By outsourcing cable assemblies to connector manufacturers that have the capabilities, OEMs can focus on their core technologies.
By Gary Manchester
Economic issues coupled with the trend toward outsourcing are driving changes in the way telecommunications and computer makers purchase connectors and cables. A growing number of original equipment manufacturers (OEMs) are now buying complete cable assemblies from connector manufacturers as a way to reduce costs and labor. Outsourcing eases the challenges of keeping up with the rapid changes in the design, manufacturing and distribution of the assemblies.
In the past, most OEMs developed their own interconnection solutions, then bought components from cable and connector manufacturers. The OEMs handled all assembly.
 The MicroCross DVI Link is an example of a total interconnection solution for OEMs. |
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In the cost-cutting environments of today, OEMs want to reduce the number of suppliers they deal with while offloading as much noncritical production as possible so they can focus on their core technologies. Connector manufacturers are often called upon to provide the cable assemblies because they typically offer a broader array of technologies than cable manufacturers.
These outsourcing services often go beyond those traditionally offered by value-added suppliers. Connector manufacturers routinely participate in standards meetings and consortia, helping the OEMs stay abreast of activities in these areas.
The trend toward outsourcing is especially important in power distribution systems, high-speed interfaces and fiber optic cable assemblies because the connectors are becoming increasingly complex. Increases in speed and density require more engineering effort than many OEMs want to bear.
By choosing connector manufacturers that have assembly capabilities and a range of product offerings, OEMs can keep up with interconnection technology without investing nearly as much time or money as in the past. Connector manufacturers determine the most cost-effective method of attaching connectors to cables, flexible circuits and printed circuit boards, and then they finish the assemblies and ship them to facilities anywhere around the world.
Understanding System Design
The trend toward outsourcing is forcing connector manufacturers to take more active roles in understanding full system design so their assemblies are state-of-the-art and so their research programs focus on the upcoming standards and needs of OEMs.
To know all the aspects of system design requires close interaction between the engineering departments of the OEM and the connector manufacturer. After years of requests from connector manufacturers, OEMs are increasingly acknowledging that connectors and cables can have an enormous impact on the overall performance and reliability of a system, so they are considering them earlier in their designs.
 OEMs are requiring their cable assembly suppliers to become more global, not just in manufacturing but in all aspects of business. |
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In order to bring innovative products to market, connector engineers have to understand where technology is heading. Thermal management, power and data rate requirements constantly change, and engineers have to know where these and other parameters are going when they are designing products. They can keep abreast of these changes by working closely with customers as well as with other functional groups within their own companies and by being active in standards organizations and trade groups.
A major benefit of outsourcing is that the connector manufacturers often do extensive electrical and mechanical engineering that has previously been handled by the OEMs. For example, connector manufacturers will perform failure analysis when field failures occur, which sometimes requires the connector engineer to travel to the field to fix the problem. The outcome may result in changes in the assembly, even if the connectors or cables did not cause the failure because it is the less costly solution for the customer.
Occasionally, problems are created by chips that have minor problems with termination. Rather than redesign the board, compensation in the assembly, such as improving the cable's electrical characteristics, can often eliminate the failure. It is typically easier to make changes in the assembly than on a board that is already in production. This requires a high level of expertise from the connector engineers because they must have an in-depth understanding of how the specific chip operates as well as how the assembly can compensate for sub-par termination.
Today, even understanding the OEM's needs is not enough. Connector manufacturers must understand what the end user wants. This helps achieve the ultimate goal, which is to provide components and assemblies that have the features that will make the end product a success. This often requires interaction with both the OEM's marketing and engineering departments. Engineering departments typically communicate only in the specifications they need, not in what the product is suppose to do for the end user. For example, understanding what the customer wants in a hand-held computer can help connector engineers come up with solutions that are almost transparent to the end user. By getting input from both departments, connector manufacturers can provide assemblies that meet the needs of engineering, marketing and end users.
Handling Inventory
In some ways, connector manufacturers are similar to the Tier 1 suppliers in the automotive and military markets that provide complete subsystems. They assume much of the design and manufacturing of the assemblies. For example, suppliers are responsible for handling inventory throughout the lifetime of the product. This extends to the end of life, a tricky time when suppliers must juggle the shifting volume requirements and the desire not to get stuck with materials and components that are either useless or located far from where they can be utilized in other programs.
The challenges of handling inventory came to the forefront in this past fall when the West Coast dock lockout disrupted shipments between the United States and Pacific Rim countries. OEMs that outsourced during this lockout were able to focus on their own shipping problems, avoiding the added burden of dealing with both cable and connector shipments. The strike also underscored the benefits of having plants that are close to the OEMs that purchase cable assemblies. In addition to saving shipping time and costs, the risk of disruption is minimized when the facilities are nearby.
Global Service
In different industries, much of the manufacturing is centered in one area of the world. In all industries, connector manufacturers are being challenged to supply cable assemblies on a just-in-time basis, which typically means producing the assemblies fairly close the OEM's plant.
As telecom and computer makers continue their rapid evolution to becoming global companies, connector manufacturers are increasingly being asked to respond quickly to changes in the region where end products are manufactured. When OEMs move production to countries with lower costs or to locations closer to their customers, connector manufacturers must also shift their manufacturing to those regions.
Mexico and Eastern Europe are considered inexpensive manufacturing regions, but a growing number of companies are establishing facilities in China. In the future, this may change again if areas such as Africa set up electronic manufacturing plants. Connector manufacturers that have established operations around the world are well-positioned to keep up with these geographic changes.
Conclusion
Looking forward, the challenges of maintaining data integrity as system speeds increase will put greater demands on cable assemblies. At the same time, the logistics of global manufacturing will become more complex as companies move production to reduce costs. By partnering with connector manufacturers that have global capabilities and well-rounded engineering capabilities, OEMs can be certain that these issues are handled efficiently so that they can focus on their core technologies.
GARY MANCHESTER is Marketing Director, System Sales Div., Molex Inc., 2222 Wellington Ct., Lisle, IL 60532; (630) 527-4232; Fax: (630) 512-8630; Web site: www.molex.com.
