3 Services Every Electronics Contract Manufacturer Should Offer
Whether you’re new to electronics contract manufacturing or are looking to scale up production of your current product line, contract manufacturing (CM) is an option you may well have considered, and for good reason. Outsourcing your manufacturing processes, or even your R&D process, to a quality CM can benefit your business significantly.
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Let’s take a look at three major benefits here.
1. Cost Savings
Many factors play into reducing costs: skilled labor, inventory, supply chain management and production failures, just to name a few. Working with a CM can save you on overhead costs by eliminating expenses such as real estate, equipment and a production crew.
By working with the CM’s supply chain management team, your company can reap a significant benefit of material planning and purchasing that is critical for new product introduction and subsequent mass production. The CM can also suggest substitute solutions that function the same or better based on availability and cost.
2. Increased Operational Efficiency and Production Flexibility
Testing, modifications, and tweaking until optimal manufacturability is established, this is what a CM does best. It can be said that a CM’s complete business model is built on giving customers the product they need with the best performance/price ratio. Since a CM has already mastered the art of efficiency that your business may not have, using an experienced CM that allows your product to market quicker makes a lot of economic sense.
Issues arise when you are faced with unexpected demand changes (either huge increases or decreases). Nothing is more frustrating than a missed customer delivery. Make sure the CM you choose to work with is agile, flexible and highly responsive to your demand changes. With the help from a CM, businesses do not have to spend financial resources (lay-offs or over-time pay) investing in their own production facilities or labor force in order to meet wild fluctuations in demands.
In addition to demand changes, Asian CMs are also quite accommodating when it comes to minimum order quantity (MOQ) requirements. Market globalization requires CMs to operate in a competitive manufacturing environment by matching agility and efficiency. The incredible flexibility seen in Asian CMs also comes from their strong belief of “Customer Is King”.
3. Quality Enhancement Techniques
You can find a quality off-shore CM who not only saves you cost, increases your operational efficiency, but also enhances your product quality.
One value-added service quality CMs are offering is design-for-manufacture (DFM) services. A DFM review makes sure you products are easy to scale for mass production. The result of a DFM can reduce raw material cost, shorten production cycle, and increase production yields. In short, DFM reviews ensure that you don’t make critical mistakes that cost time, money and possibly the integrity of the product. They improve the overall product quality.
In summary
Staying competitive in today’s economy requires that you employ progressive production strategies. Outsourcing helps organizations focus on their core competency by removing the burden of manufacturing their own products. By partnering with the right CMs your company can realize product cost savings, improve operational efficiency, and enhance overall product quality.
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