Benchmark Electronics, Inc. (Benchmark), a Texas corporation, began operations
in 1979 and has become a worldwide provider of integrated manufacturing, design
and engineering services and product life cycle solutions.
We provide our services to original equipment manufacturers (OEMs) of industrial
equipment (including equipment for the aerospace and defense industries), telecommunication
equipment, computers and related products for business enterprises, medical
devices, and testing and instrumentation products. A substantial portion of
our services are commonly referred to as electronics manufacturing services
(EMS).
We offer comprehensive and integrated design and manufacturing services and
solutions—from initial product concept to volume production including
direct order fulfillment and post-deployment services. Our operations comprise
three principal areas:
· Manufacturing and assembly operations, which include printed circuit
board assemblies (PCBAs) and subsystem assembly, box build and systems integration.
Systems integration is often building a finished assembly that includes PCBAs,
complex subsystem assemblies, mechatronics, displays, optics, and other components.
These final products may be configured to order and delivered directly to the
end customer across all the industries we serve.
· Precision technology manufacturing, which complements our electronic
manufacturing expertise by providing further vertical integration of critical
mechanical components. These capabilities include precision machining, advanced
metal joining, assembly and functional testing primarily for customers in the
medical, aerospace, and test & instrumentation markets (which include semiconductor
capital equipment).
· Specialized engineering services and solutions, which includes product
design for electronic systems, sub-systems, and components, printed circuit
board layout, prototyping, automation and test development. We provide these
services across all the industries we serve, but lead with engineering to manufacturing
solutions primarily in regulated industries such as medical, complex industrials,
aerospace and defense.
Our core strength lies in our ability to provide concept-to-production solutions
in support of our customers. Our global manufacturing presence increases our
ability to respond to our customers’ needs by providing accelerated time-to-market
and time-to-volume production of high-quality products – especially for
complex products with lower volume and higher mix in regulated markets. These
capabilities enable us to build strong strategic relationships with our customers
and to become an integral part of their operations.
Our customers often face challenges in designing supply chains, planning demand,
procuring materials and managing their inventories efficiently due to fluctuations
in their customer demand, product design changes, short product life cycles
and component price fluctuations. We employ enterprise resource planning (ERP)
systems and lean manufacturing principles to manage the procurement and manufacturing
processes in an efficient and cost-effective manner so that, where possible,
components arrive on a just-in-time, as-and-when-needed basis. We are a significant
purchaser of electronic components and other raw materials and can capitalize
on the economies of scale associated with our relationships with suppliers to
negotiate price discounts, obtain components and other raw materials that are
in short supply, and return excess components. Our agility and expertise in
supply chain management and our relationships with suppliers across the supply
chain enable us to help reduce our customers’ cost of goods sold and inventory
exposure.
Outsourcing enables OEMs to concentrate on their core strengths, such as research
and development, branding, and marketing and sales. In an outsourcing model,
OEMs also benefit from improved efficiencies and reduced production costs, reduced
fixed capital investment requirements, improved inventory management, and access
to global manufacturing. OEMs continue to turn to outsourcing for these manufacturing
benefits in addition to reducing time-to-market and time-to-volume production
through utilization of their EMS providers’ product design and engineering
services benefits.
Beginning in the 1990s, the EMS industry changed rapidly as an increasing number
of OEMs outsourced their manufacturing requirements. In recent years, the number
of industries served by EMS providers and their market penetration in certain
industries increased, and we believe further growth opportunities exist for
EMS providers to penetrate the worldwide manufacturing markets. In 2008, the
industry’s revenue declined as a result of significant cutbacks in customers’
production requirements, consistent with overall global economic downturns.
Beginning in 2015, the industry has again experienced revenue declines as customers
in certain sectors have reduced their production requirements due to global
economic uncertainty; however, OEMs have continued to seek the benefits of a
product design and outsourced model. While not all industries we serve are experiencing
outsourcing growth rates, we believe that under-penetrated outsourcing markets
such as medical, industrials (including aerospace and defense), and test &
instrumentation will continue to increase outsourcing in the future.
Our goal is to be the solutions provider of choice to leading OEMs that we
perceive offer the greatest potential for profitable growth. To meet this goal,
we have implemented the following strategies:
· Focus on More Complex Products for Customers in Higher-Value Markets.
EMS providers serve a wide range of OEMs in different industries, such as consumer
electronics, internet-focused businesses and information technology equipment.
The product scope ranges from easy-to-assemble, low-cost, high-volume products
targeted for the consumer market to complicated, state-of-the-art, mission-critical
products. Higher volume manufacturing customers in the more traditional markets
of computing and telecommunications often compete on price with short product
life cycles and require less value-add from EMS providers. Lower-volume manufacturing
customers in the medical, industrial, and test & instrumentation markets
are often in highly regulated industries where they are increasingly outsourcing
higher value-added services to their EMS providers to meet stringent regulatory
and time-to-market requirements. We choose to focus on customers in the traditional
markets with more complex requirements and in the higher-value markets where
outsourcing growth rates are increasing, product life cycles are longer, and
there is a strong match between our capabilities and the needs of these customers.
The ability to serve customers in both markets is important to our strategy.
· Leverage Advanced Technology and Lead with Engineering Solutions. In
addition to strengths in manufacturing complex high-density PCBAs, complex mechanical
systems, and full systems integration, we offer customers specialized and tailored
advanced design solutions. We provide this engineering expertise through our
design capabilities in our design centers in the Americas, Europe and Asia.
Leading with engineering is important in our strategy to increase sales to customers
in our targeted higher-value markets. Through leveraging our advanced technology
and engineering solutions, customers can focus on core branding and marketing
initiatives while we focus on bringing their products to market efficiently
and timely.
· Maintain and Develop Close, Long-Term Relationships with Customers.
Our strategy is to establish long-term relationships with leading OEMs in expanding
industries by becoming an integral part of their concept-to-production and full
product life cycle requirements. To accomplish this, we rely on our global and
local management teams to respond with speed and flexibility to frequently changing
customer design specifications and production requirements. We focus on caring
for our customers and insuring that their needs are met and exceeded.
· Deliver Complete High- and Low-Volume Manufacturing Solutions Globally.
OEMs increasingly require a wide range of specialized design engineering and
manufacturing services from EMS providers in order to reduce costs and accelerate
their time-to-market and time-to-volume production. Building on our integrated
engineering and manufacturing capabilities, we offer services from initial product
design and test to final product assembly and distribution to OEM customers.
Our precision machining and complex mechanical manufacturing, along with our
systems integration assembly and direct order fulfillment services allow our
customers to reduce product cost and risk of product obsolescence by reducing
their total work-in-process and finished goods inventory. These services are
available at many of our manufacturing locations. We continue to expand our
global capabilities:
- in 2009, we added precision machining assets and capabilities to provide precision
machining, metal joining and complex electromechanical manufacturing services
in Arizona, California and Mexico;
- in 2011, we expanded our precision technologies capabilities in Penang, Malaysia.
This expansion added sheet metal and frames fabrication services, advanced metal
joining and grinding services, along with complex mechanical assembly and machining
services to our Asia service offerings;
- in 2013, we strengthened our capabilities to better serve the aerospace and
defense industries and added depth and scope to our new product express capabilities
on the West Coast; and
- in 2015, we acquired Secure Technology, which designs and produces encrypted
and ruggedized communication systems, avionics displays and military-grade components.
These full service capabilities allow us to offer customers the flexibility
to move quickly from design and initial product introduction to production and
distribution. We offer our customers the opportunity to combine the benefits
of low-cost manufacturing (for the portions of their products or systems that
can benefit from the use of these geographic areas) with the benefits and capabilities
of our higher complexity support in Asia, Europe and the Americas.
· Continue to Seek Cost Savings and Operational Excellence. We seek to
optimize all of our facilities to provide cost-efficient services for our customers.
We have a global culture of continuous improvement, sharing best practices and
implementing lean principles. We try to optimize the efficiencies of our operations
in order to provide efficient solutions to our customers.
· Pursue Strategic Acquisitions. Our capabilities have continued to grow
through acquisitions and we will continue to selectively seek acquisition opportunities.
In addition to expanding our global footprint, our acquisitions have enhanced
our business in the following ways:
- enhanced customer growth opportunities;
- developed strategic relationships;
- broadened service and solution offerings;
- provided vertical solutions;
- diversified into new market sectors; and
- added experienced management teams.
We believe that growth by selective acquisitions is critical for achieving the
scale, flexibility and breadth of customer services required to remain competitive.