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Subject:
From:
Mike Buetow <[log in to unmask]>
Reply To:
TechNet E-Mail Forum <[log in to unmask]>, Mike Buetow <[log in to unmask]>
Date:
Fri, 19 Jun 2009 09:21:19 -0400
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Hi Bob,

There is no neat and tidy consensus on Tiers. The smallest companies are
often called Tier IV or Micro Tier. However, I know several companies in
the $10M to $30M range who refer to themselves as Tier III. 

My assessment is a little different insofar as how I would group them. I
would tend to characterize companies by a three-headed system:
-Revenue
-Range of geography
-Range of services

The top 11 (sales of $1.5B plus) all have footprints in each major
geography and offer pretty much the entire range of services and sectors
served (the exceptions might be Elcoteq, whose product focus is a bit
more refined, and SIIX, whose manufacturing subsidiaries in the US and
Europe are pretty small).

After that, the drop is pretty steep to No. 12 Asteel, which has all of
the above but is half the size of SIIX. There are approximately 38 EMS
firms between the size of $200M and $1B. While they all offer the whole
gamut of services and product ranges (a couple, like Viasystems, offer
bare boards as well as the design/assembly/enclosure/box build menu),
they are mostly characterized by having the bulk, if not all, of their
footprint in a single region. But other than revenue, I can't discern
the difference between a NOTE AB ($214M) and Enics ($486M), which is why
I would tend to group them together.

Most -- but certainly not all -- under $200M would be confined to a
single region, although their range of services would vary dramatically.
Many US EMS companies, for example, have small operations in China,
either through rented space in existing Chinese EMS plants (Endicott
Interconnect, e.g.,) or in small-scale greenfield ops (e.g., Circuit
Service, before it was acquired by Creation Technologies). A twist would
be Express Manufacturing, which is US-based but has a larger operation
in China then they do in the US. I would argue that a company Circuit
Services' size -- roughly $50M-$60M -- that has a China plant is very
different than a similar sized (or even somewhat larger) competitor that
doesn't. So that's why I'm cautious about just using revenue as a
metric.

Hope this helps.

Mike


-----Original Message-----
From: TechNet [mailto:[log in to unmask]] On Behalf Of Croslin, Robert
Sent: Friday, June 19, 2009 8:52 AM
To: [log in to unmask]
Subject: [TN] Contract Manufacturer Tier Ratings

Dear 'Netters,

Part of my group and I have been moved into our newly created Global
Sourcing organization and I'm being asked for some information
concerning our present, highly successful, contract manufacturing
strategies.  How would the various tier rankings by annual dollar amount
be defined today>

I have Tier 1 as $1B and up

Tier 2 as $250M to $1B

Tier 3 as up to $250M

What about the smaller guys, how do they qualify them?

Thanks in advance,

Bob Croslin
The Nielsen Company




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