Why customers outsource contract electronics manufacturing
01 March 2019
To improve its manufacturing efficiency and levels of quality still further, contract electronics manufacturing (CEM) firm, Offshore Electronics recently conducted a detailed research survey of its customers.
This article was originally featured in the Electronics Outsourcing supplement included in the March 2019 issue of EPDT magazine [read the digital issue]. Sign up to receive your own copy each month.
As Steve Marshall, Managing Director at Offshore Electronics explains, the company undertook this research to better understand the challenges its customers face and why they outsource their electronic manufacturing requirements to a CEM provider.
The research identified four main reasons customers outsource to contract electronics manufacturing providers:
1. Electronics manufacturing is not seen as a core skill
For 75% of customers, electronics manufacturing is not seen as a core skill. For example, a number of customers have in the past considered setting up dedicated in-house electronics manufacturing facilities, but eventually concluded that their focus should be on their core skill sets (for instance, design or application/industry domain expertise). For the more specialised manufacturing processes, such as printed circuit board assembly (PCBA), this would instead be outsourced to a CEM company that had already made the investment required to produce the highest quality electronics assemblies.
2. Access to specialised skills and knowledge
Over 50% of customers don’t have access to specialised electronics manufacturing skills and knowledge, so partnering with a CEM provider like Offshore Electronics makes sound commercial sense. We have almost three decades of experience in providing a complete and cost-effective solution for a wide range of electronic manufacturing requirements. Our experienced engineers understand both the business requirements and the technical demands of our customers. We have a 60-strong team, a high percentage of whom have been with the company for many years, offering a unique combination of knowledge and skills that add real value to every customer.
3. Faster speed to market
Over 50% of customers stated that faster speed to market is a key reason for outsourcing. For example, a number are innovative product developers, handling all design and prototyping in-house, but then bring in specialists when they need to upscale and move to full volume manufacturing. Partnering with a CEM enables them to benefit from the knowledge and experience of specialised electronics manufacturing, to eliminate production inefficiencies while producing each PCBA or electro-mechanical assembly as quickly as possible. A classic example of this relationship is Offshore’s New Product Introduction (NPI) service, which is designed to help OEMs drive down production costs, improve quality and reduce time-to-market.
4. Not prepared to make the investment in systems (particularly SMT) and people
A significant proportion of our customers chose to outsource as they do not believe it makes commercial sense to make the high levels of investment in the latest electronic manufacturing systems, especially SMT (suface-mount technology), or to recruit or train the specialist staff required. It was generally felt that although the funding wasn’t normally an issue, any investment would be better made in their core business functions, rather than in systems and staff that may not be fully utilised or would need adapting every time a new product line was introduced. By outsourcing the contract electronic manufacturing to Offshore Electronics, they had access to the most advanced technology and best people, yet retained optimum manufacturing flexibility.
A CEM partnership enables electronics companies to focus on their core business: the design, marketing and selling of electronic products. The manufacturing processes, including testing and assembly, can be outsourced to a specialised electronics manufacturer, such as Offshore Electronics, who can deliver a consistent standard of quality, thanks to advanced production facilities and highly-skilled, IPC certified staff.
By conducting this research with its customers, Offshore Electronics have confirmed a better understanding of why customers outsource – and the advantages of using a CEM as a manufacturing partner.
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