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Choose an electronic contract manufacturer without relying on these myths
Making the right choice when selecting an electronic contract manufacturing company is essential for your product’s success. However, several common mistakes are commonly made when selecting the manufacturing partner. Many OEMs neglect other aspects while overemphasizing one (typically cost), in doing they have an unhappy experience with their final selected supplier.
There are several factors to consider when selecting an electronic contract manufacturing company. Considering multiple factors and weighing your choices is crucial for making an informed decision.
When looking for a contract manufacturer for your next project, don’t believe these popular myths when selecting the right partner.
Most people believe that their contract manufacturer will do all the work for them. It is important to be aware that contract manufacturing is a challenging, low-margin business.
Understanding the precise scope of the service and aligning the operations of your contract manufacturing company with the operations of the outsourcing company is to avoid misunderstandings, duplication and gaps.
The OEM that understands their precise role in the process usually has better margins, a shorter time to market, and a healthier relationship with the CM.
The idea that bigger is always better is another common misconception. It is generally assumed that a larger company will always produce better products at lower prices.
In contrast, OEM parts have a different pricing policy than is found in many other industries. Typically, OEM parts are more expensive than their contract manufacturing counterparts.
A company’s size is less important in setting the price for your particular product (and the work involved) than the type of work involved.
Choosing a contract manufacturer that’s the right size for your project and goals generally leads to a better outcome.
The cheapest quote possible does not equate to higher profit margins, just as bigger is not always better. Costs associated with the total supply chain are determined by a variety of factors, and not all of those factors are accounted for in the per unit price.
Selecting a CM should take into account the product and the entire supply chain.
It is a common misconception that companies with a large network of manufacturing facilities around the world are better suited to manufacture your product. This seems reasonable at first glance. You can improve product quality by using a global network of plants and resources.
In most cases, however, contract manufacturing companies have multiple plants each with different specialties and capabilities. Rather than leveraging multiple locations, it is better to work with one plant with the right mix of capacity and capabilities for your project.
It can be a turn-off to find out a competitor uses the same CM, particularly if you are proud of your proprietary manufacturing process.
Nonetheless, many different processes come together to produce your final product. It is possible to differentiate and add value even with the same CM.
Products development and manufacturing are separate processes. In many companies, the R&D function is bundled under manufacturing – especially when outsourcing. This approach is rarely successful and can stagnate your product development goals.
Many companies in the electronic contract manufacturing industry have excellent sales teams. However, manufacturing processes are what are important for high quality, consistent deliveries.
Find out whether the manufacturing partnership makes sense before you sign a contract, rather than being carried away by a fine pitch.
You may be tempted to choose CMs with high volume operations if you are in search of high-mix contract manufacturing. Nevertheless, high volume and high mix do not always go together.
This extra capacity can become an unnecessary expense (and prolong the production period) if your company is trying to carry out a particular project.
Certainly, time-to-market impacts margins, but it shouldn’t take precedence over other components of the overall supply chain. It doesn’t mean that your product will have good quality or that you will make more money over the long term. When evaluating an electronic contract manufacturing provider, make sure to take a more balanced approach.
In general, OEMs tend to hire CMs with in-depth knowledge and the resources to complete their projects. While it may sound appealing, don’t put too much emphasis on technical expertise. Many OEMs leave too much in the hands of CMs- without aligning their overall strategies in a manner that paves the way for a meaningful partnership.
With 18+ years of experience, Omnidex Electronics continues to strive to be a world-class Electronics Manufacturing (EMS) provider.
As a British-owned manufacturing facility in China and Vietnam, offering end-to-end solutions to our OEM customers in the areas of automotive, medical & healthcare, marine, aerospace electronics and more.
Whether you are an emerging start-up company or a blue-chip corporation, we are keen on providing the most adequate solution for your next project. Contact Us to discuss more details or learn more about our other manufacturing processes and services.
Contact our Customer Service and let us know how we can help to catapult your next project to success.
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If you are looking for metal casting services, our brochure is a great way to discover what Omnidex has to offer. You can download HERE to learn more.
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