CMS electronics

a-Abstract summary of the findings

The electronics sector play a major role in the modern economy, it had enable the development of object like Tv, phones, Video games,  auto parts, medical device which are indispensable in the dealy life and in all the sectors and on the activity of several Small and medium entrprise.

Concerning this case,the story start with the opening of the production site called Royal Philips group in 1962 who manufactured electronics material so in 1990 AIK a German company bought a part from the company in a way to change the strategy of Philips.

In the beginning of the 20th century, a major crisis touched the electronics sector in Europe this crisis touched several companies such as AIK-Electronics pushing the company to bankruptcy .

The managing director succed in convinsing his former boss and the management team about the idea of turn the company in to a manufacturing services better know as EMS so in 2003, the buy out made by the company workers ensued by the constitution of cms electronics,the company continued in the business segment but  the company face difficult time in the beginning due to the crisis.

The strategy was to target  few costumers that dispose of the necessary competency in mecanis with a unique selling proposition.

However, a potential market was identified with a high demand which is the automotive market but this market have norms in terms of quality,price and performance.

The automotive industry knew an increase of 30-40 %  compared to 16 % in the 90’s due to the increase sells so the company was opperating in a growth market.

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After that, the company formed a joint venture with a Hugarian partner in a way to develop the company at the international level with the major party of the shares for cms electronics with 51 %.

The goal of this alliance was for different reasons the first one is that the labour hand are cheapest compared to Austria the second one is the people qualification that are an advantage for the company in comparision to the competitors and the third one is the competency of Hungary in soldering that permit to the company to became efficient in maintenance but needs a specialist to control the soldering machinary.

Both of the locations were linked as one integrated manufactured in a way to keep transactions.

Concerning the production, the company dispose of a highly automated production,Additional production process and self-developed automated solutions,the strong of cms is the ability to handle logistics,purchasind and transport to atteint a just in time delivery.

Due to the implantation of suppliers in China cms oppen a trading office in Hong Kong in 2012,because of the high prices that supplier offer to companies in Europe and also certain suppliers can not export due to restriction policy of China.

Moreover,a local employ in Hong kong was in charge of the purchasing due to his expertise in the chineese market and also to communicate with the local people because not all chineese speak english.

In terms of transport and logistic FOB was used “Free on board” Hong Kong as incoterm due to the high cost of the DDP previously used, the suppliers fixed his own prices because all the transport made by the supplier  until the destination now  with FOB the responsibility of the supplier end once the merchandise is in the boat .

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