.

"We try to understand the end customer's demand model and their constrained parts and create certain scenarios so that we don't stock out," says Kulp.

Vogt: “We try to create a purchasing or supply chain model for each of our customers.”

Kulp: " We provide tier one type capabilities to tier two and three customers."

Each of those distributors run in-plant stores at MC Assembly facilities, which carry a certain amount of inventory of parts. Additional inventory is available at their distribution center," says Vogt. "Another major benefit of in-plant stores is the inventory is not on our books until we pull it."

MC Assembly also uses a web-based planning tool called RapidResponse from Ottawa, Ont.-based Kinaxis. Forecasts are sent via the tool and distributors ship parts based on that.

While MC Assembly buys virtually all of its semiconductors and other components from distributors, it does have agreements with major component suppliers.

MC Assembly may have to buy the same semiconductors from Texas Instruments or STMicroelectronics for multiple customers. The EMS provider will have an agreement for the parts with the chipmakers, but the components will be fulfilled through distributors.