New Year, new Contract Electronics Manufacturer? Is it time to review?

Contract Electronics ManufacturerFunny isn’t it? You have 365 days to influence change within your business, yet come the New Year feel compelled to come up with something ‘new’ or ‘amazing’, starting on the 1st January.

Unfortunately, statistics show only 8% of those that make a New Year’s resolution actually achieve them. So, if the first thing on your ‘to-do’ list is to appoint a new Contract Electronics Manufacturer (CEM), you may want to reconsider your timings.

Let’s take a look at some of the more common reasons New Year’s resolutions fail and why many don’t even make it past the first 24 days in January. If you are serious about transitioning the build of your printed circuit board assembly (PCBA) or box build, you’ll want to avoid the same mistakes to ensure that your resolutions stand the test of time.

You felt pressurised into making one

Did you have a resolution prepared? Perhaps it was the same as last year? How did that work out for you? If not, did you have to think on your feet at the New Year’s Eve party? Unfortunately for many this is where resolutions go wrong. A spur-of-the-moment commitment which may, or may not according to the stats, work out for you.

Outsourcing the manufacturing of your PCBA or box build assembly to an Electronics Manufacturing Services (EMS) partner is a strategic decision. It takes time. If you have already made the step then I’m confident you will have started to see the benefits. However, you will have also had to weigh up the potential pitfalls during your initial supplier selection process.

If you are considering the transition of your product build to another EMS provider then you will need to work through parts of the process again. Of course, you will have gained valuable insight from your first experience; however, moving from one provider to another introduces a different set of dynamics and challenges which you may want some support or guidance on.

So, whilst you may see attractive discounted labour rates, reduced non-recurring engineering (NRE) charges or free delivery being offered, try to avoid short term temptations and remain committed to your long terms objectives.

You set too many unrealistic goals

Does it feel like everyone around you has set a number of ‘life changing’ goals this year? You know the ones I mean: shedding excess body weight whilst giving up that nasty habit they’ve had for 30 years - all in time for their first marathon. Don’t get me wrong you need goals and targets to work towards - however, they must be specific, measurable, achievable, realistic and timely (SMART), or else you stand to fail and become another statistic.

If your existing contract manufacturer is failing to meet your expectations, you have a couple of decisions to make. The most logical would be to work with them, putting in place a series of performance metrics to monitor over a period of time. If you haven’t been holding regular business review meetings then now is a great time to start, so you can discuss progress face-to-face.

If, following this process, you are still not satisfied with the levels of service they are offering, then you may have to consider a change in manufacturing partner.

The driving force behind Original Equipment Manufacturers (OEMs) looking to outsource to an EMS provider is generally so they can:

  • Overcome capacity constraints (factory floor space, skills, technology, equipment)
  • Reduce overheads (people, plant)
  • Free up cash locked in WIP due to operational/manufacturing inefficiencies
  • Focus on core activities (design, sales, marketing, customer services)

With these in mind, it’s imperative that you remain clear on both your long term vision and also, the criteria required from future partners, when evaluating alternative contract electronics manufacturers. Be realistic with the goals that you set, by focusing on one or two core objectives to help you get back on track and yield the best results for your organisation. After you have achieved a steady state of supply, you can then work with your new supply partner on setting additional SMART objectives over an agreed period of time.

You made one because you were told to

With the ‘success’ rate for those making resolutions being only in single digits, it stands to reason that making one based on someone else’s opinion is going to be even more difficult to achieve. You’re going to need to take ownership of any changes that you want to make and then hold yourself accountable for the results.

Whilst there could be views from both internal and external parties on which manufacturing solution or partner will work best for you, I’d recommend conducting your own research into the EMS companies available to you. Start with some desk-based research and use the Internet to find contract manufacturers that meet your required criteria – these may include location, services, quality accreditations, markets served and expertise.

Some of your criteria maybe a little subjective, that’s fine: ‘gut feel’ can play an important part when selecting a credible CEM provider. For example, can you see yourself working with the company? Are the messages being sent out in line with both yours and your company's ethos? Can you visualise your PCBA or box build assembly being manufactured inside their factory?

By asking yourself these questions, your original list is likely to shrink down to say 3 or 4 companies that meet - on the surface at least - your expectations. There are a number of steps to take, but really the next ones would be to follow up on these candidate firms with site visits and process audits, to ensure that any request for quotations (RFQs) you send through will deliver back the results you need.

So, there you have it. Three reasons why the majority of the population feel a little deflated when it comes to March. By sidestepping some of these pitfalls you can avoid becoming another statistic; and, either turn around the performance of your existing CEM provider or have the information you require to successfully transition the build of your products to another.

Good luck and remember that you don’t have to wait until January next year to achieve something amazing!

Image by: Bekah

Written by Neil Sharp

Neil has over 25 years’ experience in Electronics Manufacturing Services and Component Distribution. During his career, Neil has held a range of leadership positions in sales, marketing, and customer service. Neil is currently part of the ESCATEC Senior Management Team and is responsible for setting and delivering the overall Group Marketing strategy. Neil heads up the marketing department and is responsible for both the strategy and the implementation of innovative marketing campaigns designed to deliver high quality content to those seeking outsourcing solutions.