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..in's
manufacturing strategy p.44
•
Trends in MPUs and MCUs
p.50
www.my-esm.comDECEMBER 2004
Electro
i
;
Supply&R/lanufacturing
FOR OEM AND EMS MANA G E R S WITH GLOBAL INFLUENCE
VOLUME 1 • NO. 9
World Peace Group'sglobal distributionambitions
^
page 38
Documentir^^^
 
\
\
X
Brian Pokorny, Garmin 's director of operatiorefers to the company's manufacturingas "strategic insourcing."
 
'1
*<&$
DDDDDD
Garmin has made it big in
GPS,
in part by building its own products.If
"insourcing"
works for Garmin, maybe it could workfor your company.
BY
ARIK
HESSELDAHL
he global-positioning system hardware business is much like any other consumer electronics sector. Crowded, fiercely competitiveand highly price-sensitive, it sees new competitors popping up continually, ready tochallenge the old guard.What's more, very little about
-the
coretechnology is proprietary. Signals from the 27
U.S.
Department of Defense satellites are freeand available to anyone. From that standpoint, GPS receivers should be a commodity productlike AM/FM radios. And the leading companies shouldfollow conventional wisdom and outsource everythingto achieve the lowest possible cost.And yet they're not commodity products. And no, the
No.
1 company in the business does not believe in extreme outsourcing. Rather, top-ranked Garmin International Inc. regards its ability to bring its own manufacturing and engineering resources to bear on the productionprocess as a strategic advantage, violating nearly everyseemingly obvious rule in the book of cost control.Just ask
Min
Kao, co-founder and CEO of Garmin,and he'll tell you how owning the manufacturing plantshas helped Garmin capture a commanding market sharein nearly every GPS product segment. The strategy haspaid off with a gross margin above 50 percent andgrowing, Kao said.Garmin makes GPS receivers that tell motorists, civilaviation pilots, hikers and boaters, where they are, andhow far they are from where they're going. Last year,Garmin sold more than 2 million units, up half a million
v-
DECEMBER 2004 | ELECTRONICS SUPPLY & MANUFACTURING I
d
of 00

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