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Jabil Circuit - Contract
Manufacturing - Category Directory
(727)
577-9749
10560
Dr. Martin Luther King, Jr. Street North,
St. Petersburg, Florida 33716
www.jabil.com
Sales
$4.7
billion
Business Description
We
are one of the leading worldwide independent providers of electronic
manufacturing services (“EMS”). We design and manufacture electronic circuit
board assemblies and systems for major original equipment manufacturers
(“OEMs”) in the automotive, computing and storage, consumer products,
instrumentation and medical, networking, peripherals and telecommunications
industries. We serve our customers with dedicated work cell business units
that combine high volume, highly automated, continuous flow manufacturing
with advanced electronic design and design for manufacturability
technologies. Our largest customers currently include Alcatel Business
Systems (“Alcatel”), Cisco Systems, Inc. (“Cisco”), Hewlett-Packard Company
(“HP”), Johnson Controls, Inc., Lucent Technologies, Inc. (“Lucent”),
Marconi Communications plc (“Marconi”), Nokia Corporation, Quantum
Corporation (“Quantum”), Royal Philips Electronics (“Philips”) and Valeo S.A.
(“Valeo”). For the fiscal year ended August 31, 2003, we had net revenues of
approximately $4.7 billion and net income of $43.0 million.
The EMS industry experienced rapid change and growth over most of the past
decade as an increasing number of OEMs outsourced their manufacturing
requirements. In mid-2001, the industry’s revenue declined as a result of
significant cut backs in its customers’ production requirements, which was
consistent with the overall global economic downturn. Nonetheless, OEMs have
continued to turn to outsourcing in order to reduce product cost; achieve
accelerated time-to-market and time-to-volume production; access advanced
design and manufacturing technologies; improve inventory management and
purchasing power; and reduce their capital investment in manufacturing
resources. Industry revenues have slowly begun to increase again over the
last year as customer production requirements generally began to stabilize.
We believe further growth opportunities exist for EMS providers to penetrate
the worldwide electronics markets.
We offer our customers significant turnkey EMS solutions that are responsive
to their outsourcing needs. Our work cell business units are capable of
providing our customers with varying combinations of the following services:
• integrated design and engineering;
• component selection, sourcing and procurement;
• automated assembly;
• design and implementation of product testing;
• parallel global production;
• systems assembly and direct order fulfillment; and
• repair and warranty.
We currently conduct our operations in facilities that are located in
Austria, Belgium, Brazil, China, England, France, Hungary, India, Ireland,
Italy, Japan, Malaysia, Mexico, Poland, Scotland, Singapore and the United
States. Our parallel global production strategy provides our customers with
the benefits of improved supply-chain management, reduced inventory
obsolescence, lowered transportation costs and reduced product fulfillment
time.
Our principal executive offices are located at 10560 Dr. Martin Luther King,
Jr. Street North, St. Petersburg, Florida 33716, and our telephone number is
(727) 577-9749. Our website is located at http://www.jabil.com. Through a
link on the “Investors” section of our website, we make available the
following filings as soon as reasonably practicable after they are
electronically filed with or furnished to the Securities and Exchange
Commission (“SEC”): our annual report on Form 10-K, our quarterly reports on
Form 10-Q, our current reports on Form 8-K and any amendments to those
reports filed or furnished pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934. All such filings are available free of
charge. Information contained in our website, whether currently posted or
posted in the future, is not a part of this document or the documents
incorporated by reference in this document. We were incorporated in Delaware
in 1992.
EMS Industry Background
The EMS industry is composed of companies that provide a range of
manufacturing services for OEMs. The EMS industry experienced rapid change
and growth over most of the past decade as an increasing number of OEMs have
chosen an external manufacturing strategy. In mid-2001, the industry’s
revenue declined as a result of significant cutbacks in its customers’
production requirements, which was consistent with the overall global
economic downturn. Industry revenues have slowly begun to increase again
over the last year as customer production requirements generally began to
stabilize and OEMs continue to turn to outsourcing versus internal
manufacturing. Factors driving OEMs to favor outsourcing to EMS providers
include:
• Reduced Product Cost. EMS providers are able to manufacture products at a
reduced total cost to OEMs. These cost advantages result from higher
utilization of capacity because of diversified product demand and,
typically, a higher sensitivity to elements of cost.
• Accelerated Product Time-to-Market and Time-to-Volume. EMS providers are
often able to deliver accelerated production start-ups and achieve high
efficiencies in transferring new products into production. EMS providers are
also able to rapidly scale production for changing markets and to position
themselves in global locations that serve the leading world markets. With
increasingly shorter product life cycles, these key services allow new
products to be sold in the marketplace in an accelerated time frame.
• Access to Advanced Design and Manufacturing Technologies. Customers of EMS
providers may gain access to additional advanced technologies in
manufacturing processes, as well as product and production design. Product
and production design services may offer customers significant improvements
in the performance, cost, time-to-market and manufacturability of their
products.
• Improved Inventory Management and Purchasing Power. EMS providers are able
to manage both procurement and inventory, and have demonstrated proficiency
in purchasing components at improved pricing due to the scale of their
operations and continuous interaction with the materials marketplace.
• Reduced Capital Investment in Manufacturing. OEMs are increasingly seeking
to lower their investment in inventory, facilities and equipment used in
manufacturing in order to allocate capital to other activities such as sales
and marketing, and research and development (“R&D”). This shift in capital
deployment has placed a greater emphasis on outsourcing to external
manufacturing specialists.
Our Strategy
We are focused on expanding our position as one of the leading global EMS
providers to major OEMs. To achieve this objective, we continue to pursue
the following strategies:
• Establish and Maintain Long-Term Customer Relationships. Our core strategy
is to establish and maintain long-term relationships with leading OEMs in
expanding industries with the size and growth characteristics that can
benefit from highly automated, continuous flow manufacturing on a global
scale. Historically, we derived the majority of our growth from existing
customers. Over the last two years, we have experienced business growth from
existing customers and from new customers as a result of organic business
wins. Additionally, our acquisitions have meaningfully contributed to our
business growth. We focus on maintaining long-term relationships with our
customers and seek to expand these relationships to include additional
product lines and services. In addition, we have a focused effort to
identify and develop relationships with new customers who meet our profile.
• Utilize Work Cell Business Units. Each of our work cell business units is
dedicated to one customer and operates with a high level of autonomy,
utilizing dedicated production equipment, production workers, supervisors,
buyers, planners and engineers. We believe our work cell business units
promote increased responsiveness to our customers’ needs, particularly as a
customer relationship grows to multiple production locations.
• Expand Parallel Global Production. Our ability to produce the same product
on a global scale is a significant requirement of our customers. We believe
that parallel global production is a key strategy to reduce obsolescence
risk and secure the lowest landed costs while simultaneously supplying
products of equivalent or comparable quality throughout the world.
Consistent with this strategy, we have acquired operations in Austria,
Belgium, Brazil, China, England, France, Hungary, India, Italy, Japan,
Malaysia, Mexico, Poland, Scotland and Singapore to increase our European,
Asian and Latin American presence.
• Offer Systems Assembly and Direct Order Fulfillment. Our systems assembly
and direct order fulfillment services allow our customers to reduce product
cost and risk of product obsolescence by reducing total work-in-process and
finished goods inventory. These services are available at all of our
manufacturing locations.
• Pursue Selective Acquisition Opportunities. OEMs have continued divesting
internal manufacturing operations to EMS providers. In many of these
situations, the OEM enters into a customer relationship with the EMS
provider that acquires the operations. Our acquisition strategy is focused
on obtaining OEM operations that compliment our geographic footprint and
diversify our business into new industries, while providing opportunities
for long-term outsourcing relationships. See “Factors Affecting Future
Results — We may not achieve expected profitability from our acquisitions.”
Our Approach to Manufacturing
In order to achieve high levels of manufacturing performance, we have
adopted the following approaches:
• Work Cell Business Units. Each of our work cell business units is
dedicated to one customer and is empowered to formulate strategies tailored
to its customer’s needs. Each work cell business unit has dedicated
production lines consisting of equipment, production workers, supervisors,
buyers, planners and engineers. Work cell business units have direct
responsibility for manufacturing results and time-to-volume production,
promoting a sense of individual commitment and ownership. The work cell
business unit approach is modular and enables us to grow incrementally
without disrupting the operations of other work cell business units.
• Business Unit Management. Our Business Unit Managers coordinate all
financial, manufacturing and engineering commitments for each of our
customers at a particular manufacturing facility. Our Business Unit
Directors oversee local Business Unit Managers and coordinate on a worldwide
basis all financial, manufacturing and engineering commitments for each of
our customers that have both domestic and global production requirements.
Jabil’s Business Unit Management has the authority, within high-level
parameters set by executive management, to develop customer relationships,
make design strategy decisions and production commitments, establish pricing
and implement production and electronic design changes. Business Unit
Managers and Directors are also responsible for assisting customers with
strategic planning for future products, including developing cost and
technology goals. These Managers and Directors operate autonomously, within
high-level parameters set by executive management, with responsibility for
the development of customer relationships and direct profit and loss
accountability for work cell business unit performance.
• Continuous Flow. We use a highly automated, continuous flow approach where
different pieces of equipment are joined directly or by conveyor to create
an in-line assembly process. This process is in contrast to a batch
approach, where individual pieces of assembly equipment are operated as
freestanding work-centers. The elimination of waiting time prior to
sequential operations results in faster manufacturing, which improves
production efficiencies and quality control, and reduces inventory
work-in-process. Continuous flow manufacturing provides significant cost
reduction and quality improvement when applied to volume manufacturing.
• Computer Integration. We support all aspects of our manufacturing
activities with advanced computerized control and monitoring systems.
Component inspection and vendor quality are monitored electronically in
real-time. Materials planning, purchasing, stockroom and shop floor control
systems are supported through a computerized Manufacturing Resource Planning
system, providing customers with a continuous ability to monitor material
availability and track work-in-process on a real-time basis. Manufacturing
processes are supported by a real-time, computerized statistical process
control system, whereby customers can remotely access our computer systems
to monitor real-time yields, inventory positions, work-in-process status and
vendor quality data. See “Technology” and “Factors Affecting Future Results
— Any delay in the implementation of our information systems could disrupt
our operations and cause unanticipated increases in our cost.”
• Supply Chain Management. We utilize an electronic commerce system/
electronic data interchange and web-based tools with our customers and
suppliers to implement a variety of supply chain management programs. Our
customers utilize these tools to share demand and product forecasts and
deliver purchase orders. We use these tools with our suppliers for
just-in-time delivery, supplier-managed inventory and consigned
supplier-managed inventory.
Our Design Services
We offer a wide spectrum of value-add design services for products that we
manufacture for our customers. We provide these services to enhance our
relationships with current customers and to help develop relationships with
new customers. We offer the following design services:
• Electronic Design. Our electronic design team provides electronic circuit
design services, including application-specific integrated circuit design
and firmware development. These services have been used to develop a variety
of circuit designs for cellular telephone accessories, notebook and personal
computers, servers, radio frequency (“RF”) products, video set-top boxes,
optical communications products, personal digital assistants, communication
broadband products and automotive and consumer appliance controls.
• Industrial Design Services. Our industrial design team assists in
designing the “look and feel” of the plastic and metal enclosures that house
printed circuit board (“PCB”) assemblies and systems.
• Mechanical Design. Our mechanical engineering design team specializes in
three-dimensional design and analysis of electronic and optical assemblies
using state of the art modeling and analytical tools. The mechanical team
has extended Jabil’s product offering capabilities to include all aspects of
industrial design, advance mechanism development and tooling management.
They are staffed to support Jabil customers for all development projects,
including turnkey system design and design for manufacturing activities.
• Computer Assisted Design. Our computer assisted design (“CAD”) team
provides PCB design and other related services. These services include PCB
design services using advanced CAD/computer assisted engineering tools, PCB
design testing and verification services, and other consulting services,
which include the generation of a bill of materials, approved vendor list
and assembly equipment configuration for a particular PCB design. We believe
that our CAD services result in PCB designs that are optimized for
manufacturability and cost, and accelerate the time-to-market and
time-to-volume production.
• Applied R&D. The goal of Jabil’s Applied R&D group is to make Jabil more
profitable by pairing with our OEM partners and establishing new product
roadmaps. Applied R&D is a launching pad for new technologies and concepts
in specific growth areas. This team provides system-based solutions to
engineering problems and challenges.
As we increase our efforts to offer design services, we are exposed to
different or greater potential liabilities than those we face from our
regular manufacturing services. See “Factors Affecting Future Results — Our
increasing design services offerings may increase our exposure to product
liability, intellectual property infringement and other claims.”
Our Systems Assembly, Test and Direct Order Fulfillment Services
We offer systems assembly, test and direct order fulfillment services to our
customers. Our systems assembly services extend our range of assembly
activities to include assembly of higher-level sub-systems and systems
incorporating multiple PCBs. We maintain significant systems assembly
capacity to meet the increasing demands of our customers. In addition, we
provide testing services, based on quality assurance programs developed with
our customers, of the PCBs, sub-systems and systems products that we
manufacture. Our quality assurance programs include circuit testing under
various environmental conditions to try to ensure that our products meet or
exceed required customer specifications. We also offer direct order
fulfillment services for delivery of final products we assemble for our
customers.
Our Repair and Warranty Services
As an extension of our manufacturing model and an enhancement to our total
global solution, we offer repair and warranty services to our customers from
strategic hub locations. We have the ability to service our OEM partners’
products following completion of the traditional manufacturing and
fulfillment process.
Technology
We believe that our manufacturing and testing technologies are among the
most advanced in the industry. Through our R&D efforts, we intend to
continue to offer our customers among the most advanced high volume,
continuous flow manufacturing process technologies. These technologies
include surface mount technology, high-density ball grid array, chip scale
packages, flip chip/direct chip attach, advanced chip-on-board, thin
substrate processes, reflow solder of mixed technology circuit boards,
lead-free processing, densification, RF process optimization and other
testing and emerging interconnect technologies. In addition to our R&D
activities, we are continuously making refinements to our existing
manufacturing processes in connection with providing manufacturing services
to our customers. See “Factors Affecting Future Results — We may not be able
to maintain our engineering, technological and manufacturing process
expertise.”
Research and Development
To meet our customers’ increasingly sophisticated needs, we continually
engage in R&D activities. These efforts consist of design of the circuit
board assembly, mechanical design and the related production design
necessary to manufacture the circuit board assembly in the most
cost-effective and reliable manner. Additional R&D efforts have focused on
new optical, test engineering, RF and wireless failure analysis
technologies. We are also engaged in the R&D of new reference designs
including network infrastructure systems, handset convergent devices,
wireless and broadband access products, consumer products and storage
products. Design centers are located in St. Petersburg, Florida; Auburn
Hills, Michigan; Vienna, Austria; Hasselt, Belgium; and Shanghai, China. See
“Factors Affecting Future Results — We may not be able to maintain our
engineering, technological and manufacturing process expertise.”
Competition
The EMS industry is highly competitive. We compete against numerous domestic
and international manufacturers, including Celestica, Inc., Flextronics
International, Sanmina — SCI Corporation and Solectron Corporation. In
addition, we may in the future encounter competition from other large
electronic manufacturers that are selling, or may begin to sell, electronic
manufacturing services. Most of our competitors have international
operations, significant financial resources and some have substantially
greater manufacturing, R&D and marketing resources than we do. We also face
potential competition from the manufacturing operations of our current and
potential customers, who are continually evaluating the merits of
manufacturing products internally against the advantages of outsourcing to
EMS providers. In addition, in recent years, original design manufacturer (“ODM”)
companies that provide design and manufacturing services to OEMs, have
significantly increased their share of outsourced manufacturing services
provided to OEMs in markets such as notebook and desktop computers, personal
computer motherboards, and consumer electronic products. Competition from
ODMs, such as Hon Hai Precision Industry Co., Ltd., may increase if our
business in these markets grows or if ODMs expand further into or beyond
these markets.
We believe that the primary basis of competition in our targeted markets is
manufacturing capability, price, manufacturing quality, advanced
manufacturing technology, design expertise, time-to-volume production,
reliable delivery and regionally dispersed manufacturing. Management
believes we currently compete favorably with respect to these factors.
Contract Manufacturers in the Directory
Benchmark Electronics
Celestica
Flextronics
Jabil Circuit
Sanmina-SCI Corp.
Solectron
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