{"id":989662,"date":"2019-03-31T07:39:00","date_gmt":"2019-03-31T11:39:00","guid":{"rendered":"https:\/\/vexos.com.superdorx.com\/?p=989662"},"modified":"2021-08-27T15:35:47","modified_gmt":"2021-08-27T19:35:47","slug":"new-product-development-is-key-to-ems-revenue-growth-in-canada","status":"publish","type":"post","link":"https:\/\/www.vexos.com\/2019\/03\/31\/new-product-development-is-key-to-ems-revenue-growth-in-canada\/","title":{"rendered":"New product development is key to EMS revenue growth in Canada"},"content":{"rendered":"\n

Some OEM buyers involved in outsourcing decisions are looking to EMS providers in Canada to help bring new products to market.<\/em><\/p>\n\n\n\n

Vexos Electronic Manufacturing facility in Markham, Canada<\/p>\n\n\n\n

Electronics manufacturing services (EMS ) providers in Canada say while many OEMs choose to manufacture in Canada to sell products into the Canadian market, many are also turning to them to develop new products that will be sold globally.<\/p>\n\n\n\n

In addition to state-of-the art manufacturing facilities, many EMS providers in Canada also have design centers or programs to support OEMs\u2019 new product introduction efforts. The idea is to offer OEM customers greater value by assisting in the design of new products, building prototypes and then helping the OEM transition a new product into volume manufacturing.<\/p>\n\n\n\n

For instance, global EMS provider Vexos, with manufacturing and engineering expertise in Markham, Ontario provides support to OEMs with design concept, advanced design engineering and new product introduction capabilities.<\/p>\n\n\n\n

Other EMS providers also offer NPI and design help to OEMs developing products in Canada. For instance, Vexos is a global EMS provider with manufacturing in the U.S., China and Canada where it builds equipment for Canadian-based OEMs.<\/p>\n\n\n\n

\u201cOur business in Canada certainly has been growing,\u201d said Wayne Hawkins, senior vice president and general manager for Vexos\u2019 Markham manufacturing facility.<\/p>\n\n\n\n

\u201cWe had strong growth over the last few years,\u201d he said. \u201cLast year revenue increased by about 10 per cent. It has been a very good environment over the last couple of years.\u201d<\/p>\n\n\n\n

He said Vexos builds printed circuit board assemblies as well as entire systems and we \u201cdo full test for the end application to make sure quality requirements are met.\u201d Connectivity and RF products and industrial equipment \u201cwould be the majority of what we do in Markham,\u201d said Hawkins. It also builds medical and security products.<\/p>\n\n\n\n

He added that Vexos is seeing \u201ca lot of new business opportunities because of the growth of Internet of Things\u201d as more industrial products are being connected to the Internet.<\/p>\n\n\n\n

OEM customers also want Vexos to help them develop new products.<\/p>\n\n\n\n

\u201cWe are located close to design centers of our customers where quick turn NPI service\u201d is needed to help customers launch new products, he said. There is a lot of new product development in the Toronto area as well as Kitchener and Ottawa.<\/p>\n\n\n\n

Building prototypes<\/strong><\/p>\n\n\n\n

He said Vexos works with OEMs building prototype products and then helps \u201cthem ramp up production to get their products to market.\u201d The EMS provider assists OEMs in transitioning their new products from small production to volume production at its \u201csister location in Shenzhen, China to reap the benefits of lower-cost manufacturing if a customer needs to kick something to higher volumes to get cost efficiencies,\u201d said Hawkins.<\/p>\n\n\n\n

\"\"
Wayne Hawkins, Sr VP & GM Vexos Markham<\/figcaption><\/figure><\/div>\n\n\n\n

“Our business in Canada certainly has been growing. We\u2019ve had strong growth over the last few years”<\/em><\/p>\n\n\n\n

Seeking design support <\/strong><\/p>\n\n\n\n

Internet of Things and industrial customers are also seeking design support. \u201cIn our industrial segment, there is a connectivity evolution occurring with industrial products tying into IoT,\u201d said Hawkins.<\/p>\n\n\n\n

In addition, there are new customers with \u201cniche products that are IoT applications,\u201d he said. \u201cA lot them are new ventures involving new emerging companies and a higher risk. It could be a great opportunity or a they could die quickly,\u201d but some of the new IoT products will be part of Vexo\u2019s future growth, said Hawkins.<\/p>\n\n\n\n

There are also opportunities with traditional segments he said. \u201cWe are seeing more growth potential around security products,\u201d said Hawkins.<\/p>\n\n\n\n

There are new products involving security access controls and cyber security for the defense industry and businesses. Such products will be opportunities for EMS providers that have high level optical capabilities and manufacturing expertise with fine-pitch technology and flexible printed circuit board assemblies.<\/p>\n\n\n\n

While helping OEM customers design and develop new products may be important to EMS revenue growth longterm, some EMS companies say recently imposed tariffs on Chinese goods imported to the U.S. may spur some short-term sales growth for some Canadian EMS providers.<\/p>\n\n\n\n

Hawkins said Vexos is getting more quotes from U.S. companies inquiring about manufacturing in Canada since tariffs of Chinese goods went into effect in the U.S.<\/p>\n\n\n\n

\u201cU.S. companies are looking at a 25 per cent tariff of products coming from China,\u201d he noted. \u201cSome U.S. companies are asking \u2018what are the \u201copportunities and options to avoid that?,\u2019\u201d said Hawkins. \u201cCertainly, leveraging a Canadian EMS site to build products and ship them into the U.S. and avoid some tariffs\u201d is an option, he said.<\/p>\n\n\n\n

He noted that Canadian labor costs are lower than in the U.S. \u201cThere are some cost reduction opportunities utilizing Canadian EMS providers, maybe not to the extent of China or Mexico but you\u2019re getting the benefit of a highly skilled workforce, engineering, and serviceability,\u201d said Hawkins.<\/p>\n\n\n\n

EMS industry in Canada is small but growing<\/strong><\/p>\n\n\n\n

The electronics manufacturing services industry in Canada is small compared to other regions such as China or the U.S., but many of the world\u2019s largest EMS providers build electronic systems in Canada for the domestic market.<\/p>\n\n\n\n

For instance, Vexos, which is headquartered in New York, has manufacturing facilities in Markham, Ontario.<\/p>\n\n\n\n

The EMS industry in Canada had about $4.5 billion in revenue in 2017 which is about a tenth of the size of the U.S. EMS market, according to Randall Sherman, president and CEO of New Venture Research, based in Nevada City, Calif. The global EMS market totals about $365 billion. The Canadian EMS market grows about 3 per cent per year. By 2022 EMS sales revenue will reach $5.65 billion, he said. \u201cMost of the production is for domestic purposes. There\u2019s not a lot of export,\u201d he said.<\/p>\n\n\n\n

There\u2019s also not a lot of high-volume manufacturing in Canada. \u201cCell phones, computers, networking equipment are not made in Canada,\u201d said Sherman. It\u2019s more low- to mid volume manufacturing high-complexity\u201d products including medical and industrial products, aerospace systems, robotics, test and measurement and process control equipment, he said.<\/p>\n\n\n\n

EMS providers in Canada tend to service smaller OEMs. Although there are exceptions, such as aerospace manufacturer Bombardier.<\/p>\n\n\n\n

Although growth in the EMS industry has been modest, there could be an uptick in growth as more OEMs in Canada embrace the outsourcing model. \u201cThey have good quality manufacturing capacity in Canada,\u201d said Sherman. In addition, the dollar value of the total available market (TAM) for electronics production in Canada including manufacturing by OEMs and EMS providers totals $63 billion. EMS providers in Canada could \u201ccapture a larger share of total available market over time,\u201d said Sherman.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

To read the full article, which appeared in the March 2019 issue of <\/em>Electronic Outsourcing Magazine, click here<\/em> <\/a><\/p>\n\n\n\n

For more information on Canadian Electronic Manufacturing Services – Contact VEXOS today!  or Call 855-711-3227<\/strong><\/p>\n\n\n\n

Vexos, is a mid-size global Electronics Manufacturing Services (EMS) and Custom Material Solutions (CMS) company, providing complete end-to-end supply chain management solutions in electronic and mechanical products for Original Equipment Manufacturers (OEMs) and new emerging technology companies.  <\/em><\/p>\n\n\n\n

Vexos services extend over the entire electronic product life cycle, from value engineering services for product development to prototyping and New Product Introduction (NPI) through to the growth, maturity and end-of-life phases with a strong focus and commitment to quality and customer service satisfaction.<\/em><\/p>\n\n\n\n

With facilities in United States, Canada and China Vexos can efficiently compete in today\u2019s marketplace, primarily focus within automotive, industrial, networking, communication, medical and security market segments.  Vexos enables their customers to focus on their core business, reduce your cost, speed your time-to-market and gain a competitive advantage.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Some OEM buyers involved in outsourcing decisions are looking to EMS providers in Canada to help bring new products to market. Vexos Electronic Manufacturing facility in Markham, Canada Electronics manufacturing services (EMS ) providers in Canada say while many OEMs choose to manufacture in Canada to sell products into the Canadian market, many are also…<\/p>\n","protected":false},"author":1,"featured_media":989672,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"iawp_total_views":127,"footnotes":""},"categories":[10],"tags":[],"class_list":["post-989662","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-articles"],"yoast_head":"\nNew product development is key to EMS revenue growth in Canada - VEXOS<\/title>\n<meta name=\"description\" content=\"Some OEM buyers involved in outsourcing decisions are looking to EMS providers in Canada to help bring new products to market. 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