Roland Carter of Smiths Interconnect looks at the global market for connectors, and argues that custom or semi-custom products have a key place.
The connector industry has been consolidating for over 25 years. Mergers and acquisitions have been the name of the game that has allowed the top five suppliers to increase their total market share.
More recently – in the last five years or so – the highly competitive nature of the market has led these players to attempt to enhance profits by treading the path of globalisation and economies of scale.
Design and manufacturing has been consolidated (and sometimes outsourced) in order to cut costs. Manufacturers have also focused their attentions on industry-standard interconnection schemes, in an attempt to drive customers towards off-the-shelf solutions.
Their theory is that reduced customisation will allow them to cut their overheads: and making fewer product types in larger quantities cuts manufacturing costs.
Such an approach, however, leaves a sizeable minority of customers with a problem if their application doesn’t lend itself exactly to an off-the-shelf solution. Rather than shoehorning in a standard design that barely meets requirements – or worse, necessitates a system re-design – these customers need custom or semi-custom solutions, and often on a fast turnaround.
This creates a major opportunity for companies such as ourselves at Sabritec, Hypertac Europe and Hypertac/Hypertronics, which can satisfy the needs of such customers. To call it a “niche” is to do it an injustice, for as a rule, it covers any requirement outside mainstream consumer and computing markets.
Not just familiar high-reliability areas such as the military, aerospace, and medical markets, but many other applications – for instance industrial, mass-transit, or test and measurement – that require something out of the ordinary in terms of quality, density or speed of transmission.
The only catch is that the infrastructure and expertise required to serve these customers is very different from those required in commodity markets.
First of all, to carry off such a strategy requires problem-solving resources and engineering to be placed close to the customer. In this way customers get what they need, whether it’s a single specialist contact, a customised connector, a cable harness or a complete pre-tested sub-system.
As well as the engineering and product range requirements, this kind of strategy also works best if the supplier takes an integrated project management approach. Such a strategy requires that the supplier’s teams function as an extension of the customer’s design department, and are focused on making the customer’s project a success.
Like many manufacturers that engage their customers on this level, our company finds knock-on benefits: we end up designing and supplying much more than just a connector, and are engaged with the customer at many levels of the process, from conception and design to final production and quality control.
Despite the increasing ease with which products can be shipped around the world, in such a context local manufacturing support can also be an asset. Specific geographies tend to have individual areas of expertise – for instance, as a region Europe has strengths in civil aerospace and rail traction – and these can be reflected in the abilities of manufacturing plants to really understand and satisfy the needs of such vertical specialisations.
Local manufacturing is also often the best solution when fast turnarounds are required, particularly in prototyping or pre-production phases of a project. Part of offering something “a little bit special” is having the manufacturing agility to respond to changing requirements, which again often befits a smaller production unit.
Of course, localisation is not in itself a panacea. No company can be everywhere, and so a strong core ethos needs to be fostered that ensures all customers get the support they need: wherever they are. Equally significant is the ability to give global customers access to the skills and expertise of the most appropriate engineers and project managers for their particular requirement.
This implies giving the whole organisation access to knowledge, skills and products developed in each engineering or manufacturing centre: always balancing with the customer confidentiality protocols common in custom projects. From this point of view, training, shared processes and common technologies are highly beneficial.
Finally, and perhaps most importantly, companies addressing specialist requirements need to stay engineering-oriented, so that they can always offer solutions to problems that might defeat providers of off-the-shelf products. Where interconnection is concerned, these attributes commonly include density, speed, and resistance to shock.
But there are an increasing number of other factors that apply to interconnection and other areas: for instance flame resistance and elimination of toxic combustion products; and EMI. Knowledge of local and global standards in areas such as these can be a major contributor to the success of any project.
Despite the increasing commoditisation and standardisation of the interconnection market, a large proportion of customers continue to require a degree of customisation, or have special requirements. As in most sectors of today’s electronics market, the savvy interconnection solutions provider can build a business on satisfying such needs - but only with the appropriate people and infrastructure in place, and a keen understanding of its customers, wherever they are.
Roland Carter is managing director, Connectors, at Smiths Interconnect