Top Seven Reasons to Partner with aDesign & Manufacturing Services Company

ABOUT JABILEvery device manufacturer is looking for the best way to get new products to market as quickly, efficiently and cost-effectively as possible, particularly in today’s climate of tough global competition. Increasing cost pressures, growing demand from emerging regions; and new technological advances drive device makers to outsourcing. Here are seven of the most compelling.

Built on a foundation of empowered employees in over 90 plants in 23 countries, Jabil strives to be the world’s leading global manufacturing solutions partner.

Jabil’s unique combination of global expertise, ingenuity, analytics and financial performance has contributed to the success of the world’s most well known brands.

Reduce or Control Costs

Top Reasons Why Companies Outsource Manufacturing

Forty six percent of U.S. companies cited their top reason for outsourcing was to reduce operating costs and manufacturing accounts for 53 percent of the outsourcing sectors. According to Booz Allen Hamilton, companies realize a 15 percent cost reduction through outsourcing and more than 20 percent of companies achieved savings of greater than 30 percent.

With increasing labor costs worldwide, smart global manufacturing partners are investing in automation to reduce operating and capital costs – with good reason. According to a Credit Suisse report on automation, the Chinese government alone plans to increase minimum wages by 13 percent through 2015.

Reduce or Control Costs

Free Up Internal Resources

Improve Business or Customer Focus

Accelerate Company Reorganization

Accelerate Project

Gain Access to New Management Expertise

Reduce Time-to-Market

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%PERCENTAGE OF COMPANIES

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But 20% of companies achievecost savings of

30+%

53%of outsourcing is manufacturing

46%U.S. companies outsource toreduce costs

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Free-up Internal ResourcesCompanies like Nokia and Cisco outsource to global manufacturing partners to focus on their core differentiators—design, distribution and customer service. In their tremendously accelerated ecosystem, technology changes rapidly.

By partnering with global manufacturers, they can scale-up quickly and flexibly while mitigating business risks. In other words, competitive pressures require original equipment manufacturer engineers and designers to start working on the next product immediately, leaving little time to optimize a current device’s design and manufacturing process. A design and manufacturing services partner can get such back-burner projects moving quickly and efficiently, leading to potentially new revenue streams.

Innovation is the differentiator for a company. But if an organization’s core business isn’t manufacturing, managing this in-house can take precious time and resources away from the innovation process. That’s the conclusion reached by Procter & Gamble in 2000, when Alan Lafley took the helm as CEO. Alan decided to look beyond the conventional in-house-do-it-ourselves model. By embracing outsourcing, Procter & Gamble’s Global Business Services unit reduced cost as a percentage of sales by 33 percent for its outsourced operations.

Improve Business or Customer Focus “Outsourcing is nothing less than

the wholesale restructuring [of] the corporation around our core competencies and outside relationships. The traditional outsourcing emphasis on tactical benefits like cost reduction has more recently been replaced by productivity, flexibility, speed, and innovation in developing business applications, and access to new technologies and skills.”

A design and manufacturing services partner can get projects moving quickly and efficiently, leading to potentially new revenue streams

Michael Corbett, Executive Director, International Association of Outsourcing Professionals

ACCELERATE COMPANY REORGANIZATION AND PROJECTSPanasonic is a great example of how a major organization is taking stock of its core competencies and outsourcing things like manufacturing as part of restructuring initiatives. To turn-around an unprofitable business, Panasonic plans to increase outsourcing of its optical manufacturing business. By outsourcing, Panasonic believes that it can shorten development timeframes and more efficiently use resources. Michael Corbett, executive director of the International Association of Outsourcing Professionals says it best:

Gain Access to New ExpertiseIn the healthcare industry, miniaturized, non-surgical, minimally invasive surgical devices demand increasingly sophisticated, smaller and easier-to-use electronics. Furthermore, manufacturing and assembling these devices may not be a core competency of device companies.

As devices get smaller and the demand for increasing capabilities grows, engineers face challenges in moving from the macro scale to the micro and nano scales. Miniaturization will change the world, but new tools, processes and expertise are needed to tackle the challenges and embrace the promises of miniaturization. Due to higher costs associated with miniaturization, it’s up to advanced manufacturers to solve problems related to electronics and the physics and chemistry of cooling, pc-board production, power distribution and RF signal transmission.

In the healthcare industry, miniaturized, non-surgical, minimally invasive surgical devices demand increasingly sophisticated electronics

Manufacturing partners leverage diverse experience with issues, materials, technologies and processes

U.K.-based Juniper Research projects the number of wearable devices shipped will rise from about 13 million in 2013 to 130 million in 2018, and that the size of the market will grow from $1.4 billion in 2013 to $19 billion in 2018(Juniper Research)

Business Insider Intelligence projects shipments of 100 million pieces in 2014 and believes the market will ultimately be worth about $12 billion per year.

However, getting smaller isn’t even always about making parts smaller. Sometimes, it is about redesigning things to fit better in smaller containers or by functionally integrating components, allowing the product to deliver the same functionality with fewer parts. Think about the digital automobile dashboard displays that, in the past, were physical gages. And how big would a computer really need to be if you can project the user interface? Sitting at your desk, you may not care, but in a battlefield situation, ruggedized miniaturization makes all the difference.

And innovations, especially wearables, pose ongoing design and manufacturing challenges. With huge potential market opportunities, companies cannot afford to fall behind the competition.

Innovations, especially wearables, pose ongoing design and manufacturing challenges

Wearables Opportunity

Global design and manufacturing services partners with

incredibly specialized knowledge around a huge range

of industries provide superior expertise and facilities to

support novel applications – without the delays and costs

of acquiring experts in-house.

Think about it. While device manufacturers focus narrowly

on specific markets, manufacturing partners leverage

diverse experience with issues, materials, technologies

and processes, helping their customers avoid protracted

efforts or mistakes. Further, if a manufacturing partner

does not have needed expertise, it usually has a

relationship with a trusted partner that does.

13 millionWEARABLES SHIPPED

100 millionWEARABLES SHIPPED

2013

ProjectedMarket Growth

2014 2018

130 millionWEARABLES SHIPPED

$19 b$12 b$1.4 b

Benefits of Value Engineering

Even with existing product lines, manufacturing partners provide unique

expertise through value engineering. Everything from reducing part count and

assembly steps to leveraging a robust supply chain to reduce supply chain

disruptions adds tremendous value for the customer. And complementing

technical expertise, larger manufacturing partners typically have extensive

regulatory knowledge and lean practices. With extensive engineering

design and testing expertise, manufacturing partners can reduce the time-

to-market and associated total cost of ownership. In fact, simply engaging

a manufacturer’s design team into the value engineering process typically

boosts savings by 25 percent. For example, according to a report by GenPact,

a global energy equipment manufacturer reduced time to market by 26

weeks and material costs by 45 percent through collaborative design and

development for mechanical and electrical assemblies.

30%

20%

10%

0%

Traditional Value

EngineeringValue Engineering

+ Design

Design and manufacturing services partners can help companies accelerate time-to-market for a new product, speeding up return on investment. For low-volume devices in particular, companies may find it cost-prohibitive to hire the experts and purchase the technologies required.

Because many global manufacturers already have facilities, staff, equipment and supply chains in place, they can design, optimize, test or manufacture quickly. Further, large organizations offer a local presence in key regions such as the BRIC (Brazil, Russia, India, and China) nations, allowing for production and distribution in local markets. Existing scalable manufacturing infrastructure and a network of established suppliers enable fast, in-country turnarounds of new projects.

Reduce Time-to-Market

ConclusionEngaging with a design and manufacturing services partner as a strategic resource during device development offers device companies a host of advantages, including speed, specialized expertise, diverse experience, flexibility and global reach to optimize efficiency and deliver the fastest and largest return on investment in a new project.

What Jabil Brings

Flexibility and cost avoidance are keystones of Jabil’s Value Engineering Team. In fact, value engineering drives 40 percent of active design. That’s how we play an integral role in intelligently designed and engineered products that improve the value, speed and long-term success of customers across multiple industries.

With deep expertise and global partner relationships, Jabil supply chain experts utilize best practices and regional know-how to partner with some of

the world’s most notable brands. One of the most comprehensive examples of how Jabil manages complexity lies with its homegrown business intelligence tools and entrepreneurial engineers who build innovative, sophisticated, business intelligence tools for the entire supply chain. These tools provide real-time, actionable insights to customers and business managers throughout the entire supply chain organization.

About Jabil

Built on a foundation of empowered employees in over 90 plants in 23 countries, Jabil strives to be the world’s leading global manufacturing solutions partner.

Jabil’s unique combination of global expertise, ingenuity, analytics and financial performance has contributed to the success of the world’s most well known brands.

We help companies design, build and take their products to market quickly, affordably and efficiently. But more than that, Jabil helps customers intelligently design their supply chains to be agile, economical and effective even in uncertain times.

Aim Higher.

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