Posted on 24 Jul, 2014 by John Mayes
There has been much written about how OEMs should select their Electronic Manufacturing Services (EMS) partner; probably a lot more than has been written about why we still refer to companies as ‘OEMs’ when they no longer manufacture their products, but that’s a different story I’ll leave for another day…
For a company looking to outsource for the first time, to appoint an additional EMS partner, or to replace the one they already work with, the choice can be mesmerising. On the one hand, there’s talk of global businesses offshoring, near shoring, re-shoring, etc. and the roles of so-called tier 1, 2 & 3 EMS players in those ventures. On the other hand, there are EMS companies offering specialisation in low volume high mix or high volume low mix sectors. But, what does it all mean? Perhaps more importantly, how does any of this help when a company is looking to appoint an EMS partner?
In an attempt to try and un-muddy the waters, let’s look at five key considerations to be borne in mind when making your decision:
1) It’s all about fit
Clearly, no two EMS companies are the same and selecting one that best fits your business requires a well thought out approach. In order to filter out the ‘probables’ and ‘possibles', and arrive at a shorter list, the first thing to look for is a good overall fit. Take into consideration the size of the EMS company in relation to your business, the typical volumes they build, the complexity of the products they produce, and then look at their accounts to see how they have been performing.
2) Chicken and egg
Having done this, along comes the chicken and egg dilemma. Do you get someone from the EMS company to visit you or do you visit them first? Whilst this could be debated all day, I would say without hesitation that, from your desk and telephone research, you should select 3 or 4 potential suppliers and go and see their operations. The information gleaned from your eyes, ears and ‘gut feelings’ will repay the investment of your time in spades!
3) Trust your instincts
From the moment you arrive at the EMS company there are things that will tell you so much. A favourite of mine is the “weeds in the car park” test. What relevance is a car park with weeds growing in it, you may well ask? Whilst this may sound trivial, if the company is not concerned with how it projects itself to external visitors, then maybe that tells you something… You will be relying on them to take away cost and hassle, and this demands a systemic approach to attention to detail – either they have one or they don’t.
4) Question time
Once you are inside the building it’s the “Who?”, “What?” and “How?” that should be uppermost in your mind. The sequence and weighting of these elements could again be debated but I have listed them in what I believe to be the order of importance.
- The Who? - Relates to the people employed at the EMS company. Who is in charge? Who will be your day-to-day contact? Who is in charge of the supply chain, production and engineering? Did you meet any/all of them? You need to get an indication about how the company perceives its customers and there is no better way than talking to people across the organisation.
- The What? - Relates to the systems and equipment available to the people working there. This goes beyond checking the capabilities and currency of the surface mount pick and place machines etc. and extends to inspection and test equipment, and the functionality of the IT systems that are available to track and monitor all aspects of your products as they move through the business.
- The How? - Relates to the processes and procedures that bind the whole thing together, i.e. how organised and controlled do you feel it is? Quality accreditations are important trust indicators, of course, but how do you feel they are being implemented and used to provide good customer service? How well it all works can be measured by looking at their On Time in Full (OTIF) performance. Every EMS provider will measure this, those that tell you they don’t automatically disqualify themselves!
5) How much will all this cost?
Finally, there is the cost. You won’t get any meaningful cost details on a first visit as this needs to be investigated, and pricing proposals submitted downstream. You will get a better understanding of the true cost if you are prepared to work with the chosen EMS Company to put together the quotation. By doing so the cost will be far more accurate than by going out to a ‘shortlist’ of multiple companies.
The true cost of acquisition is not just what you see on quotes and invoices. A well organised, customer-focussed EMS company, that continually works closely with their customers to exceed their expectations, will take significant cost out of your supply chain by requiring less of your resource to manage them and avoid issues and ‘line stops’ going forward.
So, given all of the above, let’s drill down to the essence of what you are looking for in your EMS partner: it’s someone who has the material supply chain well managed, such that they have enough material to build your products when required to do so and can respond to unforeseen peaks and orders; they have the right equipment, processes and people to build, configure and test your products; and they have the agility to work with you and deliver what you want, when you want it, how you want it.
Following your investigation, if you genuinely trust that they can and will meet all these essential criteria selecting the right Electronic Manufacturing Services partner is pretty straightforward really!
Image by Jake Bouma