Posted on 19 Feb, 2015 by John Mayes

outsourcing electronics assemblyWhen an electronics manufacturing services (EMS) company takes on the production role for a customer there are a number of areas where problems can arise.

However, regardless of the scope of the project - from producing one or more PCB assemblies (PCBA) or a ‘box build’ product assembly, for instance, right through to a complete transition of end-to-end manufacturing processes - there are a number of proven approaches that can help eliminate surprises that could otherwise catch out the unwary.

Remember, we are talking about outsourcing here not ‘out-sorcery’ - it’s not magic, it just needs experience, planning and a consistent, proven approach to ensure a smooth transition. With that in mind, this blog post will look at three key elements which exist within the outsourcing electronics assembly process, and explain how it is possible to eliminate concerns relating to these for anyone embarking on an outsourcing strategy for the first time.

1. Transferring local knowledge

Firstly, what do we mean by the term local knowledge? Well, in truth, this is the in-depth understanding of how your products are produced, built up over time by members of your production team; in a surprising number of cases, the learning which has evolved from this incremental process can be quite different to that which is stated in the documentation and manufacturing build packs you have created. By working on your products month-in-month-out, your production staff will have developed a comprehensive knowledge of how they go together, and this may well include tweaks and process improvements that, for whatever reason, have not been documented.

Contract Electronics Manufacturing companies (CEMs) are used to unearthing these ‘undocumented processes’. Over time, they will have developed various techniques to identify anomalies during any handover period, which will include talking to your production staff, observing and auditing production builds and checking ‘Golden Sample' units against your existing documentation.

Following on from this, as part of taking over the responsibility for producing your PCB or product assembly, a good CEM provider will then review what should be added to their own build packs (i.e. not all of these ad-hoc adaptations may lead to build efficiencies) and ensure that any future design changes and/or improvements are checked and fully documented on your behalf.

2. Hitting the ground running

During the earlier stages, it’s important to avoid the temptation to change a number of processes straightaway. This applies to all outsourcing projects, but is particularly critical if your requirement is for total outsourcing, in other words, where there is to be a transition of end-to-end processes from supply chain and manufacturing operations, through to test, repair & distribution.

Different EMS companies will, no doubt, have different approaches, but many will endeavour to break projects down into key phases. In the first phase, your preferred assembly partner should look to take over your procurement, manufacturing activities and repairs using your existing supply chain model and operating procedures. Key to the success of this stage is to minimise the degree of change. The fewer changes made at this early stage, the fewer variables the transition teams (within both organisations) have to manage. Security of supply is the overriding aim here.

The goal for the EMS provider will be to replicate as far as possible your existing processes, in terms of both purchasing activity and manufacturing operations within their own facility. It’s likely that your existing supply chain for components and assemblies will be utilised during this first stage of the project. Where appropriate, your contract manufacturing partner will also take over existing commitments with your material suppliers and agree a mechanism with you on how best to utilise any surplus material stocks you may have already committed to.

Data migration is another key risk factor that could impact the ongoing security of supply. To alleviate this concern, it’s recommended that both you and the EMS company second IT personnel into the project team so they can create detailed plans on how best to electronically migrate over the data (Bill of Materials, supplier contact details, existing stock and current liabilities, unit cost/lead-time information etc), whilst at the same time mirroring your existing part numbering system so that revision control and a certain degree of ‘familiarity’ from your point is retained.

Clearly, you may regard some suppliers as ‘strategic’ which is why during this initial phase it’s recommended that all of your existing suppliers remain as preferred vendors to your EMS provider, and may remain so providing quality, price and delivery are considered appropriate. This first phase of the project is considered complete as soon as your preferred EMS company is shipping you compliant product, on-time in full.

3. Focussing on the end game

Once security of supply has been established, a strong focus on improving manufacturing efficiency and reducing material costs should be introduced. The avoidance of changing processes is no longer appropriate, and experience gained in the first phase of the transition will allow your assembly partner to evaluate process improvements and introduce manufacturing efficiencies.

This could include a variety of proven approaches, for example, including the possibility of incorporating an ‘embryo build.’ This is where product is only routinely assembled up to a particular point in the build, allowing it to then be dynamically configured-to-order depending on the specific requirements of the application or end customer for each order. This approach is particularly effective if you have a range of ‘top level’ products that all use a common base platform and raw materials.

Finally, regular business review meetings should be held to allow you to measure progress against your original outsourcing goals and objectives. If, for example, cost reduction was one of these, then the EMS provider’s purchasing department should be able to demonstrate to you that they are continually evaluating your Bill of Materials, by commodity group, with a view to achieving material cost reductions for you.

The transition from OEM to EMS should not rely on luck. There are tried and tested formal approaches that have resulted in numerous seamless transitions. If these are followed then the no-surprise, low drama project that we all prefer is eminently achievable.

Image by: Sangudo

Topics: Best Practice, Supply Chain, Outsourcing

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