If only I knew then how much of my electronic hardware manufacturing to outsource

By Staff

OEM_Decision_MakingOutsourcing electronics providers can do so much more than cut costs. Many EMS providers can fulfill every aspect of any electronic OEM’s outsourcing requirements. From components and front-end design, product developmentSMT PCB assembly, box build/direct fulfillment and logistics, reverse logistics and repair and so on.

On the component side, if you have a lot of mechanicals on your product either selecting a partner with a high level of vertical integration or ensuring there is a lot of mechanical supply chain in the region where you select your EMS partner is going to be important.

Building PCB assemblies is highly commoditized today. It’s more about the low- and high-complexity differentiation, building product in EMS factories where similar products are being built, to say the least. Electronics system integration (box build) is similar in this regard.

Most likely, when it comes to answering questions about ‘what’ should we outsource functional test is central to the discussion, and the portion of testing you can control; acceptable percent of test coverage and performing to your product specifications, quality of the test yields data, corrective actions with EMS (and your internal) test engineering to get things back on track, keeping systems that fail test (bone pile) to a minimum and with quick disposition, and so on…

If you can control anything in your EMS relationship, determine to what extent the control you will have should be with test. You want to be close with it. More on testing here.

As for EMS performance with FGI warehousing and logistics, EMS providers, especially the larger providers, already provide these services. The important consideration here is to differentiate between actual fulfillment activities at the EMS warehouse and distribution center activities and freight activities.

Today, as with PCB assembly, freight activities are also commoditized. If you quote five or six EMS providers offering logistics you will find pricing is similar. It’s difficult for EMS providers to compete on service in this area.

Reverse logistics and repair is usually an after thought for many OEMs but know there are very complex, capable solutions with some EMS partners that do this very well. RL and repair is really a question about how complex is your product, what feedback do you want to get out of having RL performed? How long is your product life cycle? And, depending on how comfortable you are with outsourcing; if you can outsource it, most OEMs should do so.

There is a lot of RL capability within EMS and ODM firms and most likely depending on the size of the solutions provider you’re considering, they might also able to provide your presence in countries and markets where you don’t currently compete today.

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