Fifty years ago, all the components of electronic products were manufactured by the same company that produced the final product. This meant that manufacturers had to buy raw materials, hire professionals, carry supplies for each part that goes into the product. In addition, this made it very difficult for small businesses with small runs to enter the market and compete.
The market was ready to ‘electronic manufacturers contract “which specializes in the design and manufacture of certain things that would then be sold to OEM to be placed in the finished product. Reduce emphasis on business in just one product or component, allowing them to offer economies of scale in the purchase of raw materials, skills and knowledge in the design of process equipment production. This saves the original manufacturer and free up their capital.
With this new structure, production companies were able to produce better products, more efficient and easily scale up or down to customer demand. In the design development process, usually the most complex and difficult part of the process, the contract manufacturer is likely to gather a team of experienced engineers will focus its expertise in the specific component. In the production process, they are more likely to keep up with the latest, high-tech and state-of-the-art technology.
Suppose there is a problem with one of the components. If the manufacturer is producing all the things in the house, it can take a while before it can find – and maybe even after it has gone to the end-user. In addition, the problem has to be solved by using in-house resources and capital. When working with a contract manufacturer, in many cases, part failures already caught long before they reach the OEM – often because of the experience of other manufacturers. Often, third party view of the problem what is needed, and the resolution is only on the shoulders of a third party.
Since ECM only buy materials for the things they produce, they are able to buy in bulk OEM offer significant cost savings. And they are buying from a single supplier of a higher frequency, the manufacturer takes advantage of the strong relationships developed.
Finally, the agreement the company shares that they provide quality thoroughly tested. They will be at the forefront of technology make improvements and upgrade their product so that it works better, lasts longer, and is more efficient. This is a daunting task for the original manufacturer has hundreds of items to keep up with.
Electronic contract manufacturer is an expert in the issues that they develop and provide. This expertise offers special value.
Considerations when choosing Electronic contract manufacturing partner
For many companies, especially small and mid-sized companies, who have a contract manufacturing partner is not just a good idea, it is important to business success. In addition, the pricing structure and quality, there are several other things that should be considered in assessing the potential partners:
How much and why they want your business – Choose a partner with compatible objectives.
Some companies may only be interested in the amount at stake. While it is important that the numbers match up to the benefit of both parties, to find out what the main driving force is. The larger the company, the contract may be interested in smaller manufacturing companies if they offer the opportunity to gain experience in an industry that is new to them. Or products that have large growth forecasts.
Learning the answers to these questions is important before going to the length of the process to submit an RFP, and more critically, beat cooperation.
If the business principles do not match up, the OEM may not get the attention they need to make their products well.
What will the ECM be looking for in a partner – Provide accurate forecasts
No one knows where the original manufacturer are planning to go unless they see a well developed forecast. If they want to make the most of this cooperation, they must notify the manufacturer of where they have been and where they will go in the future. This gives the needed credibility.
The contract manufacturers need to know what level of risk they are to register for, and determine the level of resources needed to meet the requirements. They will be able to buy stuff when necessary, they will be able to handle the file?
What are the expectations of audit
Determine up front what policies and responsible for inventory between the two companies minimize the possibility of conflict and surprise. Understanding inventory issues and supply chain management, and actively making efforts to reduce exposure, is important when predictions do not match up for sale, or crisis occurs.
How will ECM handle product changes
With electronics changing at lightning speed, changes are bound to occur fairly regularly. Find out the wishes of handling product changes, and the process they have taken in their implementation in the past with other customers is very important.
Define the level of participation expected of each member of the proposed change, analysis and implementation is crucial for the success of the partnership and the product itself.
Partnering with a company that has a lot of experience in many levels of product lifecycle will provide valuable input in various phases. Therefore, this experience and data process should be discussed.
There are many aspects of the electronic production that must be considered when deciding on a production partner. These are some of the less obvious but very important issues to ensure not forgotten.
