How to qualify your contract electronics manufacturer

By Mark Zetter

Inside an EMS providerSo, your company decided to outsource. (Also, see: “When outsourcing is not the answer“)

Contract manufacturers are numerous in number as there are easily a few thousand located on the face of the planet. And, while it’s not always clear whether its best to select a contract manufacturing destination in a low-cost region, it can still be overwhelming to isolate a few, qualified contract manufacturers on a short list for OEM executives to consider further. (See: Top 10 EMS / ODM company rankings)

Below are numerous qualifications / capabilities executives might want to consider when in discussions with, and developing a criteria ‘checklist’ for, evaluating electronics contract manufacturing partners. While this list is fairly adequate, it certainly is not comprehensive.

A ranking, or ‘weighted value’, can be assigned to the level of compliance, for each degree of compliance, in each sub-category, to help executives qualify the overall degree to which a contract manufacturer meets either that specific criteria or, whether or not the contract manufacturer meets the executive’s criteria considerations, overall.

As executives wade through the detail that follows, keep in mind, it’s in everyone’s best interest to prevent the contract manufacturing relationship from failing.

Quality system

A. ISO9001 and other product-specific regulations

  1. Has no plans, no accreditation
  2. Working towards approval
  3. Evaluation date confirmed and registrar identified
  4. Approved or meets the requirements of ISO9001, etc…and has been accredited for less than 3 years
  5. Approved or meets the requirements of ISO9001, etc…and has been accredited for 3 or more years

B. Product and production document control

  1. No evidence of document control
  2. Formal, controlled, documentation exists, non-conformances observed
  3. Formal, controlled documentation exists, NO non-conformances were observed

C. Quality system software tools

  1. No quality system software in use
  2. Quality system software which records defect traceability and trends in use for some areas (data available for review within 24 hours)
  3. Quality system software which contains defect traceability and trends in use for all areas (data available on-line, real-time)

D. Benchmarking improvement results

  1. No evidence of benchmarking
  2. Pro-actively participates benchmarking industry best practices
  3. Pro-actively participates benchmarking industry best practices and has records on file by production area/technology of industry best practices

E. Customer field return rate

  1. Does not measure
  2. Measures return rate and has established improvement goals
  3. Measures return rate, has established improvement goals, and improvement plans with demonstrated results

F. Failure analysis capability (root cause analysis)

  1. None
  2. Contracted out
  3. In-house facility

G. Quality management

  1. No reviews with management occur
  2. Irregular reviews of quality metrics (includes field returns) with management occur with some coverage of cycle time and on time deliveries
  3. Regular reviews of quality metrics including field returns with management occur with coverage of metrics and actions plans for improvement of cycle time, on time delivery, and internal assessments

H. Management responsibilities

  1. No documentation exists for responsibility, authority
  2. There is an organizational chart outlining responsibilities communicated to all employees
  3. There is an organizational chart outlining responsibilities included in the company quality manual
  4. Responsibilities, authority of all departments/functions clearly defined (especially quality function)
  5. Responsibilities, authority of all departments/functions clearly defined and mapped

Business

A. Business disaster recovery plan

  1. No plan exists
  2. Plan fully developed with plans to implement
  3. Plan fully addressed and is prepared for a catastrophe in all factories where customer’s products/data are made/stored (includes offsite software back up storage)

B. Capacity planning

  1. No planning process exists
  2. Infrequent use of planning process to forecast capital expenditures (or to forecast plans to increase current capital usage), no records of corrective action exist
  3. Capacity planning occurs and is measured with process in place and is reviewed in long range planning (records, verification available)

C. Environmental control program

  1. No program exists
  2. Limited environmental program exists and is documented and at a minimum there is evidence that the supplier is compliant to local and federal regulations
  3. Documented comprehensive business strategy exists which drives the organization to adhere to all local and federal standards, with evidence that environmental impact audits are conducted and acted upon (includes recycling, waste elimination, etc.)

D. Internal information systems support

  1. No full time staff dedicated to systems
  2. Information Systems support is outsourced
  3. Full time dedicated IT staff which supports all internal systems

E. Customer providing greatest percent of contract manufacturer’s revenue is _________________ (customer)

  1. Greater than 20%
  2. Between 10% and 20%
  3. Less than 10%

F. Good housekeeping and safety

  1. No active housekeeping and safety programs exist
  2. Active housekeeping and safety programs exist including audits, schedules, documentation, and reporting to goal
  3. Aggressive housekeeping and safety goals and metrics in place and are reviewed regularly with senior management and improvement plans are documented

G. RMA (returned material authorization) cycle time

  1. RMA numbers are assigned greater than 24 hours after request from customer
  2. RMA numbers are assigned in less than 24 hours after request from customer
  3. RMA numbers are assigned upon demand (i.e., customer has pre-approved block of RMA numbers)

H. Dedicated ‘customer’ account manager

  1. None, no plans: fragmented to local sales office
  2. Some awareness of “Customer” account
  3. Director level or higher

I. Socially, Ethically Responsible Employer

  1. No documented code of conduct
  2. Documented code of conduct with evidence
  3. Documented code of conduct with evidence and active corporate citizenship program

Design technology capabilities

  1. Early supplier involvement (ESI) process
  2. ESI records are not evident
  3. Implementation of an ESI process is defined, limited experience, some records
  4. Normal business practice, a process is defined and the supplier has records demonstrating regular, successful application of ESI

A. Calibration of design lab test equipment to proper standards

  1. Equipment not in calibration
  2. A calibration procedure exists with schedule, inventory, and recall systems exists (no deficiencies identified)
  3. Calibration intervals are determined through analysis and all calibration occurs in a temperature and humidity controlled environment

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