Posted on 24 Sep, 2015 by Neil Sharp
You’ve reviewed the quote and are now in a position to send across an order to your chosen electronics manufacturing services (EMS) provider. Depending on the size of the order, or the complexity of your product, delivery time could range anywhere from a few weeks through to several months.
But have you ever stopped and wondered what happens at the EMS supplier's end after you have pressed the send button on your e-mail?
Well, you may be surprised to learn that a hive of activity takes place the moment your e-mail lands in the recipient’s inbox. Across multiple departments, your EMS partner will start work to ensure everything is in place to deliver your order, on-time, in full, to the quality standards you require.
The purpose of this blog post is to take a look behind the scenes at some of the activities carried out by your EMS provider once they are in possession of your purchase order.
The first thing your account manager will check is that the order you’ve sent across to them matches the quote they sent you. They will be checking that the part number, revision, quantity and price all match. It’s not uncommon for original equipment manufacturers (OEMs) to implement engineering change notes (ECNs) during the request for quotation (RFQ) process - hence the need to verify the original quote against what has now been ordered.
They will also make sure that any additional quote clauses have been covered by the purchase order. For example, there could be materials that carry minimum order quantities, or perhaps bespoke tooling that needs designing and ordering.
Finally, they will collate all of the material quotes obtained during the process and pass them across to the procurement team. Any long lead-time items will be flagged so that the purchasing team can place these on order ASAP.
Once your account manager is comfortable the order they have matches the quote they sent they will liaise with their operations manager to agree a build slot and delivery date. An initial lead-time will have been given to you based on material availability and build time, but it’s unlikely your EMS provider will have secured a firm build slot for you. The reason for this is because there can be several weeks delay between sending across a quotation and you being in a position to place an order – assuming, of course, you move forward with their quote in the first place.
However, on receipt of a firm order your EMS partner should be reviewing capacity against future demand and securing build slots for you. In addition, they will start to plan the resources that are required for your project. This may include the creation of dedicated "lean lines" requiring new workbenches and floor space, or could involve the installation of additional services to an area – like network points, GPS antennas, high voltage power supply or compressed air lines.
Once the materials have been reviewed and a build slot has been agreed, your account manager will then enter your order details onto their system and acknowledge it back to you. Unless they call you to explain otherwise, expect to see something within 48 hours maximum. In addition to confirming back the basics to you - i.e. part number, revision, quantity and price - they should clearly state the delivery date they are working to achieve. In the majority of cases this will match with your original order and their initial quote.
However, if for any reason following the contract review process there are differences, these should be made clear to you. Some EMS companies will actually confirm back two dates to you; the first being your original request date, and the second the acknowledged date following the contract review process.
With your order loaded and acknowledged the procurement team within the EMS company takes over. Often split out by commodity groups, focussing on different material types, the procurement team will begin to secure all of the materials your order requires. This process may include a combination of firm scheduled orders being placed along with the creation of long term supplier contracts. "Protected" or "buffer" stocks are often put in place on key items to help reduce lead-times and guarantee availability.
Due to the range of products EMS companies build on behalf of their clients there is often overlap when it comes to certain materials. Many will share common devices, particularly passive components such as resistors and capacitors and some of the more standard integrated circuits. Using sophisticated replenishment systems the procurement team are able to focus their attention on where the shortfalls lie. In addition, they may need to visit and audit new sources of supply, or negotiate different terms with some of their existing suppliers, based on a change in demand patterns.
Any delivery acknowledgements received back from the supply chain should be entered back onto the EMS supplier’s business system. If, for any reason, a supplier cannot honour the original price or delivery commitment the procurement team will feed this back to your account manager so they can review appropriate solutions and discuss the issue with you.
Your account manager will liaise with their logistics team should your order require additional support in this area. For example, you could be outsourcing suites of large cabinets, which may require specialist lifting equipment - both for the incoming raw materials and the outgoing finished units. Or perhaps you require the finished product to be placed into its final packaging, along with a range of accessories, so they can be shipped directly to the end user.
While the logistics team won’t have finished goods to work with for a little time yet, having an appreciation early on of any addition space or special instructions they are expected to carry out is advantageous to them.
As soon as your order is loaded your EMS partner's engineering team will get notified. The first thing they will check for is whether your order is for something they have built before, or a new product that needs diverting towards their New Product Introduction (NPI) process. For new builds, the engineering team will again review the build data they have to ensure the latest revisions are stored on their internal document control system. At this stage they may also request additional information from, for example, computer aided design (CAD) files, so they can begin to create unique build packs for the production team to use.
If your product contains surface mount components, solder stencils will have to be specified and ordered and programmes for the pick and place machines will be written. Assembly routes will also need adding to the job so that a clearly defined build path and timings can be followed once build commences.
Where software needs loading onto units, the engineering team will need to validate they have the latest version in the format they require. Work can also begin on creating any in-circuit test (ICT) fixtures or flying probe programmes that are needed should these test solutions form part of your order. If functional test is required, and you are planning on sending your EMS provider the test equipment and instructions to use, the team will check with your account manager to find out when delivery is expected, so they are able to familiarise themselves with the equipment and your processes.
It’s likely that you will place a number of orders your EMS provider. Some could be for new products in early stages of design and others maybe for more stable, repeat requirements. The role of your account manager is to orchestrate all of the resources they have available internally - keeping you fully informed with build progress and any issues they feel need addressing.
While the news of material delays or technical queries may not always be welcome it’s important these aren’t swept under the carpet to bite you at a later date.
So there you have it: a number of steps and processes that start to take place the moment you send across your order. Of course, different EMS companies will use different software packages and approach issues in a different way. To some extent it doesn’t really matter – provided you continue to receive the service levels you signed up for in the first place when you initially decided to outsource to them.
Image by Phil Roeder