Technology Forecasters, Inc.
Global Consulting and Research for Outsourcing and the Environment
A new bit of alphabet soup has crept into the electronics manufacturing lexicon. “JDM” - Joint Design Manufacturers - an alternative that more OEMs have begun to consider when reviewing their outsourcing options.
Who exactly are these JDMs and what exactly do they do?
The concept has been around for quite some time, especially in government work. You’ll find many examples of JDM - though not under that name - in the maze of military and aerospace contracting, subcontracting and sub-subcontracting. But this particular bit of alphabet soup has only recently begun to be used in the commercial electronics sector.
Briefly, as I explained in a presentation at the recent Quarterly Forum, the JDM typically does some portion of the design and then manufactures the product. This allows the OEM to focus design resources on the more consequential IP in the product, while the JDM handles the routine design elements and supports the manufacturing ramp-to-volume.
We don’t know of many “pure play” JDMs, but rather see larger tier EMS companies, design service bureaus and others - even some OEMs to other OEMs - providing these services under various names - JDM, CDM (concurrent design manufacturing), DMS (design and manufacturing services), and no doubt other monikers we’re not aware of yet.
There’s scant market data on this approach. Aside from the military and aerospace, we think most of the JDM work is being done in communications, computer and consumer segments, perhaps as a consequence of the design resources divested by OEMs in these market sectors in the past decade.
We estimate JDM services account for less than 1.5 percent of annual EMS revenues, which puts it south of the $1.5 billion mark.
There is likely much more to learn about the JDM play, and we would like to know TFI member experiences. Let us hear about what insights you have gained in this space so we can all gain a better sense of this emerging trend.
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Hi Charlie,
Glad you brought this up. Sypris, among others, has for some time used JDM to describe its defense design/manufacture work; Jeff Kaylor of Sypris presented the following paper on this in a session I chaired at SMTAI in 2004.
http://www.sypris.com/library/documents/published_smtai_paper_9_27_04.pdf
I think the term “joint” might be splitting hairs a bit: Even when they outsource design, it’s probably the rare OEM that totally throws its designs over the wall to the EMS guys. But when it comes to characterizing the market, I suppose the deeper we can dig, the better.
Charlie,
I remember when GET Mfrg HK Ltd. did a true JDM with Sharp in Nara, Japan. GET sent our engineers to Nara and then Sharp sent their engineers to Shenzhen to work with our team.
The result was a cutting-edge product that lasted several years, got private labelled to Xerox and brought other lines of business to GET.
Of course - as with any Japanese relationship - we had some “getting to know you” to do and that started with doing CM work on some simple and then increasingly more complex projects before the big JDM project.
I’m happy to answer any questions about JDM - Call me at 510-251-8885
John Constantine
ELITE Industrial Group
Here in the UK there have been many “alliances” between manufacturing companies and design companies to offer layout prior to manufacture (even the global tier 1 ems providers seldom offered in country design in the UK) however Jaltek have taken the process to the next stage by offering Integrated Design and Manufacturing Services (IDMS - more alphabet soup I fear) which starts at conceptual design and flows all the way to first production (including virtual manufacturing)and this has been successfully taken up by some very big global OEMs as the true benefits of ownership and company wide commitment provide real measurable benefits. We will shortly be publishing an article on IDMS - I will forward a copy to you guys and post it on our website. It seems that evolution is becoming revolution.
India as an attractive destination for EMS is well accepted by many.When it comes to designing the general feel is that the talent within India is still maturing and have some way to go.Good Quality design houses are still in the making.
Here i feel a blend of joint designing activity can be explored where in some of the functions can be done in India in Sync and this can prove to be cost effective.