Now contract manufacturers are stealing the thunder from some of their better-known customers. It's been quite extraordinary. After their humble start making plain-vanilla products like printed circuit boards, contract manufacturers are proving that they're some of the most efficient producers of everything from PalmPilots to supercomputers. Part of the reason is that they spend almost nothing on corporate frills. A typical manufacturer would use the device once a day, but Solectron, because it makes products for so many customers, uses it five times a day.
Manufacturing is only part of the story.
Companies such as Solectron and SCI Systems Inc. are now major buyers of parts and get volume discounts that can be passed on to big and small customers alike. Contract manufacturers also help clients get their products into global markets more quickly and cheaply because they have facilities around the world. Solectron, for example, has 21 plants scattered around the globe from Brazil to Romania. Solectron even purchased laptop-repair specialist Sequel Inc. on May 20 so that it can fix its customers' products and return them to individual or corporate buyers in one day. There's no reason for anything else.