Contract manufacturing offers a number of benefits. It can help you save money over manufacturing things in-house. It may be the only option for meeting a spike in demand without massive, unplanned infrastructure spending. It is certainly safer than buying equipment that may not be properly utilized in the future. You may contract manufacturing of small initial runs so you don’t have to alter your existing, optimized production lines until the design is ready to go into mass production. Here are a few factors to consider so that you choose the right contract manufacturer.
Technological Capability
Can they make it? And can they make it to your specifications? For example, you want to know that they have the in-house expertise to make multi-layer circuit boards with embedded components, if that’s what your design calls for. And not every PCB house can do this. Another variation of this is size. There are many PCB houses that can make a small board like those that go into small appliances, but very few can make the massive circuit boards found in cell phone cell sites or the backbone of a computer server. Once you verify that they can theoretically make the item is to verify quality. They may be able to make metal fittings, but it may not be to your tight tolerances.
Variations of this include compliance and qualification. Do they meet ISO or other industry standards that you need your suppliers to meet?
Turnaround Time
When selecting a contract manufacturer, too many companies make the choice based on price when the right choice is based on turnaround time. The turnaround time is how fast they can get you an assembled item ready for test or assembly into a next higher assembly once you give them the design or pay for the product. You can’t afford to pay a low per-item cost and then wait six months for them to make it.
Capacity
Capacity is an often overlooked issue with contract manufacturing. A contract manufacturer may specialize in low rate initial production runs or creating small batches of prototypes. In this case, they cannot make ten thousand for you. A mid-sized manufacturer may be able to make several thousand boards, but they may not have the bandwidth to handle an order for tens of thousands. Or if they do, it may come with unacceptable delays.
Location
Location matters for a variety of reasons. The companies relying on Chinese manufacturers are suffering right now due to travel restrictions and delays caused by the corona virus. That means the Chinese flu outbreak is causing shortages in Apple’s factories. You could run into similar problems if another Republican trade war increases tariffs or a typhoon interrupts shipping from the other side of the world. That is why you want to choose local suppliers whenever possible. Regional suppliers are a second choice. Someone on the same continent is generally better than someone shipping from the other side of the world. This results in faster delivery times, on average. And it can reduce the carbon footprint of your organization, since you aren’t shipping a large volume of critical parts from the other side of the world.
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