5 Considerations When Choosing an Electronics Contract Manufacturer

5 Considerations When Choosing an Electronics Contract Manufacturer

Finding an electronics contract manufacturer (CM) that you can trust to accurately and competitively manufacture your electronic device is no small feat. The amount of electronic CM shops in the marketplace these days is staggering and being able to identify and select a quality CM is imperative to success. To do this effectively there are a few key areas that require careful attention to ensure a successful product launch and long-term production success. Below are five key considerations to keep in mind when choosing an electronics contract manufacturer.

5 Considerations When Choosing an Electronics Contract Manufacturer

1.  Quality

Production quality is perhaps the most critical aspect when it comes to selecting an electronics CM. This is because a CM without a robust quality practice indicates its inattention to detail that typically results in defects, and its inattention to your overall product. To ensure that a CM has a strong quality program, verify that it, at a minimum, leverages critical quality tools such as quality continuous KPI tracking and management (SMT yield rate, CpKs, etc.), line-side visual management systems, Total Quality Management (TQM) practices, quality certifications (ISO 9001, RoHs, UL, etc.), and a thorough document management system.

2.  Industries Served

Electronics are in practically every industry today, and each industry has unique requirements. Thus, it’s necessary to identify and select a CM that has experience in the specific industry of your product. This won’t just reduce your product’s risk exposure, but it’ll also give your firm the opportunity to benefit from the CM’s industry expertise to identify product or quality gaps that were overlooked.

Additionally, different industries may require significantly different manufacturing capabilities. For instance, a CM that deals primarily with small electronics will be capable of producing very compact PCBs (printed circuit boards); whereas a CM that doesn’t will likely encounter issues in production with very small devices. Therefore, you need to choose a CM that has the experience and the capabilities required by your product.

3.  Manufacturing Cost

Manufacturing cost is another significant factor in selecting an electronics CM. While the items discussed in this blog are crucial to selecting a capable CM, they’re irrelevant if the economics don’t work out. On the flipside, lowest cost doesn’t always mean best cost, as pricing needs to be evaluated while considering the other selection criteria. Furthermore, outside of the quoted costs, it’s important to understand the CM’s cost reduction and cost sharing plan. Having a CM that focuses on, and shares, the benefits achieved through cost savings is critical to incentivize continuous reductions that support building a long-term partnership.

4.  Bill of Materials Component Risk Management

Another important element a quality CM manages on your behalf is the risk exposure of your bill of materials (BOM). This is critical because a single component – that either stocks out or reaches the end of its commercial life – can delay production for months until a redesign is completed or a new component inventory is obtained. Having a CM constantly monitoring your BOM components’ market statuses and lead times may preemptively identify component disruption issues before they could cause major delays, which would lead to increased cost and lost revenue.

5.  Responsiveness

Finally, it’s important to identify a CM that’ll be responsive to your needs throughout the partnership.  CMs come in all different sizes so it’s important to identify one that’s flexible enough to support your technical needs and that’s sized appropriately so it’ll provide your organization with the proper level of attention and reliability needed to produce and maintain a successful partnership.

CMs need to be able, and want, to react quickly to design and production changes. From your perspective, it’s important to understand what the CM’s capability limitations are prior to executing a production agreement so you don’t have unrealistic expectations. Ensuring responsiveness expectation alignment on both sides early on in the relationship will contribute significantly to future mutual success.

Conclusion

While there are many factors that contribute to selecting a capable and responsive electronics contract manufacturer, these five decision criteria are indispensable when choosing the appropriate CM for your next program or project, and will facilitate the most informed choice that’ll generate long-term success for you and your CM partner.

-Chris