Posted on 27 Aug, 2015 by Neil Sharp
It may take time and patience, but original equipment manufacturers (OEMs) that are willing to invest in nurturing a long-term relationship with their electronics manufacturing services (EMS) supplier end up reaping the rewards in the long-run.
So, when it comes to building a long-term relationship with your EMS provider, what can you expect to gain? The following points outline four good reasons why taking a longer term view on your outsourcing relationship could yield substantial benefits.
1. Long-term relationships bring peace of mind
Whether you are outsourcing just the printed circuit board (PCB) assembly; or entrusting your entire production and test operations to a supplier - choosing a partner that has lasted the test of time means you can rest assured that your product is in good hands.The financial health and stability of the EMS provider, along with their reputation and experience within the marketplace, will be key considerations for you. These qualities help provide the confidence that the supplier has the capabilities you need when it comes to delivering high-quality products on a consistent basis, in accordance with your customers’ demands.
The upside of this is that you'll be in a position to turn your attention to focus on your core competencies – for example, designing new products and selling more goods and services to your clients, rather than dedicating time and effort to worrying about micro-managing your outsourcing activities. How could your business benefit from this extra focus?
2. Problems can be identified earlier and rectified
Over a period of time the EMS supplier will gain an excellent understanding of your processes and expectations. This will lead to a level of intuitiveness flourishing between both parties, which will promote a seamless and more productive relationship.
It will also mean the supplier will be able to identify and rectify problems earlier – for example, highlighting gaps within a build pack or potential design for manufacture (DFM) issues, thanks to their long-term, hands-on involvement. When production deadlines are tight, even small improvements to the manufacturing lead-time can mean the difference between success and failure.
3. Your supplier will pre-empt your needs
Through looking at your order history, your supplier will be able to tell a lot about your purchasing profile - for instance, when you are likely to have a peak in sales, where potential supply chain issues could lurk and what types of components or materials could be affected.
This often means they will be able to anticipate what you need in advance and should proactively order the components in good time, while reserving the right levels of resources, in order to help meet your manufacturing schedule. This level of knowledge about your supply chain can be extremely beneficial in times of extended component lead-times and/or product allocations etc.
4. Trust accrues and scope extends over time
As the relationship develops, trust will build and your EMS partner will begin to feel more like an extension of your own organisation, rather than simply an external supplier. Over time, peer to peer bonds will form, allowing the EMS provider to gain a deep understanding of the challenges your organisation may be expected to overcome in order to grow – from strategic "top level" discussions, down to those intricate details associated with day-to-day operations.
This means they can identify new ways of enhancing the service they offer you - for instance, by offering additional services where they could add value at each end of the product lifecycle, such as design support, configure-to-order, comprehensive test solutions, direct shipment and repairs.
Avoiding complacency in a long-term relationship
As we have discussed, there is much to be gained from investing in a long-standing relationship with your EMS provider. However, like any relationship, neither side should be taken for granted - there is no room for complacency. There is still an argument, therefore, for keeping your eyes on the market for broader-based or more flexible partnerships.
Without knowing "what's out there" you could be missing out on an opportunity to get a more comprehensive and/or cost effective service elsewhere. If your supplier isn't continually investing in ways to retain their competitive edge, as well as helping you boost yours, do they really deserve your blind loyalty?
It really is a case of weighing up the pros and cons and recognising the benefits that can be gained from a long-term relationship.