In today’s ultra-competitive business environment, original equipment manufacturers (OEMs) demand quality, flexibility, responsiveness and faster time-to-market, even as they invent increasingly more complex, high-end devices for global distribution. Sanmina-SCI Corporation (Nasdaq: SANM) is a top contract manufacturer rising to the challenges of an ever-changing global economy. As the third largest electronics manufacturing services (EMS) provider in the world, Sanmina-SCI offers leading technology companies strategic, innovative, high-performance technology solutions that include design and engineering, new product introduction, cost-effective manufacturing and logistics – services aimed at delivering a complete product solution. Moreover, this comprehensive portfolio of complete end-to-end manufacturing capabilities enables the company to partner with OEMs in the communications, defense and aerospace, medical instrumentation, computer technology, industrial and semiconductor, automotive and multimedia sectors.
As a result, Sanmina-SCI continues to deliver cost-effective contract manufacturing services that cover the entire product life cycle including design, engineering, testing, manufacturing, IT, logistics, and post-manufacturing such as repair and warranty services. Capabilities include circuit fabrication and assembly, backplane assembly, memory and optical modules, logistics and installation, cable assembly and enclosures. As it turns out, coordinating all these phases of product development has taken its toll on OEMs, particularly during the economic downturn, and, therefore, continues to create new business opportunities for Sanmina-SCI in all the vertical markets which the company serves.
“When an OEM goes into the prototype phase of a new device, they have to find a PCB guy, a prototype guy, cables and enclosures to build the whole system up. OEMs needed to staff people to manage contract manufacturers who had no regulatory experience, although they were good at building systems,” explains Vice President of Global Business and Technology Services for Sanmina-SCI’s Worldwide Medical Division, Tamim Hamid. “OEMs need contract manufacturers who understand all of these phases and the issue of regulatory compliance, something we are meticulous about.”
Rules and Regs
In the past, the medical industry had been reluctant to outsource medical systems manufacturing because the industry felt that no one else could handle regulatory requirements such as Food and Drug Administration (FDA) audits. Device makers of complex machines, like Magnetic Resonance Imaging (MRI), looked to contract manufacturers mostly for commodity items like cables or enclosures. However, Sanmina-SCI is changing this perception with the largest network of FDA-registered medical systems facilities worldwide. Today, Sanmina-SCI prides itself on providing a literally life-saving level of quality by monitoring, controlling and delivering the finest medical devices through all stages of manufacturing, test and assembly.
“We build devices for diagnostic and therapeutic medical applications, so we have to be fanatical about making sure we implement and execute as well as the OEMs did,” Hamid says.
Indeed, Sanmina-SCI’s medical division has been serving the needs of medical electronics OEMs for more than 20 years and has become the premier EMS partner. Solutions range from small, hand-held devices like blood glucose monitors or blood analysis equipment to large, complex high-end MRI systems or CT Scanners. In-between are devices such as patient monitors, prostate treatment systems, cosmetic lasers and ophthalmic surgical instruments.
This expertise and experience indicates the world’s leading OEMs trust Sanmina-SCI to conduct the technical and regulatory work to ensure the quality of these sensitive devices. Sanmina-SCI’s multiple compliant manufacturing facilities, regulatory and quality compliant information systems, and technical expertise is unmatched by any other EMS provider. A total of 100 operations globally offer end-to-end manufacturing services and are registered by the U.S. FDA, certified to meet ISO 13485 to manufacture medical devices and certified to meet ISO 9001:2000 standards.
Industrial and Semiconductor
Sanmina-SCI Corporation has grown by acquisition of some top medical systems companies with expertise in medical imaging, electro-chemistry, radio frequency and other modalities, including the delicate and heavily regulated areas of ophthalmology, ultrasound, mammography and X-ray. However, medical applications are just one business area for the global company, which is also a leading industrial and semiconductor EMS provider. This business unit specializes in building the capital equipment used to make computer chips and flat panel displays.
“These are highly complex, very sophisticated pieces of large machinery that are used in fabrication of integrated circuits (ICs) or computer chips,” says Vahid Ghassemian, Vice President and General Manager of Sanmina-SCI’s Industrial and Semiconductor Division. “Our OEM customers produce the capital equipment that either produces the chip or performs some sort of measurement on the IC. We produce the equipment that is part of a completed fab line.”
Similar to the medical effort, industrial and semiconductor equipment manufacturing is strategically located near OEM facilities and markets worldwide. OEMs outsource complete, integrated systems to Sanmina-SCI’s semiconductor design and production expertise.
“In a semiconductor fab, many pieces of equipment come into play to produce this IC – robotics for product handling, processing tools and chambers, as well as test equipment using optics. These fabs are quite complex and the trend is toward outsourcing complete and fully integrated systems,” Ghassemian says. “So we do full turnkey from design through manufacturing.”
Turnkey to Success
In all, Sanmina-SCI has 51,000 employees in global operations in 23 countries, including major U.S. facilities. Fiscal year 2003 revenues were $10.4 billion.
From design and engineering to manufacturing and logistics, OEMs are also looking to Sanmina-SCI for added-value services such as innovative product design, and complex, high-layer-count circuit boards and backplanes. Even more, value-added services even extend to complete system-level assembly and testing, along with plastics, packaging and labeling.
U.S. operations include 125,000 square feet in San Jose, Calif.; a Huntsville, Ala., campus, plus another North American facility in Guadalajara, Mexico. Overseas production takes place in Ireland, Sweden, Israel, China and Singapore. In addition to medical units, separate production facilities in the same locations worldwide are dedicated to Sanmina-SCI’s industrial and semiconductor business, which also has another 80,000-square-foot facility in Austin, Texas.
Regardless of the application for Sanmina-SCI’s solutions, the key to success is the way the company dovetails with its OEM customers and focuses on meeting their time-to-market and cost objectives.
“We feel the OEMs should concentrate on innovation, research, and sales and marketing,” says Hamid. “The great partnership is when OEMs work with us and we ensure that their ideas get developed into low-cost, highly reliable devices or equipment, approved and distributed in the market they want. We built our capabilities with our customers in mind making sure that we build around their core competencies.”
In fact, Sanmina-SCI draws some of its personnel from the ranks of OEMs, creating an organizational structure and culture ideally suited to meeting customers’ needs.
“Right after the ‘tech wreck,’ Sanmina had a vision of bringing in talent from the OEMs from the customers,” Hamid says. “Our management includes executives from the OEM world. We also wanted to create a medical company inside a contract manufacturer to better understand the challenges and develop the solutions.”
As a result, leading OEM customers that include the world’s most important and respected names, rely on Sanmina-SCI to meet their design, manufacturing and logistics requirements. Additionally, high-tech support systems add to Sanmina-SCI’s level of service. For instance, global solutions are coordinated through a central IT platform to give OEM customers access to key data and status reports. This includes information on designs, order and production status, material planning and logistics.
The devil’s in the details and Sanmina-SCI has developed sophisticated technologies and offers technical leadership that sets the company apart from other contract manufacturers. In addition to EMS, the company provides original design manufacturing (ODM) solutions to support product development and precision manufacturing.
Sanmina-SCI operations include strategically positioned regional manufacturing in every major market on five continents to ensure flexibility and responsiveness. “One of the advantages we have at Sanmina-SCI is our global footprint,” says Ghassemian. “We can be wherever the customer needs us to be for manufacturing, and to support their post-manufacturing requirements such as repair and warranty services.”