Electronic manufacturing service providers (EMS) are an important tool in the arsenal of electronics OEMs who face a variety of challenges including a quick-paced and changing market, pricing pressures, supply chain complexity and more. These contract manufacturers (CMs), since they serve a variety of markets and a broad range of customers, have a hand on the pulse of best practices, manufacturing technology, and risk management.
We sat down with Bruno Racault, president and CEO at ALL Circuits, a CM based in France to find out more about his organization, which has been in business for 25 years and about manufacturing in Europe. We also asked him about a number of hot topics including Industry 4.0 and outsourcing to Mexico.
EBN: Can you give tell us a little bit of the evolution of ALL Circuits over time? How has the company had to evolve to meet changes in the market and customer expectations for their contract manufacturing partners?
Racault: ALL started with a simple desire to save more than 400 jobs in Meung-sur-Loire, around 50 miles south of Paris. The facility started life as a Valeo facility, was acquired by Jabil and at the time we acquired it was at risk of being closed. Myself and three other members of the management team decided to put together a management buyout to save those jobs. That was start of something beautiful as we grew organically at Meung-sur-Loire and additionally through the acquisition of Sagem’s EMS business in Bayonne and Tunisia.
Most recently we added a state-of-the-art facility in Guadalajara, Mexico. Like every other development in our business model it was led by our customers who wanted us to build product for them in the Americas for the local market. We are now a top fifty global EMS, and largest contract manufacturer in Franceserving customers in automotive, industrial and IoT markets.
EBN: How has ALL Circuits evolved to embrace Industry 4.0 and automation? What business benefits has it brought you? How has it changed the way you are able to serve your customers?
Racault: To survive, and thrive, in Western Europe, automation is essential and most people who have visited our site will tell you it’s one of the most automated EMS sites on the planet. We have a very small number of our staff making product. Most are occupied developing and configuring automation or in material management. The next stage is the digital transformation of that site and of our entire global manufacturing ecosystem, we call this strategy ‘Digit-ALL’.
And it’s not just about the smart factory and Industry 4.0, we’re digitally transforming all our business processes including our supply chain and purchasing processes. This will fundamentally change the interaction with our customers and deliver them greater visibility and agility. We want to provide them with a glass factory, where they can see everything that’s going on and are able to interrogate data to make better decisions. We think we have the smartest team in the industry, we know we can deliver the smartest manufacturing ecosystem in the world.
To be frank Industry 4.0 isn’t an option, digitally transformed manufacturing will become table stakes in the future!
EBN: What trends and business considerations drove the decision to open a facility in Guadalajara, Mexico?
Racault: Mexico has been an exciting development for us. As you will have noted already we developed most of our footprint from the initial management buyout and further acquisitions, and this was our initial idea in Mexico too. What we ended up doing was building our own facility with links that reflect the very best lines we have in Meung-sur-Loire.
Mexico has so much to offer, not least the proximity to the US market. It offers us a skilled and inexpensive labor pool, a good trade and tariff relationship with the US and an environment that suits all our logistics and infrastructure needs.
Guadalajara really is an exceptional city, not just because it is close to Tequila. Jalisco’s largest industries and Tequila and EMS, with around 100,000 people working in EMS in Guadalajara alone. So many skilled operators, manager, and engineers and a great academic system ensures our ability to build our team. It has a growing ecosystem of manufacturing in many sectors creating new opportunities for us to develop customer partnerships. What’s more, the city has a truly innovative culture, including the Plug and Play startup incubator at Tech de Monterrey.
EBN: Your company has been largely focused on Europe, but now are expanding more globally. What lessons have you learned in this expansion in terms of customer differences in different geographic regions?
Racault: Global expansion is always a challenge! We are French people running a French business, but like our customer we are global and believe that success comes from thinking global, but acting local. That means being a local in Tunisia, being a local in Guadalajara, and being a local wherever our next facility is. Our team is becoming more international and that will doubtless continue as we support our customers wherever they need us.
EBN: How do you help your customers with materials management? Why do you see this as an important service to offer customers?
Racault: Material management is hugely important to us and our customers. Many years ago, we took the decision to have our own global purchasing resources and not rely on distribution. That has served us well recently ensuring we get our product direct from the manufacturer when we need it. We have invested heavily in this area and continue to do so because we believe materials management is a key part of our service offering and the value we add. This means better supply chain management and better materials management when goods reach our factories to ensure they are on the lines when we need them.
EBN: How are your electronics OEM customers looking to you as an EMS to address supply chain strategically?
Racault: I think our OEM customers want, no they need, an assured reliable supply chain. We have a product to deliver to them and it is our responsibility to make sure we take care of the supply chain that exists downstream from us. That means traceability, transparency, visibility and agility
The markets our customers operate in can be volatile, so we need to have systems and processes that allow us to meet the real demands they have rather the projections they had. They also look to us to mitigate risk in the supply chain, be that from component shortages or from unexpected challenges, like extreme weather, or political issues.
EMS stands for electronic manufacturing services. Many can master electronic manufacturing, not everyone can master the service element. We believe that service is the most important part of EMS.