In the growth of an organization, its in-house production capacity exceeds its capacity, so it looks for a contract manufacturer, but outsourcing is just too difficult and confusing. Because Your project could be delayed and cost overrun if you choose the wrong contractor. In this article, we describe Choose a Contract Manufacturer for a specific project. The decision to outsource a project must be based on these steps, which are important to follow every time. The project management approach we have found to be very effective.
How to choose an Electronic contract manufacturer for a product for the first time or replacing the existing electronics manufacturing services Provider Company plays a very important role. The Question is not that who does it but who does it best.
I do not believe that the selection of EMS providers should be managed by the solely sourcing team. While the cost and timely delivery is a critical factor. It will require a more complex approach to involve the design and engineering teams. We will discuss contract manufacturing process flow in the last section.
The best selection of electronics manufacturing outsourcing providers that can be contracted for the production strategies, technical support, and cost reduction can be finalized by considering a set of supplier evaluation criteria.
Guidelines: Choose a Contract Manufacturer
We can say the selection of the contact EMS provider is not taken casually because of that it will be a considerable factor that influences the cost, quality, delivery, product performance, etc. Below factors will be the key role in the service providers, and Six Things to Know Before Selecting an EMS Provider.
Step One: Research and Make a List
You will need to list all possible suppliers for the service you need. You can get and compile lists by searching the Internet, reading government publications, or requesting recommendations or You can purchase these lists from various industry directory providers. It is important while searching for a contract manufacturer that specializes in the kind of goods you need. For instance, you should consider a specialization in electronics manufacturing if you are developing electronics manufacturing Products.
Also, Does the company have experience with similar products? and What kind of reputation has the company in the Market. By conducting your own survey, you can prescreen potential before Choosing the right contract manufacturer. More important, You just need to sort the list of relevant providers based on your key capabilities and requirements, before calling anybody:
Step Two: Get on the Phone and Schedule Visits
Now, you have got the list of all potential relevant suppliers. The Next Step is to connect each contract manufacturing business that you are considering to set up a screening call. Don’t give away too much information about your project, Mostly, listen to what is being said.
Expectations related to products and manufacturing you should focus on three or four core competencies that all potential vendors should possess. In addition to the total cost, timeline, location, licensing fees, and intellectual property restrictions, another valuable product attribute is the capability to meet all of your needs in one place.
Ascertain that. your project execution includes a budget for contingencies and that your timeline is reasonable with all details. This is recommended that conversation must be professional Scope. You should schedule a follow-up visit on site if possible.
Step Three: Data Collection and Analysis
After early stages of discussions with potential manufacturers collect all the data and compile a Matrix of information. In terms of contact information, gather telephone numbers, email addresses, and initial responses to questions from each Contract Manufacturer. Now Choose a Contract Manufacturer list filters based on data.Finding the best Contract Manufacturer and building a competitive edge is possible if you follow these best practices.
Quality and Compliance: By securing certifications, they prove their commitment to quality and environmental standards. Few most common certifications an electronic contract manufacturing provider should possess are ISO 9001, ISO 14001, ROHS and ISO 13485:2003 for medical equipment etc.
Geographic Location: It is advisable to start with local best Contract Manufacturer if available in your area. Getting from one place to another becomes easier the closer they are.It is also advantageous for product transfer, Logistics & Distribution. Frequent auditing & Monitoring, shipping, and faster delivery.
Capability: This is very important. Are there certain capabilities and expertise required for your Contract Manufacturer to handle the manufacturing of your product. As a result of this summary, you will be able to determine what services the contract manufacturer has to offer now and in the future.
Equipment & Technology: In order to achieve a smooth manufacturing process, the right contract manufacturer will utilize suitable technology and equipment.Their own capabilities for proactive and fluid resource management and production management must be able to meet your product requirements.
in the competitive market where technology and product are changing very frequently. In this scenario, the selection of contract manufacturing electronics assembly must be considered to be technically strong in current as well as future product requirements and challenges.
Customer Relationship: During the contract electronic manufacturing selection process, the in-house support of the expertise of electronics service providers must be considered. 70 % of the cost of the product is determined in an early stage of the design and development process.
So, well-experienced experts from EMS providers must be the part of design and development activity for a better design for manufacturability and test to help in cost reduction. So the sound customer relationship from electronic manufacturing partners is very critical in such ways.
Inventory Management: The contract electronic manufacturing partners must be accountable for inventory proper management and control. The main cost of PBCA related to the Bill of material (BOM).it was observed that the large organization can get more advantage of cost due to bulk purchasing and negotiation power.
so it can be helpful to product cost reduction. electronic manufacturing partners must least cost of poor quality (CPQ) Scrap and rejection rate.
Step Four: Narrow Down The vendor List
Pick three to five vendors from whom your company may request proposals, and meet with your project team. You may need to contact operations, manufacturing, process development, quality control, quality assurance, purchasing, and finance departments depending on the nature of the RFP. It may also possible to clarify information by speaking on the phone or may wants to make a site visit before Choose a Contract Manufacturer.
Moreover, you can check off items on a wish list based on nice-to-have criteria. You can Come up with a numerical rating for primary services, It may be helpful to allow project managers and key production stakeholders to give their own scores, too, for the best overall team decisions. In addition, you might consider different vendors, each with their own strengths and weaknesses. You should take into after going through your checklist and overall score.
In general, the more information you have, the sooner you can replace organizations that don’t make sense with others on your list. You should repeat the process if you find only one contractor who is feasible.
Step Five: Get Proposals & Vendor Finalization
Now after shortlisted as the Contract Manufacturer the filter list is not more than 5 vendors. To Initiate the RFP process provide them RFP document. Here the notable point is that the detailed documents contain all information and descriptions required for your organization to provide enough information. Ensure that you send your RFP to all your high-performance Contract Manufacturer at the same time, each with the same deadline.
A contractor who receives an RFP will almost always contact you, and he or she will want to schedule a conference call to ask questions or obtain clarifications. Your manufacturing needs and expectations should remain clear and comprehensive. Translate those effectively throughout all interactions with screening.
As soon as you get the proposals, Be sure to read them carefully to Please rate your proposals. Assess how the proposals differ and decide how to compute the evaluation factor based on those differences. Make personal visits to the top two or three contractors. Before a contract is signed, allow a formal quality audit,
A minimum of two vendors should be considered for contract negotiations. Once you have determined that it is perfect and fits our criteria Than end further negotiations with vendors that cannot meet the criteria. Choose the criteria that will guide you in managing the partnership once you’ve made your choice.
What is meant by the terms OEM, EMS, CEM, ODM and why should you know?
What is OEM:- Understanding an Original Equipment Manufacturer (OEM) is important terminology for everyone needs to know. An original equipment manufacturer (OEM) is a company that produces parts and equipment to the buyer or another company under its own branding.
For example, if Maruti India used Hella Head Lamps, Exide batteries, Bosch fuel injectors, and Maruti’s own engine blocks and a few other parts while building a car. then car Mechanics and collectors consider the manufacturer of the original equipment OEM.
What is EMS:- Electronics manufacturing services (EMS) are those help turn your product idea by designing, testing, building, and delivering to bringing your electronic product to market.
What is ODM:- Original Design Manufacturing ODM, A company that designs and builds a product to branded by another firm’s specifications for sale. OEM and ODM models are both associated with the manufacturing industry. This model is especially used in international trade where a local ODM is used to produce goods to take advantage of such as low labor-inputs, transport, etc.
What is CEM:- Electronic Contract Manufacturer (ECM) or Contract Electronics Manufacturers is a company that makes electronic parts under contract for other companies instructed for OEMs.
What are electronic manufacturing services?
Electronics manufacturing services (EMS) are those help turn your product idea by designing, testing, building, and delivering to bringing your electronic product to market. A productive partnership is very crucial and also known as Electronics Contract Manufacturing (ECM).
Electronics manufacturing services (EMS) refers to the strategy of offering product support in the design phase, then continue to support the client in development, prototyping, tooling, and mass production. They then continue to support the client in return/repair services as well.
Conclusion – Wrapping it up
In spite of the challenge of choosing the right contract manufacturer for your product, the above steps equip you with information and guide you along the path to starting your search and finding the best contract manufacturer. Though every vendor selection method is different, Making sure you’ve covered all your bases simplifies things.
To ensure the success of your business, you need to choose the right contract manufacturing vendor. It can be a long and arduous process to choose the right contract manufacturer. You may end up having to switch contractors if you make the wrong choice, which is costly and time-consuming and creates production delays.
The Ultimate Goal, best Contract Manufacturer usually has superior quality, efficiency, productivity, and flexibility. How to Choose a Contract Manufacturer to hope you will get the answer