Contract Manufacturing – what are your benefits?

09.01.2020Przemysław Prolejko

Let us begin with clarifying what contract manufacturing means. Contract manufacturers who specialise in electronics manufacturing provide services beyond assembly. Their activities cover a wide range of engineering support at various stages of product life-cycle, from the product design stage to after-sales activities. Among other advantages of contract manufacturing we would like to highlight production cost reduction and elimination of production facilities or part thereof on customers’ premises.

For manufacturing of highly-complex electronics a dedicated production line and technological facilities are indispensable. Contract Manufacturing enables delegation of matters related to product assembly and necessary quality control.

The most important elements of contract manufacturing
In contract electronics manufacturing special attention is devoted to a few areas. Before we take a closer look at the benefits that can be derived from commissioning production to a contractor, let us consider those elements that indicate the quality of cooperation between an EMS provider and a customer.

Supply chain management
A supply chain management strategy is tailored to every customer and their business objectives. Key factors in this process constitute a detailed analysis of the market of materials which the product consists of as well as identification of potential threats within the supply chain, with an aim to design an optimal supply chain strategy that ensures cost minimisation, reduction of material risk and continuity of supply. Establishing a supply chain management strategy together with a capable EMS provider at the beginning of cooperation will yield rewards in the future.   

Quality standards and norms
All electronics contract manufacturers are nowadays obliged to comply with strictly defined quality standards. Therefore, it is worth taking a closer look at quality management systems such as ISO that a contractor has been awarded.

IPC standards Class 2 and Class 3 are also worth mentioning as they are fundamental standards for the electronics manufacturing industry. Some EMS providers hold ISO standards related with specific industries such as medical or automotive.

Contract Electronics Manufacturing Services – benefits
How can you benefit from using the services of an EMS provider? We would like to highlight the benefits that are of highest importance from customer’s perspective.

No need for investment in a manufacturing equipment, production lines and production hall.
Smaller businesses may not be able to afford a sophisticated and comprehensive production area. In fact, such can apply to players regardless of their size. Contract electronics manufacturing responds to these economic difficulties. It can be profitable even if quantities are not vast or demand for production is irregular. Instead of investing in a production line, one should commission the process to an EMS provider who will support you in design, manufacturing and apply relevant quality measures. The comissioning of production to an external player enables you to focus on the main areas of running the business such as R&D, sales and marketing.

No need for establishing new (often more restrictive) standards.
In the area of electronics manufacturing EMS providers are obliged to comply with incredibly restrictive quality standards. This is particularly important in the field of manufacturing products for highly complex devices used in such industries as medical, rail and mining. With the use of services provided by an experienced contractor, one avoids the necessity of implementing and maintaining required standards.

No need for ”freezing” funds in material.
In the electronics manufacturing industry it is necessary to formulate and pursue an individual purchasing policy for every component. Ensuring continuity of supply as well as securing material for production are vital. However, securing larger quantities of materials is connected with the risk of freezing funds in the material which may not be used in production immediately. Contract manufacturing provides an opportunity to have the procurement of the materials and therefore the financing done by an EMS provider.

No need for employing a team of specialists.
Contract manufacturing eliminates the necessity for employing a team of experts in the field as a professional EMS partner has at its disposal competent staff – a team of engineers and highly qualified specialists. Experience and in-depth knowledge of realities and dependancies in the EMS field are of high value towards ensuring that your product get professional support from every angle, at every stage before during and after production.

Support at the the design stage.
The support guaranteed by an EMS provider at a design stage facilitates the most effective and efficient accomplishment of business obcjectives. Design for Manufacturing means searching for the most profitable solutions for a production process in order to assemble a product quicker and therefore with lower cost, yet wihout impairing quality. Design for Test is an approach focused on creating opportunities for testing of a product in terms of its reliability, compliance with standards and profitability of its production.

Exploiting of new technologies.
When deciding upon a contract electronics manufacturing provider, you may want to look at  contractors who exploit latest technologies and own modern production facilities.

Taking these aspects into consideration in the selection proces of an EMS provider, you can ensure that the business (and your products) will be competitive on the market. Your future EMS contractor should provide you with the information concerning equipment and tools that it has at his disposal. As electronics market is dynamic and driven by fast innovations, it is crucial to verify if the chosen contractor is up-to-date with the newest technologies.

To sum up, companies benefit from contract manufacturing not only because they can evade investments into production equipment, but they can also benefit from technological capabilities of an external partner, who meets the required standards.



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