The volume of business for the LVHM EMS providers in the US continues to erode. The OEMs that can, or are willing to predict their demand are moving to low cost regions. The negative cash flow from working capital requirements for the customers that can not accurately predict demand, and or do not have a continuous need for products from month to month is creating a large challenge for the EMS providers.
To address the above challenges, we are modifying our business model to better position us to handle these challenges. We have created a portal within our ERP system for each of our customers and are requiring them to pay for all A, B an D items as they are received by us from the suppliers, including the excess.
We are also providing our expertise and understanding of the EMS market to our customers by providing them with a turn-key solution that encompasses managing their supplier in low cost regions, while providing them with our core competencies in reverse logistics, quality,manufacturing and test engineering, outsourcing, documentation, program management, and design engineering.
We are also expecting for the prototype business to expand and hence, we foresee growth in this area.
