Contract Electronics Manufacturing and PCB Assembly Blog

Are You Still Offshoring Your Assembly Electronic Services? Domestic Solutions Are Now Much More Attractive!

Posted by Matthew Turpin on Thu, Mar 05, 2015 @ 07:00 AM

american based electronicsHandling your manufacturing in the US is becoming more cost-effective every year!  Despite the trend in the earlier 2000s to move operations offshore, a combination of factors are making a new case for on-shore manufacturing.  Simply put, sending your assembly electronic orders to Asia is no longer the deal it used to be.

In fact, according to research group Alix Partners, the overall cost of US manufacturing investment will be at parity with China within another year or two.

Furthermore, this isn't simply something being done by smaller manufacturers.  According to this J.P. Morgan report even major companies known for their offshore focus are bringing business back home, including Apple, Whirlpool, Caterpillar, General Electric, and even Wal-Mart.  

What's prompting this sudden interest in US manufacturing and assembly electronic services?  Here are a few of the reasons, as we see them.

Why Offshoring No Longer Saves Money Overall

1 - Supply Lines

Honestly, those two words alone could justify a move to nearby electronics assembly and production facilities.  With both fuel costs and shipping prices going up substantially in the last few years, the cost burdens associated with offshore work have gone up significantly... and they're not likely to come back down.

Even if sourcing parts in the US may bring higher sticker prices, the overall costs of getting them to your facilities and then into customers' hands are vastly cheaper.  Plus, short supply lines allow you to have actual repair services for warranty claims, rather than (as is often standard) having to send out full replacement units for any component failure.

2 - Inflexibility

Another problem with those long overseas supply lines is the time it takes to shift them, if the market changes.  If your offshore assembler already has a one-year contract for Widget A in place, and brand-new Widget B suddenly does the same job for half the cost, guess what?  You're not getting Widget B in your product for a year without paying huge penalties.

Nearby suppliers means you can have shorter supply lines AND shorter supply-line contracts.  In a market that frequently shifts every six months or less, this can give you significant advantages over other companies who are tied down by their supply lines.

3 - Counterfeitsfreight routing options

Still talking about supply lines here, another issue is counterfeit parts.  Most overseas suppliers have very poor parts control, and internal corruption is rampant.  Even the US Air Force has seen counterfeits show up in their overseas supply lines.

America has stronger business regulations, tighter counterfeit laws, and more-reliable shippers. Reshoring means having far more trust in the components you're putting in your products.

4 - Cost Of Living

The cost of living in China is skyrocketing, plain and simple, and it's largely a predictable result of the glut of manufacturing a decade ago.  Some estimates put the Chinese COL as rising at nearly 20% per year at this point.  Which means that, for the last 4-5 years at least, the cost-savings of Chinese manufacturing have dropped by nearly that much each year.

At this point, there is very little cost difference between Asian and American manufacturing, even just looking at the up-front costs.

5 - Quality

Let's be honest: "Made in China" has never had a lot of cache and, if anything, the flood of cheaply-made Asian products has only made that reputation worse.  American electronics manufacturers generally have newer equipment and techniques, with better oversight, and better individual employee productivity.

This, of course, pays off with longer-lasting products, fewer post-sale claims, and an overall better corporate reputation among customers.

American Electronics Assembly: You Get What You Pay For

Offshoring today is a "pennywise, dollar-dumb" strategy.  Early savings will almost always be mitigated by later problems that arise.  On the other hand, nearshoring is nearly at price parity with Asia, but with better products and services.

Want to learn more?  Contact ZenTech today to learn what domestic assembly can do for you! 

 

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Topics: American PC Board Assembly, American based product assembly, assembly electronic

3 Tasks To Expect From A PCB Assembly Manufacturer

Posted by Matthew Turpin on Tue, Feb 24, 2015 @ 07:00 AM

Printed Circuit Board AssemblyAlthough many small to medium sized electronics companies come to the realization that they would benefit from the assistance of a third party manufacturer, most do not have any idea what it is that they should actually expect from such an operation. But without a good idea with regards to what your PCB assembly manufacturer should be doing for you, how can you be sure that you are getting the best return on your investment? To enable you to feel confident that you are getting the most bang for your buck, here are three tasks that you should always expect your contract manufacturing partner to complete.

1. Improve Product Efficiency and Effectiveness

If your business already has a team of qualified and skilled designers and engineers, you will require more of your PCB assembly manufacturer than the ability to develop design schematics. Although, in some instances, you may delegate this task to your contract manufacturing partner in an effort to save time and money, it would be more to your benefit to utilize the industry experience of the agency's employees to evaluate your current designs and improve upon them. In many cases, your contract manufacturer may find ways to cut down on the amount of parts or materials that must be utilized to complete your concept, thus saving your business a great deal of money in the long run. Additionally, your partner may be able to point out fundamental flaws in your plan that your team previously did not notice, find new and effective ways to resolve problems that your company has been facing with a particular product, or show you how to take your device to a while new level.

2. Provide the Best Materials and Technology

If your company is relatively new, or is smaller than the majority of your competitors, you may be faced with the challenge of establishing good relationships with parts suppliers, or the inability to purchase the latest and greatest machinery and technology that is required for the design and manufacture process. By establishing a contract with a reputable, established PCB assembly manufacturer, you can easily bypass these hurdles and keep up with all of the "major league" players. Your contract manufacturer will have been in the industry long enough to have built up strong partnerships with suppliers, meaning that you will always get the best deals on high quality parts and equipment. Additionally, you will not be faced with the task of purchasing expensive equipment. Instead, you will have the ability to take advantage of the state-of-the-art tools and machinery that your manufacturer has in their possession. In this way, you can rest assured that you will always be able to develop and produce the best products possible, so that your customers will remain satisfied and loyal to your business in the many years ahead.

pcb assembly3. Offer Comprehensive Fulfillment Services

The work of a great PCB assembly manufacture is not finished after the initial production of your electronic devices. Instead, the best manufacturing companies will be more than happy to provide testing and fulfillment services that will see you and your customers through to the very end. To begin with, all of the devices produced should be thoroughly tested for both operability and functionality to ensure that each product will meet consumer expectations in a way that is safe and effective. Any underlying issues should be pinpointed through troubleshooting and repaired promptly. Additionally, your contract manufacturer should offer to provide flexible and customized solutions for your product throughout all phases of its life cycle. This should extend to a direct customer ship and repair return depot which will ensure that devices are fixed and sent back to clients faster, and that the need for expensive warranty replacements is eliminated. 

By demanding these three things from your PCB assembly manufacturer, you are sure to enjoy the highest possible level of success in your business. 

 

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Topics: American PC Board Assembly, American based product assembly, pcb assembly manufacturer

8 Things to Look for in an Electronics Manufacturing Service

Posted by Matthew Turpin on Thu, Feb 19, 2015 @ 07:00 AM

electronics repair serviceAre you looking for a superior electronics manufacturing service to contract with in the new year? If so, you're probably already well aware that there are numerous businesses that offer design and manufacturing services for you to choose from. Being able to differentiate between the best manufacturers and those that are sub-par, though, can initially seem tricky. If you're not exactly sure what it is that you should be looking for, you may not even know where to begin in narrowing down your options. In order to help you make the best and most educated decision possible, we've put together these eight factors that you should insist upon before hiring an electronics manufacturing service.    

1. Industry experience  

First and foremost, it is always in your best interest to hire a contract manufacturing company that has an extensive history in the electronics industry. Those businesses that are well-established can be counted upon to provide high quality work, and will take pride in each board that they design and produce. Don't hesitate to ask your prospective manufacturer about how long they have been in business, and what their criteria is for hiring employees.  

2. Design capabilities  

In addition to providing customers with an electronics manufacturing service, your outsource partner should also have the ability to help you throughout your design processes. Whether you are starting completely from scratch, or simply need a fresh set of eyes to review your current specs, the best manufacturing companies can help you to streamline your plans and make them as efficient and effective as possible.  

3. Advanced technologies  

What type of tools, machinery, and equipment does your prospective electronics manufacturing service utilize? It's in your best interest to choose to give your business to a company that takes advantage of all of the latest technologies to ensure that your products can be developed in such a way that they remain highly competitive in the marketplace.  

4. Industry compliance  

Never work with a contract manufacturing company that does not adhere to the most current industry standards. In addition to complying with various industry rules and regulations for design and manufacture, your partner company should be willing to comply with your specific standards for production.  

5. Environmentally responsible  

The best electronics manufacturing service providers will always take the environment into consideration. Make sure that your prospective manufacturer is Restriction of Hazardous Substances (RoHS) compliant and can help you convert any of your board's specific designs to an RoHS compliant plan. Not only will this protect our earth, but it will also improve your image with your customers.  

6. Product testing  electronics industry

Your contract manufacturing service should never be satisfied with simply producing a batch order of PC boards. Testing should always be completed to ensure that each unit produced is up to par, and is highly functional and performs as expected. Testing the products for any design flaws or issues can help you to analyze trends and catch major production errors without causing you to waste an excessive amount of time or money.  

7. Supply chain management  

Not all supply chain solutions will work for all electronics companies. Because of this, your contract manufacturer should have sourcing agreements for components and commodities from all around the globe, and be willing to meet your needs pertaining to contract requirements, preferred vendors, sourcing restrictions, etc.   

8. Fulfillment Services  

It's never a good idea to choose an electronics manufacturing service that does not take care of your needs post-production. A great company will offer fulfillment services including troubleshooting any faulty PC boards and making the necessary repairs before returning them from their depot. In the end, this will save you a lot of time and money on labor or on warranty replacement units.    

Get the very most out of your electronics manufacturing service in 2014. By insisting on this set of criteria, you can easily pick out the best from the rest.

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Topics: assembly manufacturing, American based product assembly, electronics manufacturing service

5 Characteristics Of A Great Contract Manufacturer

Posted by Matthew Turpin on Tue, Feb 17, 2015 @ 06:00 PM

Professional-Electronics-DesignAs a small to mid-sized electronics company, you may find yourself struggling, from time to time, to keepup with the large brands and businesses. While these "big fish" game players may be able to afford to employ a large staff of skilled designers and engineers, and stay on top of the latest and greatest assembly machinery, you may not have the same resources available to you. This is not an uncommon problem. To find success, many SMBs choose to contract the production of their PC boards out to a third-party manufacturer.

Entrusting this task to an outsider, though, can be nerve-wracking. Your PC boards, after all, play a substantial role in the efficiency, effectiveness, and appeal of your devices. In order for you to keep customers happy and grow as a successful business, it's important that you find the perfect contract manufacturer for the job. But how can you sort through your prospects and recognize the best from the rest? This post will explore the 5 characteristics of great contract manufacturers so that you can narrow down your options and make your choice with confidence.  

1. Skilled & Experienced  

For obvious reasons, you want your contract manufacturer to be well-established and to have the skills and experience required to property construct your PC boards. It's wise to do a bit of research to find out how long your prospect has been in business, and what their background is in the industry. Another good idea is to ask your prospective manufacturing partner what types of experience or level of education they require from those that they hire to design and construct the boards. The best manufacturers will be operated by seasoned individuals who demand the same level of expertise from their staff.  

2. Flexible  

What types of services does your contract manufacturer offer? It's always in your best interest to narrow down your prospects to those that are willing and able to provide an array of services and are flexible to work with. For example, you may typically only require a contract manufacturer to assemble your boards, but in once instance, you may need help in correcting design flaws or in developing a prototype. Your partner should be able to help you with these tasks on an as-needed basis.  

3. Current  

In order for you to keep up with the competition and satisfy your customers, you need to give your business to a modern contract manufacturer who stays current with the latest manufacturing techniques, industry standards, and equipment. As technological advancements continue to be made, new manufacture equipment is being developed that can help speed up the production of boards, and help to reduce glitches or errors.  pcb assembling

4. Well-Connected  

One of the advantages of working with an experienced contract manufacturer that has been in the business for awhile is that they are often well-connected. If your business is just starting out, or is relatively small in size, you may find that it's not always easy to develop strong work relationships with suppliers. When you partner with a great manufacturing company, though, they will have already made these connections. This means that the cost to produce your boards may be decreased, as manufacturers with strong-supplier relationships will be able to work better deals.  

5. In it for the Long-Haul  

You don't want a manufacturer who will leave you high and dry if something goes wrong with the boards after production. The best contract manufacturers will work with you to provide fulfillment services. Troubleshooting and repairing the problem is cheaper than replacing the entire PC board.    

When outsourcing the construction of your PC boards, there's nothing more important than feeling certain that your contract manufacturer has the skills, experience, and tools required to do the best job possible. By seeking out these 5 characteristics in your prospects, you'll find a partner that will take care of your needs and help you to thrive. 

Topics: contract manufacturing, American based product assembly

4 Reasons to Consider Hiring A Contract Manufacturing

Posted by Matthew Turpin on Thu, Feb 12, 2015 @ 07:00 AM

Contract Manufacturing

A growing number of companies are turning to contract manufacturing services as a means of improving their own existing business models. Could this be a viable solution for your needs? If you're on the fence, take a look at 4 of the many ways in which a contract manufacturer could help to improve the development of your electronics.

1. Superior Technologies

Wouldn't it be great if you could take advantage of the same design, assembly, and production technologies as your largest competitors? While it may be easy for the "big guys" to spend money on the latest and greatest equipment, it's not always a possibility for you. When you partner with a contract manufacturing service, though, you are able to tap into these valuable resources without being required to invest in the technology, house it, or maintain it. Suddenly, you're much more competitive in the consumer marketplace!

2. Knowledge & Experience

Who wouldn't love to be able to take advantage of talented industry professionals with a great deal of knowledge and experience without actually having to pay their salary? That's exactly what you get when you make the decision to work with a contract manufacturer. You'll be able to obtain design and manufacturing input from a team of experts who have been working in PCB engineering, assembly, and repair for years. This will help your own staff to learn and grow, while also enabling you to offer a superior product to your buyers.

3. Superior TechnologiesContract Manufacturing Company

Wouldn't it be great if you could take advantage of the same design, assembly, and production technologies as your largest competitors? While it may be easy for the "big guys" to spend money on the latest and greatest equipment, it's not always a possibility for you. When you partner with a contract manufacturing service, though, you are able to tap into these valuable resources without being required to invest in the technology, house it, or maintain it. Suddenly, you're much more competitive in the consumer marketplace!

4. Excellent Fulfillment Services 

Just because you offer a warranty on your boards and products doesn't mean that you should throw away money on replacement units when something goes wrong. When you have a contract manufacturing company on your team, you can address problems in a more cost-efficient manner. Through careful troubleshooting, your contract manufacturer can pinpoint the problem. Often, it can be traced to a single failing component which can then be replaced for a fraction of the cost to replace. 

How could a contract manufacturer help you?  

 

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Topics: contact manufacturers, American based product assembly, electronics contract manufacturing

American Contract Manufacturers Can Take You All The Way

Posted by Matthew Turpin on Tue, Feb 10, 2015 @ 07:00 AM

pcb assemblyIt's hardly a surprise that following a decade or two of using low-cost, low-frills overseas assembly plants that electronics companies would want more from their contract manufacturers.  It's a new market these days, with a much better-informed customer base who demand higher quality from their products.

Also, over the years, the ROI on overseas production has dropped rapidly.  Between cost-of-living increases, supply line difficulties, and communications problems, Asian production centers are now nearly at parity with onshore electronics manufacturing.  

Plus, American manufacturers haven't been sitting on their heels.  They've been steadily upgrading their factories and adding services you can't get overseas.  A modern domestic assembly partner can assist in every aspect of product creation, from initial design all the way through to post-sale support.  

The result is a full package of services that make American contract manufacturers a superior option.

Local Contract Manufacturers Bring Far More Benefits

1 - R&D And Prototyping

If all your company has is an idea a domestic manufacturer can still see your product become reality.  Extensive R&D and prototyping services can quickly build test platforms, add or remove features, and refine your concept until it creates a product that fits your market profile.

2 - Design Optimization

Few good designs can't be made better, especially with the latest in manufacturing technologies involved.  When you partner with an electronics assembler with latest-generation equipment and skills, they can very often reduce the size, weight, or component count in existing designs.

The result is a better product at less cost to you.  A little money spent optimizing and prototyping beforehand can pay off with big savings on the main production run.

3 - System Software

Few overseas electronics manufacturers provide their own system software to match the devices, and would you necessarily want them to?  However, today's American electronics firms can provide all the software you need, designed to exactly match the specs of the device being produced.  

This eliminates the need to contract out the software, cutting another middleman out of the process.

4 - Bankable Certifications

Thanks to much more robust regulations on western electronics manufacturers, you have a lot more guaranteed security that you've got a partner who's truly capable.  Major electronics certifications don't come easily, and they're usually one of the most reliable indicators available of a company's competency.

And if the company is certified to send electronics on NASA missions, they're going to be well-equipped to handle your terrestrial needs too.

5 - Extensive Failure Analysespcb assembly

No piece of electronics lasts forever, and every component on a board has a certain lifespan.  When working with a company that has controlled supply lines, they can predict with great accuracy both the average lifespan and average failure rate of every component on the board.

In turn, this can be used to pre-stock components likely to become needed in post-sale support, eliminating costly special production runs to correct for defects.

6 - High Mix Capacity

Right now, you can't release just one version of a product to the market.  The customer demand for personalization makes it a near-necessity to have several variations in a range of colors, sizes, capabilities, and whatever else is trendy among buyers.

Relatively few overseas suppliers are prepared to produce a wide mix of final products from similar specs.  It usually involves retooling the plant at great expense for each run, whereas domestic facilities processes optimized for multiple simultaneous runs.

7 - Repair And Support Services

Another major waste that often occurs with overseas production involves support costs.  It's just not cost-effective to send products overseas for repair, not to speak of the timeframes involved.  So, companies using oversea manufacturing generally just hand out new products in any defect.

Why waste good products?  Domestic manufacturers can support and repair their own electronics, vastly reducing the cost of warranty claims.

You truly can get a lot more for your money from American electronics manufacturing.  Contact ZenTech today to learn more

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Topics: contract electronics manufacturer, American based product assembly, american electronics design services, contract manufacturers

With Each Year, There's More Reason To Return To American PBC Assembly

Posted by Matthew Turpin on Mon, Feb 02, 2015 @ 07:00 AM

electronic manufacturing companyIt's no secret that reshoring is on the rise, with an increasing number of companies - even some of the biggest - bringing their manufacturing services back home to America.

While an Asia-based PCB assembly manufacturer may still be a bit less expensive overall, they're quickly being displaced by much more robust domestic manufacturing that provides services overseas factories simply aren't able to offer.

If you simply need a single product pressed quickly, looking overseas might do the trick.  However, in an increasing number of cases, a domestic partner makes far more sense.

Five Times When You Need A Domestic PCB Assembly Manufacturer 

1 - You don't have a finished design.

Most overseas electronics manufacturers take a "what you see is what you get" approach to electronics creation.  You send them schematics, and they send back whatever you told them to make.  

That's fine if a company has an expert electronics designer on-staff, but it creates barriers for firms that want to get into electronics production without having in-house expertise.  American electronics partners can take an unfinished design, or even just an idea, and prototype it until it's ready for prime time.

2 - You're in a fluid market.

While some industries have avoided this (so far), an increasing number of markets have become fluid and unpredictable in recent years.  The rise of the Internet and online consumer groups has greatly accelerated the "product churn" rate in electronics, with fads coming and going faster than most can even keep up with.

Overseas electronics firms tend to have lengthy supply lines, and much longer delays in making changes to a production run.  Sometimes the supply lines will be contracted for months in advance, hindering your ability to stop using particular components. 

Near-sourcing your PCB assembly manufacturing greatly reduces the time needed to change a product or release a new version to take advantage of recent market shifts.

3 - You care about your consumer reputation.

Another issue a lot of companies don't consider is that "cheap Chinese manufacturing" has a much different connotation for a lot of consumers.  Products coming out of countries with low-cost manufacturing tend to have much poorer QC than from domestic partners, and customers will actively avoid products seen as being "knockoffs."  

Plus, there's an increasing PR burden associated with overseas work.  Just look at the endless negative media attention that Apple receives due to the various abuses at their main supplier, FoxConn.  

The end users don't care about subcontracting.  When problems with a device's manufacturing hit the news, they blame the name that's on the box.  assembly manufacturing

4 - You want a wide range of products.

It's very rare these days for a company to only release one version of a piece of hardware.  Customers generally demand more choice than that in their electronics, asking for a range of custom options to fit various niche buyer groups.

Modern American PCB assembly manufacturers have assembly lines which can capably handle a high mix of different products, while still sharing the same facilities and parts sourcing.  They can optimize the production processes to minimize the extra costs associated with having multiple product variants.

5 - You lack product support services.

Sure, everyone's going to virtual call centers these days, but is someone at home in their bathrobe going to know the ins-and-outs of your products?  An increasing number of US electronics assemblers are adding post-sale support to their service range.

After all, no one is going to know the product better than they do, and they have direct access to components for doing repairs.  Plus, your domestic customers never have to wait for overseas shipments.   The result is post-sale support that's better, faster, and cheaper.

Today's American manufacturing brings more services, better value, and -most importantly- satisfied customers.  Contact ZenTech today about how domestic manufacturing can take your product around the world.

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Topics: assembly manufacturing, American based product assembly, pcb assembly manufacturer

Thinking About Contracting With An Offshore Electronic Manufacturing Company? Why You Should Reconsider...

Posted by Matthew Turpin on Tue, Nov 25, 2014 @ 07:00 AM

 circuit boardsThese days, offshoring is a pretty common thing. We buy products and receive customer service from companies that are situated on the other side of the globe. While this may be a good financial move for some businesses, though, it's not an ideal solution for everyone. Despite the fact that foreign-based electronic manufacturing companies may offer a lower cost to you, you could actually end up paying more in the long-run. Prices that seem too good to be true usually are, and such a relationship will only lead to grief in the long run. Still not convinced? Take a look at some of the many reasons why you should consider keeping the manufacture of your printed circuit boards on American soil.  

Industry Standards

One of the biggest issues surrounding a partnership with an overseas company is that they aren't necessary held to the same industry standards are we are in the United States. While we are required to comply with certain performance and safety regulations, these offshore manufacturing services may adhere to a different set of rules or even be quite lax. This can create issues of the boards produced and delivered to you don't comply and cannot be used or sold in America.   

Labor Standards

In addition to industry standards, America has certain rules and expectations with regards to how laborers are treated. On a moral level, it's important that your business never supports a company that does not treat its employees safety. Whenever you go offshore with your manufacturing processes, you run the risk that the laborers involved are being subject to unsafe conditions are are not receiving fair compensation for their work. It's smarter and safer to stick with a US company.   

Counterfeit Parts

Another major problem with foreign-based electronic manufacturing companies is that many have a tendency to utilize counterfeit parts. This helps the company to reduce its own expenses which is one of the  primary reasons why the cost to you is much lower. in the end, though, these parts could raise compliance issues, compromise the safety and integrity of your product, reduce electronics efficiency, and cause you to lose business. In extreme cases, you could even be subject to a lawsuit.   

Timeliness  Contract Electronic Assembly

In many cases, board prototypes and batch orders need to be turned around very quickly in order to stay competitive. Can you count on a foreign business to be able to complete the project and ship the product to you on time? You'll receive quicker service with American companies.

Customer Service

You can't put a price tag on quality customer service. Many Americans gripe that when patched through to representatives on foreign soil, there are language barriers that make the transaction quite difficult. If you have very specific requirements for your board layout and manufacture, you need to feel confident that those needs will be met and that you will be understood. In addition to this, if problems or questions should arrive, you should be able to easily communicate with your electronics manufacturing service.    

Fulfillment Services

Once the board has been manufactured and shipped to your location, there may come a time when you require the original design specs or even troubleshooting and repairs. Many offshore companies fail to offer these kinds of fulfillment services which can create problems. To eliminate this type of stress, seek out an American company that will take care of you post-production

Though you may initially be tempted to jump on the seemingly inexpensive services offered by an offshore electronic manufacturing company, it could end up costing you a lot of money and grief in the long run. The smartest decision that you can make for your business, your product, and your customers is to partner up with a reliable and experienced contract manufacturer that is based here in the United States. You'll get the most bang for your buck and enjoy the highest level of success. 

 

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Topics: electronic manufacturing company, American based product assembly, american electronics design services

Improving Your Business Model Through Outsourcing Manufacturing Services

Posted by Matthew Turpin on Tue, Sep 09, 2014 @ 07:00 AM

Outsourcing Manufacturing Services

In an increasingly globalized economy, it's growing more and more important for electronics companies to have the ability to reach out to new consumers by increasing capacity. At the same time, however, these businesses can't afford to add capital investment costs or lower the quality of their devices. Outsourcing companies exist primarily to fulfill this unique need. Through a strong partnership with a quality contract manufacturer, businesses can scale up, remove the more tedious and time-consuming tasks from their repertoire and put their focus on core competencies. It's because of this that so many OEMs are looking to outside help in order to prove their business models.

Why do companies hire contract manufacturers?

For the most part, electronics businesses tend to outsource elements of their operations for one or all of the following reasons:

  • Reduce Costs - From start to finish, the process of designing, manufacturing, and offering fulfillment services for PC boards is time-consuming and costly. Not only are companies required to invest the money in parts and labor, but they also must keep abreast of the latest design and assembly technologies, regularly updating and maintaining equipment. Working with a contract manufacturing company can minimize the amount of skilled labor required to actually produce the boards while also taking on the burden of purchasing and caring for machinery. This can significantly cut back on an OEM's operational costs.

  • Focus on Core Competencies - In order to stay current and to succeed, electronics companies need to be able to put their focus on what's important to their customer base, what will provide their business with a competitive edge, and where improvements can be made to increase sales while reducing costs. Unfortunately, when time is diverted away from these tasks to work on designs, revamping, prototyping, assembly, testing, and repair services, these core objectives cannot be met. Working with a contract manufacturing service can free up a company's time so that more pertinent tasks can be tended to.

  • Ensure Growth & Flexibility - The goal of any business is to eventually grow over time. A larger consumer audience means more revenue and heightened success. Many small electronics companies tend to struggle to scale up, as they don't have the means of keeping up with customer demands. Even if new buyers can be convinced to invest in their products, without the ability to quickly design and manufacture prototypes and PC boards, customer business will quickly be diverted elsewhere. Outsourcing either design or assembly processes (or both) can allow a company to satisfy their client's needs in a timely manner while still reserving the flexibility to focus their attentions elsewhere. 

Outsourcing ManufacturingGetting the Most Out of Your Contract Manufacturing Partnership

It's easy to see why many OEMs are choosing to outsource design and assembly processes, but in order for you to truly improve your business model and benefit from the partnership, there are a few things you should be looking for:

  • Experience - It's smart to contract with a service that's well-seasoned in the design and manufacture of PC boards. Look for a company that also requires a certain level of experience and knowledge from its staff.

  • Customer Satisfaction/Retention - Not only should you look into the level of satisfaction that previous customers have had with the outsource company, but you should also ask about the retention rate of clients.

  • Standards Compliance - Never work with a company that doesn't adhere to the latest industry standards for safety. 

  • Onshore vs. Offshore - Many companies are tempted to go offshore with their contract manufacturing needs, but it's important to realize that many foreign-based businesses don't follow the same standards for assembly or fair labor that we recognize in the US.

  • Fulfillment Services - You'll end up saving a lot of time and money on warranty replacements by contracting with a company that troubleshoots and repairs.

With the right partnership, you can take your electronics business to the next level faster than you ever expected. 

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Topics: manufacturing services, American based product assembly, american electronics design services

Why Look Abroad For Assembly Solutions? Reshoring Is Growing! and it brings better hardware!

Posted by Matthew Turpin on Thu, Jul 17, 2014 @ 07:00 AM

assembly manufacturingFor awhile, it looked like the entire manufacturing industry was going to move abroad for their operations. The promise of super-cheap assembly solutions in China or Vietnam or other low-cost countries lured plenty of businesses overseas. When a company could get manufacturing done for one-fourth – or less – of domestic services, it made a compelling financial argument.

Unfortunately, as usually happens, it turned out that this too-good-to-be-true arrangement was exactly that. Hidden costs of all sorts began to mount, and often, those who had gone “all in” on overseas manufacturing ultimately compounded their problems.

How Offshore Manufacturing Creates More Problems Than It Solves

Among the major issues that have faced businesses using offshore assembly:

  • Long, inflexible supply chains require months to alter, often backed with unbreakable contracts.

  • Lengthy lead times means products could be out of date before they hit the market.

  • Multiple outsourcers means multiple points of failure. If just one foreign plant fails to do its job, it can form a logjam in the entire supply and manufacturing chain.

  • “You get what you pay for.” Assembly workers making a dollar a day don't produce high-quality goods. QA in foreign plants is often abysmal.

  • Negative reporting on overseas working conditions -not to mention employee protests- cast shadows on those employing these services... Just ask Apple, or any other Foxconn client.

  • Security leaks. Issues where a foreign contractor has “accidentally” let other manufacturers see a company's schematics are unfortunately common, leading directly to knockoffs.

  • Open corruption. Without getting into moral arguments, the Asian business world simply is more tolerant of kickbacks, embezzlement, and similar matters. This can cause extreme culture shock, if a foreign business doesn't know what they're in for.

  • An increasing maze of bureaucracy that makes continued business more difficult, as more fingers find ways into your pie.

  • Cheaply-priced foreign products sold online reduce the perceived value of offshored manufactured goods. Overseas online marketplaces like Alibaba can undercut any foreign setup. 

In short, the seemingly-low up-front costs end up buried under an avalanche of hidden costs, market shifts, and the inherent corruption that goes along with Asian business dealings. Granted, this corruption can also ease bureaucratic (or legal) problems, but it doesn't get you better products or happier customers.

Why Reshore?pcb assambly

Well, the reasons to reshore are pretty obvious. See above. In fact, it's looking like an attractive prospect to more and more businesses. According to a major study last year, by the Boston Consulting Group, more than twice as many polled CEOs were interested in reshoring as compared to the previous year's poll.

1 – More Oversight

If a company is domestic, that makes it far easier to conduct surprise inspections, audits, or otherwise keep an eye on them to ensure they're adhering to the contract. The remoteness of offshore assembly solutions tends to encourage shady behavior, since any direct oversight is nearly impossible.

2 – More Legal Protections

Say what you will about “over-regulation” among US businesses... much of the time, those regulations protect businesses as much as they inconvenience. When working with a US assembly firm, you have far more legal guarantees that your IP will be protected and secure, along with any computer data used in the creation of those properties.

3 – Better Quality

“Made In America” used to mean something, and it still can. America had one of the strongest and best manufacturing bases in the world, before everyone started chasing low prices. Plenty of those manufacturers are still around, and they're just waiting for a chance to remind everyone that American-Made means American Quality, and a guarantee of a long product life.

Look To America For Manufacturing Solutions

Overseas manufacturing is quickly revealing itself to be a quagmire, sucking in too many well-intentioned businesses. Don't be one of them! Whether you're looking to reshore, or you're a new concern just starting off, ZenTech offers the best in American-made assembly solutions.

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Topics: pcb assembly, assembly solutions, American based product assembly