2007
a n n u a l r e p o r tC o n t e n t s
A brief look at PartnerTech 4
2007 at a glance 4
A word from the CEO 6
Market 8
Business concept and strategy 14
Skills and services 20
Quality 26
Employees and values 28
Operations in figures 30
2007 in brief 32
Share and shareholders 34
Corporate governance 36
Five-year summary 38
Management report 40
Appropriation of profits 41
Risk management 42
Income statement 44
Remarks on the income statement 45
Balance sheet 46
Cash flow statement 48
Shareholders' equity 49
Remarks on the balance sheet
and cash flow statement 50
Accounting policies 51
Notes 54
Auditors' report 64
Definitions 65
Board of Directors 66
Group management 68
Addresses 70
Annual general meeting 71
Economic information 2008 71
europe's leaDInG
ContraCt ManuFaCturer
oF BusIness-to-BusIness
proDuCts
A brief look At PArtnertech
PartnerTech develops and manufactures products under contract for leading companies, primarily in telecommuni- cations, IT, engineering and medical technology. To satisfy the needs of our customers as effectively as possible, we have broken down the market into three business segments.
PartnerTech's role with its customers is to provide expertise and take an integrated approach. That role re- quires the ability to manage the entire product life cycle, along with leading-edge skills in electronics, mechanics and systems integration. Those qualities allow us to create solutions that strengthen the customer's competitiveness.
PartnerTech has approximately 1,800 employees at plants in Sweden, Norway, Finland, Poland, the UK, the United States and China. PartnerTech AB, the parent company, has its head office in Malmö, Sweden and is listed on the OMX Nordic Exchange Stockholm.
www.partnertech.com
2007 At A glAnce
After a number of years of rapid growth and acquisitions, PartnerTech enjoyed less profitability in 2007. As a result, the company began to consolidate and streamline its organization to ensure synergies and economies of scale.
An ongoing action program is expected to steadily boost earnings in 2008.
ó Net sales were SEK 2,643.6 million (3,057.2).
ó The operating loss was SEK -17.7 million (180.0).
ó The loss after tax was SEK -24.8 million (122.6).
ó Earnings per share after tax totaled SEK -1.96 (9.79).
ó The Board proposes that the annual general meeting distribute no dividend (SEK 3.00 per share for 2006) for the 2007 fiscal year.
ó The equity/assets ratio was 38.4% (36.6) on December 31.
ó The company had a new CEO in October.
Mikael Jonson left the post and was succeeded by Rune Glavare.
Vision
Our vision is to be the obvious choice of contract manufacturer in the business-to-business segment.
Business concept
PartnerTech develops and manufactures products under contract for leading businesses, primarily in telecommunications, IT, the engineering industry and medical technology.
As a systems supplier,
we proceed from our core
expertise in the combination
of electronics and mechatronics
to enhance the profitability
and competitiveness of our
customers.
KEy RATIOS*
Amounts in SEK MIllION (unless otherwise stated) 2007 2006 2005 2004 2003
Net sales 2,643.6 3,057.2 2,013.9 1,737.6 1,339.7
Operating profit/loss -17.7 180.0 88.0 73.5 -18.7
Operating margin, % -0.7 5.9 4.4 4.2 -1.4
Return on operating capital, % -1.8 20.0 12.5 13.5 -3.9
Equity/assets ratio, % 38.4 36.6 35.2 33.7 35.1
Average no. of full-time employees 1,886 1,747 1,369 1,266 1,143
SEK million
1 200 1 000 800 600 400 200 0
Industry/Telecom Terminals/Machine Solutions
2003 1 400 1 600
2004 2005 2006 2007
NET SAlES By BuSINESS SEGMENT
80 70 60
PartnerTech 01
2007 50 40 30 20 10
0 02 03 04 05 06 07 08 09 10 11 12 SEK
90 100 110 120 130 140
ShARE PERFORMANCE VS. SAx INDEx
SEK million
2 000 1 750 1 500 2 250
2003 1 250
1 000 750 500 250
0 -8
-6 -4 -2 0 2 4 6 8
%
Net sales, SEK million Operating margin, %
12
2004 2005 2006 2007
2 500
10
2 750 14
3 000 3 250
16 18
NET SAlES AND OPERATING MARGIN*
* 2003 figures not recalculated in accordance with IFRS
WhAT WE hAVE DONE
We strengthened our organization in 2007, particularly in purchasing and sales, which involved assigning greater responsibility to our customers centers in their particular markets.
Our purchasing function plays a central role in obtaining input materials for our production units with short lead-times and at favorable prices. To achieve additional economies of scale, we have upgraded our strategic purchasing effort and consolidated our supplier base. On the purchasing side, we have also strengthened our relationships with Asian suppliers, including closer collaboration with our Chinese partner 3CEMS.
We have also invested in new machinery and equip- ment in electronics, mechanics and other areas, and we are continuing to invest in order to upgrade the group standard so that units can more effectively pass tasks back and forth. We have started to implement a new enter- prise system, initially in Åtvidaberg and Finland. The goal is to include the entire group during the course of 2008.
Furthermore we have strengthened our ties and ex- tended our cooperation with many customers, showing that we still have their confidence as a contract manu- PartnerTech had a slow year in 2007. Our sales and
earnings declined as the result of lower volumes from some of our large customers. But some volatility in orders received is not unusual for a contract manufacturer.
Our sales were higher than in 2005 and we have many satisfied customers.
To improve our profitability and customer service, we launched a major action program focused on con- solidating and streamlining our organization. The program is expected to generate steadily higher earnings in 2008.
In addition, we are taking other measures and have a strong customer base. As a result, we are looking ahead with confidence. We retain our strong position as a con- tract manufacturer of business-to-business products.
My optimism is based on faith in PartnerTech and the sector, as well as my previous experience. I have been a member of the PartnerTech Board since 2004, as well as the President and CEO since October 2007. I took over as CEO when Mikael Jonson left the company after nine years.
lookInG aheaD
RuNE GlAVARE, PRESIDENT AND CEO, PARTNERTECh AB
A W O R D F R O M T H E C E O
WhAT WE ARE DOING NOW
We want to communicate even more clearly that the PartnerTech Group has a powerful business concept, far-reaching technical expertise and a broad range of services. Although we are decentralized, making each customer center responsible for its particular market, we need to be even more uniform in certain respects, including the use of a common standard for machinery, working methods and processes.
The ability to share the skills that our various units possess is also vital to our growth. That's why four of our customer centers are now centers of excellence.
The purpose is to ensure world-class expertise and technology in a number of different areas and make them available to all of the group's units. The Åtvidaberg customer center will be clearly identified as a specialist in systems integration, Vellinge in electronics, Karlskoga in machining and Moss in enclosures.
We will also strengthen our customer team organ- ization in order to further improve our customer relation- ships. By offering services throughout the value chain, PartnerTech satisfies the growing need of its customers for an advanced offering. Each customer can then determine the scope of services that is optimum for its particular needs.
hOW WE ARE BOOSTING PROFITABIlITy IN 2008 After rapid growth and a number of acquisitions in previous years, we are now consolidating our organization and carrying out an action program to adapt to current volumes. The measures will lead to staff reductions affecting almost 150 employees – primarily at units in Sweden, Finland and the UK. The total program will save an estimated SEK 100 million on an annual basis. The impact on operating earnings is expected to grow steadily starting in the second quarter of 2008 and fully manifest in the fourth quarter.
Our main focus in 2008 is on sales and customer service. Above all, we have great potential for growth in markets where we already operate. Our local customer centers in Sweden, Finland, Norway, the UK and the United States provide a stable platform for moving forward. The improvement measures described above will reinforce our operating effectiveness and thereby make our customer service and performance even better.
We are not ruling out new acquisitions but are prioritizing consolidation. Our previous profitability targets remain, albeit long-term.
TEN yEARS AS A lISTED COMPANy
The PartnerTech share, which was listed on the Stockholm Stock Exchange in 1997, has generally performed very well. In 1997, the company had one unit (in Sweden) and reported sales of SEK 542 million. Now PartnerTech has 13 units in 7 countries and annual sales of SEK 2.6 billion. The company has stood up well when the going got tough. The telecom crisis in the early 2000s was a trial by fire for both PartnerTech and the sector as a whole. The problems in 2007 were not at all in the same league.
A contract manufacturer must be able to quickly ac- celerate and brake. PartnerTech exhibited an incredible ability to ramp up production in 2006 – to rapidly acquire resources and materials to handle customer orders. The challenge in 2007 was to consolidate and adapt. Because the market demands flexibility, the skills associated with ramping production up and down are highly valuable going forward.
FIllING A VACuuM IN ThE MARKET
PartnerTech is an experienced player in a relatively young sector. With our tried-and-true service offering, we can manage a customer's product throughout the value chain and its entire life cycle. In that sense, we are ahead of most other business-to-business contract manufacturers. Nor can many of them boast the breadth of production that PartnerTech provides. On the behalf of our customers, we manufacture everything from reverse vending machines to operator terminals and medical devices.
The need for contract manufacturing will continue to grow. There are no indications to the contrary. Manufac- turers of various kinds can become more effective by outsourcing production to a company like PartnerTech.
Businesses with an innovative product in areas such as information technology or medical equipment rarely or never have the option of establishing their own production.
A humble, wise approach gives PartnerTech excellent potential for growth. We are now among Europe’s biggest business-to-business contract manufacturers. We don't compete in any meaningful way with the global contract manufacturers that operate in an entirely different busi- ness segment. The structure of the market has created a vacuum and a niche for PartnerTech where we have every opportunity to grow even stronger than we already are.
Global players Large-scale production, mostly
� Breadboards
� Assembled printed circuit boards
� Encapsulated electronics For computer, consumer and telecom products
Local players Production, mostly
� Breadboards
� Assembled printed circuit boards
� Encapsulated electronics For large and medium-sized companies in the business- to-business segment
PartnerTech and global players Production of integrated systems for companies in the business- to-business segment
2000s
Consolidation and specialization
1990s
Telecom outsourced
1980s
PC production outsourced in the United States Contract manufacturing is a relatively young sector that
emerged in the United States in the late 1970s when some companies in the automotive, computer and other industries started outsourcing production.
Manufacturing and delivering as large volumes as possible was both a necessity and a challenge.
Using their own facilities would have required major investments in additional plants. Being able to deal with accelerating technological progress was also a must. To meet demand and time-to-market requirements, new vol- umes were outsourced to contract manu- facturers. The advantages of that approach showed up fairly quickly, and businesses gradu- ally turned over their existing plants, primarily to contract manufacturers. From the mid-1980s to early 1990s, computer and consumer electronics accounted for most production.
DOT-COM BOOM CREATED GREATER NEEDS The dot-com boom of the late 1990s reawakened the need for contract manufacturing. Ericsson and Nokia created a Nordic market for contract manufacturers of individual components and modules. As a result, contract manufacturers also came here, often by acquiring local players. The market expanded by almost 50% a year in the late 1990s (Source: Reed Electronics Research). The use of contract manufacturers by reputable companies like Ericsson and Nokia boosted acceptance of the sector and allowed it to take hold in Scandinavia before other parts of Europe.
ChANGING COuRSE
When demand by the telecom sector plunged in the early 2000s, the contract manufacturing sector experienced substantial difficulties. The big U.S. contract manufacturers began to consolidate and essentially abandoned Scand- inavia for low-cost Asian countries. That created a vacuum for Scandinavian-based contract manufacturers, including PartnerTech, which had to quickly adapt their business concepts and change course.
New customers could be found among medium-sized and big businesses in other segments, such as information technology and medical devices. Those companies re- alized that outsourcing to the right partner would lower their costs per manufactured unit and shorten time-to- market.
ContraCt ManuFaCturInG Is ChanGInG anD GrowInG
The market illustrated as a tree to simply describe its modus operandi.
A few global contract manufacturers focus on large-scale, high-volume production of electronic components and products for the computer, consumer and telecom industries. More locally based players are devoted to electronic components and products for the business-to- business segment. In addition, a few have a broad service offering that also permits them to manufacture integrated systems requiring mechanical and software expertise.
ClEAR BuSINESS lOGIC
The events of the early 2000s generated a business logic that has crystallized ever since. Development- intensive businesses can more cost-effectively invest in technology upgrades and market development than their own production resources. Outsourcing production, and
even other links in the value chain, frees up resources and capital for their own development and growth.
PartnerTech's early adjustment to the new realities en- abled it to win customers in other segments.
MIChAElA RANGER, PRODuCTION COORDINATOR BIRGITTA KINDAhl, ASSEMBlER SAMO KRIZ, REPAIRER/
TEAM lEADER
TOM GuNNAR JENSEN, DEPARTMENT hEAD lARS TORBJöRN ORMVOlD,
MEChANICAl DESIGN AND DEVElOPMENT
ThE MARKET TODAy
Contract manufacturers fall into two main categories:
ó Global players focused on high-volume products in the computer, consumer and telecom sectors. Due to the very high volumes, low costs and a global supply chain are decisive.
ó Small and medium-sized players that concentrate on products or components for the business-to-business segment. The biggest members of this category, includ- ing PartnerTech, have a broad offering of expertise and services, often participating in the product develop- ment effort. They may very well have a stronger local base.
TRENDS AND DRIVING FORCES
The contract manufacturing market is expanding. Product owners are increasingly likely to outsource production and other functions to free up capital, shorten time-to-market and gain access to an effective, global supply and distri- bution structure. Because they are most interested in selling their products while focusing on development and marketing, they need an integrated partner for product support, and often for aftersales services such as distribution.
VALUE-ADDED SERVICES
Greater cost and price pressure, as well as an increasingly global market, calls on contract manufacturers to provide services throughout the product life cycle. Many busi- nesses are starting to look for contract manufacturers who go beyond production and assembly to offer supplementary services such as industrial design, pro- duct development, prototype manufacture and new pro- duct introduction. Finding a partner that can provide these services at close quarters is particularly important because the products tend to be development-intensive and manufactured in small volumes, which requires constant dialog and technology sharing.
FROM SUPPLIER TO PARTNER
As a growing number of businesses outsource all or most of a product, close technical and business collaboration with the contract manufacturer emerges. The business relationship grows stronger while the contract manu- facturer must provide more in the way of expertise and quality than ever before. The large, global players are usually up to the task. But small and medium-sized contract manufacturers often fall short when it comes to breadth of expertise and services. As one of the few that have exhibited that kind of strength, PartnerTech has gained competitive advantages as a result.
TONI DICKERSON
SuPERVISOR MIChAEl JOhANSSON, MEChANICAl DESIGN ENGINEER öRJAN GRIP,
MEChANICAl DESIGN ENGINEER
MOVING PRODUCTION TO LOW-COST COUNTRIES In addition to offering geographic proximity, a contract manufacturer must be able to ensure low-cost production when a product enters a growth or maturity phase.
As a result, the trend of moving production to low- cost countries in Central Europe, Eastern Europe and Asia is expected to continue. An estimated 70% of all European electronic manufacturing services (EMS) pro- duction is already in Central and Eastern Europe. Although the figure primarily concerns consumer products (source:
MHM Information and Consultancy Services), the trend is visible in the business-to-business segment as well.
Taking advantage of a global purchasing function to create economies of scale while offering high-quality materials at competitive prices also remains in focus.
ONGOING CONSOLIDATION
Customer needs when it comes to cost reductions, tech- nology, capacity and flexibility, not to mention the glob- alization trend, are causing the contract manufacturing sector to restructure and consolidate. Acquisitions, mergers and far-reaching partnerships are expected to reflect those developments.
FuTuRE GROWTh
A contract manufacturer's growth potential is highly dependent on the ability to offer an attractive range of services, a global supply structure and access to low- cost production. Among the factors that determine where production takes place are the scale of production, logistics, labor costs, proximity to end-customers and pro- duct maturity. The sum of these variables is crucial to a customer's competitiveness and lowers the total cost per manufactured unit.
The contract manufacturing market is projected to expand further. The European market was valued at ap- proximately EUR 26 billion in 2006. The market is expected to grow fairly steadily to approximately EUR 34 billion in 2011 (Source: Reed Electronics Research).
Most of the growth and investments are expected in Central and Eastern Europe. Meanwhile, contract manu- facturers want to continue producing in Western Europe for reasons such as proximity to end-customers and tech- nical expertise.
As the contract manufacturing sector expands, PartnerTech has carved out a strong position based on its broad service offering and strong industrial structure, as well as its established electronics, mechanics and mechatronics expertise.
GARy CROCKWEll, OPERATOR
proDuCtIon
FreeDoM,
FlexIBIlIty
eFFICIent
We free up time,
resources and capital for our customers.
& More
Customer
Prototyping
Customer Center close to customer
NPI
Customer Center close to customer
Manufacturing
Location best suitable
Volume Manufacturing
Poland/China
Distribution
Location best suitable
Customer Center Development
Customer Center close to customer
how we Create wInners
In our role as a contract manufacturer, we free up a cus- tomer's time, resources and capital so that it can focus on the development and marketing of its products. That way it can gain market share and strengthen its com- petitiveness.
PartnerTech is a strong contract manufacturer for both big and small companies, primarily in the busi- ness-to-business segment. Many of them want to avoid using their own resources to create global structures for production, distribution and other functions. PartnerTech offers both production and logistics services, while as- suming responsibility for quality, cost-effectiveness and reliable delivery.
BuSINESS CONCEPT AND STRATEGy
PartnerTech is a leading European contract manufacturer of advanced products in the business-to-business segment. The company has electronics, mechanics and mechatronics expertise to manufacture products in a
the United States, as well as supplementary operations in Asia. We also maintain a broad-based partner network of experts and producers, further sealing our promise to provide flexibility and stability regardless of whether customers are growing in existing or new markets.
PROxIMITy TO CuSTOMERS
PartnerTech's customers are development-intensive busi- nesses that want to collaborate closely in terms of tech- nology and the market. PartnerTech offers a local pre- sence by means of customer centers that work with one or more of our production units. Sweden has three cus- tomer centers, which have expertise in systems integration, electronics and machining respectively. As a result, they have now become centers of excellence.
Each customer center is responsible for its geographic market. In other words, a customer chooses the center that is best able to ensure close technical collaboration.
Every product is manufactured at the plant that is most
RESPONSIBIlITy ThROuGhOuT ThE PRODuCT lIFE CyClE
Businesses have varying needs for business-to-business contract manufacturing services. A product is commonly tested and manufactured locally to start out with and transferred to a low-cost country once volumes increase.
A return to local production may occur at the end of the product life cycle.
Regardless of where a product is manufactured, PartnerTech's local customer center retains the respon- sibility for it. While gaining access to a global supply chain and cost-optimized production, the customer has a single point of contact. That enables the business to devote its resources to its sales and core operations. Following are some typical product life cycles.
STANDARD PRODUCT LIFE CYCLE
In the case of the standard life cycle, initial production is commonly close to the development function of the cus- tomer or PartnerTech's customer center. Once the product transitions to a more mature phase, one or more plants are chosen that best support large-scale production.
HIGH-VOLUME PRODUCTS
Many high-volume products are suitable candidates for extended life cycles. After the first phase during which they are manufactured in Western Europe close to the development function of the customer or PartnerTech's customer center, phases two and three might take them to a low-cost Asian or Eastern European country.
PRODUCTS THAT ARE FIRST LAUNCHED IN EUROPE AND LATER IN ANOTHER MARKET The approach for this category is similar to that for high- volume products. In this case, PartnerTech accompanies the customer in its quest for new markets.
PRODUCTS WITH EXTENDED LIFE CYCLES
Once a product has been on the market for a while, costs can often be lowered and functionality improved by opti- mizing the original strategy. Production is usually close to the customer's development function or PartnerTech's customer center.
Time Volume
Standard product life cycle Production near development/
customer center
Large-scale production
Production near development/
customer center
Time Volume
Extended product life cycle – high volume Production near
development/
customer center Low-cost production step 1
Production near development/
customer center Low-cost
production step 2
Production near development/
customer center
Time Volume
VA/VE activities at customer center
Extended product life cycle with added services Volume
Product life cycle – rollout on new markets Production near
development/
customer center Local production market 1
Local production market 2
Production near development/
customer center
Time
three BusIness seGMents
PartnerTech has three business segments in order to satisfy customer needs and create additional synergies.
TERMINALS/MACHINE SOLUTIONS
This segment consists of customers who outsource at a high level, often production of complete systems and modules. The segment is the strongest driver of Partner- Tech's broad service offering because an integrated as- signment often includes each step from development and production to logistics and after-sales. The large volume fluctuations that the segment sometimes experiences are due to the particularly large impact of each individual customer.
MEDICAL EqUIPMENT
This segment covers medical devices and instruments.
PartnerTech has a larger percentage of medical device customers than most of its competitors. The trend is toward a greater percentage of agreements for the manufacture of complete products and modules. PartnerTech's busi- ness concept of offering local proximity is a good fit with the desire of customers for close technical collab- oration when developing and adapting products.
Similarly, our production units in Poland and China meet the need for large-scale production in the latter stages of the product life cycle. Most of our units are certi- fied according to the ISO 13485 medical device standard, and our processes are adapted to satisfy the require- ments for production of medical devices. Given that collab- oration often begins at the development stage, the busi- ness segment is characterized by long-term relationships.
INDUSTRY/TELECOM
This business segment is involved primarily in the con- tract manufacture of components and modules, but many customers also outsource additional services. For instance, we manage production of advanced, encapsulated elec- tronics (box build assembly) for a number of IT customers.
Because quite a few customers operate internationally and are looking for large-scale production, the business seg- ments leads expansion of PartnerTech's global structure.
The customer base, which once came primarily from the telecom industry, has changed in recent years. Most
Some products of the Terminals/Machine Solutions business segment:
Deposit return and reverse vending machines, cash handling systems, card readers for payment systems, gaming terminals, information and service terminals, packaging machines, printers for terminals and vending machines, paper handling equipment and advanced flexible mechanics.
23%
(35)
Some products of the Medical Equipment business segment:
Blood analysis equipment, modules for radiology and anesthesiology equipment, a mechanical heart compres- sion system, dialysis equipment, allergy testing equip- ment, DNA analysis equipment, prostate treatment equipment and printed circuit boards for various medical instruments.
18% (16)
Some products of the Industry/Telecom business segment:
Operator terminals, power and range control units, broad- band routers, microwave links, mobile satellite communi-
59% (49)
GROWTh AND TARGETS
With a strong base in Scandinavia and the UK, PartnerTech is among the biggest European contract manufacturers.
Most of our customer base is in the European market.
To ensure ongoing growth and greater profitability, an industrial structure is needed that provides customers with proximity to services and technology, along with an advantageous purchasing and cost structure throughout the product life cycle.
PartnerTech satisfies the needs of the market by offer- ing local customer centers and the option of large-scale production in Poland or China. We also have a highly devel- oped purchasing structure, which was improved and strengthened in 2007.
PartnerTech's business concept is adaptable to the prevailing state of the market. The structure enables growth by adding new markets and setting the stage for further internationalization when the time is right.
PartnerTech believes that its customer base will con-
tinue to be dominated by medium-sized, development- intensive companies in the business-to-business segment.
Rapid time-to-market, cost-effectiveness, flexibility and services such as development and distribution are crucial for such customers.
FINANCIAL TARGETS
Financial strength is integral to success. As a contract manufacturer, PartnerTech operates in a sector that is subject to change, invests regularly in machinery and human resources, and encounters volume fluctuations and unforeseen developments that must be dealt with.
In view of those factors and its future growth potential, PartnerTech has set a number of financial targets. We aim for return on operating capital of 30%, annual re- venue increases of 15-20%, an operating margin of 7–8% and an equity/assets ratio of at least 30%. We are sticking to these long-term targets despite a slow year in 2007.
SOFIE RuDIN, ElECTRONICS ASSEMBlER
total Costs
& lower
CoMpetItIveness
So our customers can focus on their core operations.
FreeDoM,
how we Cooperate wIth our CustoMers
Companies are increasingly discovering that contract manufacturing means a lot more than large-scale pro- duction in low-cost countries. Outsourcing production to PartnerTech brings benefits such as lower costs, greater flexibility and shorter time-to-market. The figure above illustrates our production know-how, which has few equals. Our skills range from mechanics to electronics and mechatronics. Depending on the preferences of the particular customer, we offer a number of services – from product development to after-sales – in addition to production.
To pave the way for effective cooperation, we set up a team of PartnerTech specialists before each project begins.
The purpose is to make the product more competitive and ensure agreed-upon performance. The team is in charge of day-to-day production at one or more selected plants, as well as strengthening the customer's busi- ness by identifying economies of scale, production opti- mization possibilities, global distribution solutions, etc.
lARGE COST SAVINGS
Many customers initially ask PartnerTech to review their product in quest of cost reductions. That’s when we turn to our integrated Value Analysis/Value Engineer- ing (VA/VE) concept. We analyze the product to deter- mine whether and how it can be re-engineered in terms of design, materials and choice of suppliers. PartnerTech actively employs VA/VE to lower costs for both new and existing products. When VA/VE is fully implemented, we often generate cost savings of 20–50% (sometimes more) per manufactured unit. Our unwavering commit- ment to our customers allows us to become highly familiar with their processes and assume greater responsibility.
PRODuCT DEVElOPMENT
Having technical expertise at close range is vital for many customers. PartnerTech's local presence meets that need.
We take part in the product development of many cus- tomers when it comes to electronics, mechanics and
Supply Chain Management
Component Printed
Circuit Board
Box-Build
Cables Enclosures
Assembly Sub System
Integration Logistics
Services After Sales
PartnerTechs offering to its customers
Development Services
Printed Circuit
Board Assembly
Supply Chain Management
Component Printed
Circuit Board
Box-Build
Cables Enclosures
Assembly Sub System
Integration Logistics
Services After Sales
PartnerTechs offering to its customers
Development Services
Printed Circuit Board Assembly
mechatronics alike. Because 70% of a product's total cost is determined at the development stage, many customers engage us at that point when new products are involved.
Others ask us to improve their existing products and prototypes, as well as to design test systems.
While our development engineers are focusing on pro- duction requirements, the customer's development func- tion can devote more of its time and resources to putting together the kinds of applications that the market is looking for. Development and manufacturing are two sides of the same coin. When they are integrated, cost effectiveness automatically improves, the process speeds up and total cost normally decreases.
PuRChASING
To ensure quality and cost-effectiveness at an early stage, the participation of our purchasing function from the very beginning is one of our strong suits. We are proactive in our choice of suppliers, making sure that we find the right
one for every purpose. The customer can confidently turn the entire responsibility for purchasing over to us. We have a global network of suppliers that meet stringent requirements for quality and reliable delivery. For pur- chasing in Asia, we have a separate unit in China and ad- vanced cooperation with our Chinese partner 3CEMS.
Based on the demands of the customer's project, we make sure that our supplier agreements will enable us to meet our commitments. As in all of our collaboration, we like to establish a dialog with the customer's purchasing division in order to share experience and make sure that everything starts off on the right foot.
PRODuCTION
PartnerTech's structure of customer centers in various geographic markets ensures not only technology and development sharing, but production optimization. Pro- ducts can be manufactured close to the development and technical division of the customer, in a country with
lower labor costs, or a combination of the two. Because we manufacture for selected segments of the market, we are fully acquainted with their requirements and speci- fications. Our production know-how extends across a number of disciplines, including complex printed circuit boards, encapsulated electronics, cabling, sheet metal working of casings, subassembly and systems integration.
Before starting up production, we sit down with the customer to review the product and its various functions.
If we get involved at an early stage, we can set quality targets while ensuring flexibility and short lead-times during the development effort.
lOGISTICS AND AFTER-SAlES
Many customers outsource logistics and after-sales re- sponsibility to PartnerTech as well. The desire to shorten time-to-market and minimize their sales organization con- tribute heavily to that decision. Among our services are warehousing near the end-customer, maintenance, repair and distribution, including customized logistics services.
PartnerTech’s logistics services promote flexibility.
They can be combined to meet the customer's require- ments, enabling discretionary levels of service and more efficient distribution.
PARTNERTECh ACADEMy
The purpose of PartnerTech Academy is to take advan- tage of continual skills development to generate customer value. The trainings are for our customers and suppliers as well as our employees. The exclusive use of our own professional trainers, all of whom have great practical ex- perience of the tools they teach about, keeps each training close to the real world. That is vital if they are to transmit the profound understanding required for good results. The trainings are often conducted at one of our plants and look at real-to-life projects. Six Sigma, a world- leading quality improvement tool, is one of our most popular trainings. Another one is Supplier quality Assurance Plan (SqAP). In addition to career development, partici- pants draw inspiration for new ideas and solutions.
? ÅTVIDABERG hENRIETTE lIE,
WAREhOuSING TEAM lEADER
JOhN ANDERSON, PRODuCTION ENGINEER TIM SPENCER, TESTING ENGINEER
DevelopMent
& new
Markets proDuCt
Contract manufacturing.
Another word for freedom.
FreeDoM,
FoCus on qualIty awareness
Delivering high quality is a basic tenet for every contract manufacturer. That's why PartnerTech's management system is based on Total quality Management (TqM), which includes putting the customer at center stage, ongoing improvements, a process orientation and fact based decision making.
The group-wide management system meets the ISO 9001, ISO 14001 and ISO 13485 standards. The management system also supports customer-specific re- quirements such as quality System Regulation (qSR) and quality Assurance Test (qAT).
qSR comprise FDA's regulations for medical devices to be sold in the United States.
qAT applies to the telecom industry and is required
GROuP-WIDE TOOlS
PartnerTech uses group-wide quality tools as part of TqM.
The goal is for employees to identify constant improve- ments, be proactive and customer focused, and detect potential problems and shortcomings before they affect performance and quality. The tools, which are incorpor- ated into the day-to-day tasks of each unit, stimulate employee commitment. The concept also guides our cus- tomer teams in formulating objectives and activities in partnership with the customer. The monitoring tools are broken down into three main categories.
EDIN SuBASIC, MAChINE OPERATOR
CONSTANT IMPROVEMENTS
The focus is on skills development, willingness to change and efficient operations. All waste is minimized and re- sources are used wisely.
JOINT MONITORING
Each unit, including those in the plants, is to have a Team Room in which predetermined key ratios are regu- larly monitored. That's where employees can monitor quality and performance on a joint, continual basis.
5S
5S stands for Sort, Systematize, Standardize, Straighten up and Secure.
Although these quality tools may seem obvious, they are important when independent parties evaluate our organization in relation to the ISO 9001, ISO 14001 and ISO 13485 standards. Det Norske Veritas performs reviews throughout the year to verify that we meet the standards and identify that which bears improvement.
QuAlITy ASSuRANCE METhOD
We use the widely recognized Supplier quality Assur- ance Plan (SqAP) to meet customer-specific require- ments and assure the quality of our products and projects, even in relation to our suppliers. PartnerTech Academy conducts regular SqAP training to assure and optimize quality and cost-effectiveness throughout the value chain.
Our goal is to also involve customers and suppliers as much as possible in order to assure quality, efficiency and low costs for everyone concerned.
SIx SIGMA
Six Sigma is a world-leading, clearly structured quality im- provement tool. The Six Sigma trainings that PartnerTech Academy has conducted with customers and suppliers have been beneficial for all participants. The projects can focus on lowering costs, minimizing capital tied up, improving quality, promoting efficiency and/or ensuring more reliable delivery.
The training is based on the five phases of definition,
measurement, analysis, improvement and management.
Six Sigma consists of several levels. Yellow Belt, the basic level, includes a knowledge test in addition to a practical improvement project. The fact that PartnerTech's organ- ization has many Yellow Belts, Green Belts and Black Belts is good for product quality, efficiency, delivery times and costs.
SySTEMATIC ENVIRONMENTAl EFFORT
PartnerTech pursues an environmental effort on a number of levels in order to maximize resource utilization and minimize our environmental impact. Because we do not own any products but manufacture exclusively on contract, we also take the environmental requirements of our customers into consideration. questions about the use of materials, recyclability and energy consumption are generally important to answer in order to limit the environmental impact of the products. When it comes to recycling and phasing out hazardous substances, such as lead, we follow the RoHS Directive of the European Union. PartnerTech played an active role in the transition to lead-free production, including technology and the information it sent out to customers concerning the best way to adapt their products.
PartnerTech conducts activities that require permits.
The permits are for discharges into the water and air, as well as consumption of cutting fluids. For instance, we purify and recycle waste water, sort refuse and make sure that it is recycled or incinerated, employ biofuels for heating, and use powder lacquer instead of solvent-based lacquer.
PartnerTech's 2007 environmental targets focused on the discharges into the air, product design, waste management, consumption of electricity and scarce resources (metals, water and oil), and transport solutions of our suppliers. Target fulfillment was satisfactory in all areas.
PartnerTech has a group-wide ISO 14001 certificate.
As a result, our various units pursue a uniform environ- mental effort. Det Norske Veritas performs reviews throughout the year to verify that we meet the standards and to identify that which could bear improvement.
principles. The principles promote personal commitment and describe the ways that we create customer value. The principles are based on a number of simple statements that serve as reminders for us when we do our jobs:
ó ”Success breeds success” – by promoting the success of our customers, we succeed as well.
ó ”You can count on us” – we keep our promises and always deliver high quality.
ó ”We are one team” – we have clear roles and help each other out in achieving common objectives.
ó ”Straight to the point” – we communicate openly and modestly, showing respect and appreciation for each other.
ó ”I'll do it” – we act in a way that is good for the company.
ó ”We are cost-wise” – common sense dictates that we question unnecessary costs and look for more creative solutions.
ThE PARTNERTECh BRAND
The strength of the PartnerTech brand stems from our longstanding customer relationships, ability to generate profitability and growth, and a Stockholm Stock Exchange listing that goes back to 1997. In line with our core principles, we have established a simple, clear basis for our brand in order to support our business transactions, create value and achieve our objectives. The PartnerTech brand is to be associated with our core principles LINKS to success, which permeate our organization and corporate PartnerTech needs skilled employees who are at the
leading-edge in their areas of expertise in order to ensure the breadth and depth required to manage the unique product of each customer. We accomplish that by striking the proper balance between experience, expertise, training and age breakdown. We also concentrate on skills development and maintain close relationships with universities and colleges in the places that we operate in order to facilitate the hiring process. PartnerTech Academy provides all employees with the opportunity to learn group-wide tools and obtain the ongoing support of our own professional trainers. Our customer teams and customers constantly share information for the purpose of improving our services.
ExPERTISE AND RESOuRCE CENTER
To promote the sharing of information in-house, we estab- lished an expertise and resource center that serves as a resource pool for our various units. Group employees with special expertise in areas such as problem solving and insufficient capacity can be engaged through the center.
Employees can work in several countries and experience new cultures. PartnerTech provides language training for the employees who participate.
OuR PRINCIPlES
A company like PartnerTech that operates in different countries needs common principles to strengthen the sense of belonging and ensure uniform behavior. That's
eMployees anD prInCIples poInt the way aheaD
MONICA JOhNANDER, MEChANICAl DESIGN ENGINEER
öRJAN GRIP, MEChANICAl DESIGN ENGINEER ÅKE WAlléN,
MEChANICAl DESIGN ENGINEER MIChAEl JOhANSSON, MEChANICAl DESIGN ENGINEER
EMPLOYEES STRENGTHEN OUR BRAND
We work on a long-term, group-wide basis to ensure that all employees feel a sense of belonging and pride in the company and its future. Our skills, attitudes and treatment of customers strengthen our brand, generate credibility for the company and make us an attractive employer.
PartnerTech's employees must all be representatives of our principles.
EThICS
Based on its fundamental convictions, PartnerTech con- ducts itself responsibly and reliably. By forging and main- taining relationships with employees, business partners, public agencies and other stakeholders, we contribute to the stable development of society. We treat our employees the same regardless of the country in which they work. It goes without saying that we abide by the agreements that we have entered into with our customers and maintain confidentiality. PartnerTech began work in 2007 on a Code of Conduct, a document based entirely on our principles and slated for inclusion in our group- wide management system. The document is scheduled for completion in 2008.
SAFE AND hEAlThy WORKPlACE
PartnerTech places a high priority on ensuring a physically, mentally and socially safe and healthy workplace. The effort is governed by our human resources policy and rules for systematic improvement of the work environment.
Among the objectives are suitable premises, wellness allowances and the ability of employees to affect their workstations so that their tasks are ergonomically sound.
Our systematic work environment effort provides a way for us to explore, plan and carry out ongoing changes aimed at preventing ill-health and accidents on the job and creating a safe and healthy workplace. We monitor the effort on a regular basis. The company also places great importance on psychosocial health. For instance, PartnerTech conducts annual employee surveys to find out how the total work environment is perceived, as well as where changes and improvements are needed.
BREAKDOWN By GENDER
Women 28%
(29%)
Men 72%
(71%)
AVERAGE PERIOD OF EMPlOyMENT
1–5 years 29%
(28%)
Longer than 5 years 58%
(61%) Shorter than 1 year 13%
(11%)
EDuCATIONAl lEVEl
Post-secondary 19%
(17%)
3-year upper secondary and lower 65%
(68%) Higher education
120 credits and more 16%
(15%)
BREAKDOWN
EMPlOyED uNDER A COllECTIVE AGREEMENT/OFFICE WORKERS
Office workers 32%
(31%) Employed under
a collective agreement 68%
(69%)
TOTAl GROuP EMPlOyEES
Non-Swedish units 57%
(56%) Swedish units 43%
(44%)
Key ratios 2005 2006 2007
Average no. of full-time employees 1,369 1,747 1,886 Sales per employee, SEK thousand 1,471 1,750 1,402
Average age 41 41 41
EMPlOyEE KEy RATIOS
