They've moved beyond assembly and gone into components procurement and management. They are shipping directly to customers, doing aftersales repair, working with suppliers and OEMs at the design level, and generally acting as OEMs' eyes and ears. In a few years, the top three EMS companies will probably be bigger than most of their OEM clients, according to analysts. As substantial consumers of electronic components, EMS providers are actively moving to reduce the role of distributors in their supply chain-with some help from OEMs. As this trend accelerates, OEMs and EMS providers eager to gain the short-term benefits of lower component costs should pause to examine the negative side of such a development.
Distributors are a hardy lot.
In addition, many OEMs dropped their vertically integrated business structure because they found it too ponderous and loaded with unnecessary costs. Despite all of this, it's obvious that distribution is not the wave of the future. It's part of a glorious past and a fading present. Otherwise, they might end up like the dinosaur they've often been compared with. CEM Directory Top Comp Supp DIST Directory Salary Survey Salary Calc.