Posted on 14 Aug, 2014 by Graham Smith
There are hundreds of Electronic Manufacturing Services (EMS) firms out there, and finding the right one can feel like searching for a needle in a haystack. Carrying out desk-based research, or trawling through supplier lists and around trade exhibitions, can be a daunting task.
You may be tempted to dive straight in and contact as many suppliers as possible in order to get down to your shortlist quicker. But resist this temptation. It will end up making the process longer for you and worst still, you may find that the suppliers who are most appropriate for your business don’t seem very interested in what you have to offer.
So what sort of things should you avoid doing when making contact for the first time with a Contract Electronics Manufacturing provider? And how can you get to your shortlist in the most efficient way?
The following are five things you should make sure you avoid:
1) Sending your request to ‘enquiries@’ e-mail addresses
By sending an enquiry in ‘blind’, you risk it being delayed whilst it’s directed to the right person. Or worse still, it might not be given the priority it deserves by the EMS company. Instead, take a few minutes to phone up the EMS company, briefly introduce yourself, your process and explain that they will shortly receive an RFI from you. Which leads us nicely onto the second thing to avoid.
2) Asking for complex ‘Request for Information’ (RFI) documents to be returned
RFI’s are becoming more and more common as customers attempt to find objective criteria to select a short list of appropriate suppliers. Most EMS companies understand this and are happy to provide the information. It’s perfectly reasonable to enquire about the size of a business, or ask questions about equipment, areas of expertise and other related resources. However asking a supplier you have not yet spoken with to list their top 10 customers along with the names, qualifications and life history of the senior management team may be a step too far! Keep your initial RFI concise and relevant, ideally only listing the ‘must have’ criteria you are looking for in a potential partner to achieve your outsourcing objectives. You can get into more detail once you are down to a more manageable list.
3) Requesting pricing for a wide range of volumes (such as 1, 5, 50, 1000 and 100,000)
It takes time for a contract electronics manufacturer to put together accurate pricing, so if you don’t intend to place orders in the volumes requested, you could be delaying the process. Worst still, the supplier could see your request as a benchmarking exercise and limit the amount of resource they put into getting accurate material and labour quotes. Be specific and realistic with any quote request, e.g. 5 prototypes to start with, 150 units in year 1, built typically in batches of 25, increasing to 250 units in year 2. This will gain far more credibility with your potential supplier and show that you have a clear understanding of what your current and future demand is going to be.
4) Being unrealistic with your costs
For example, don’t expect your EMS partner to sell you the material for less than the direct costs you pay yourself. Those looking to outsource their manufacturing accept that a contract manufacturer will add a handling margin for material. Asking for an ongoing cost reduction programme is fair enough, once the EMS company has a chance to leverage its purchasing capabilities and breadth of supply chain, but expecting a supplier to buy material for 10% less than your costs on day 1 is unrealistic.
5) Ignoring your ‘gut feel’
Unfortunately there isn’t an RFI document in the world capable of capturing your instincts - and so often you will be right. So, if you have any underlying concerns with the potential supply partners you are looking at, it’s worth spending time now drilling down into these before you move on to your shortlist. If there doesn’t appear to be a good ‘fit’ between you and the potential supply now, what is going to change your mind further down the line?
By avoiding some of these issues you stand a good chance of being able to quickly shortlist 3-4 quality suppliers for further review. And by being specific in your initial approach, you will help speed up the process; with each supplier focussed on delivering you a tailored outsourcing solution that adds value and helps you to meet your overall business objectives.
Image by Alex Proimos