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 @ 06:00 PM

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: assembly electronics solution, American based SMT production

SMT Production Adds Efficiency To Any Process

Posted by Laura Austin on Tue, Dec 25, 2012 @ 07:00 AM

Why SMT?

Compact size and ability to get mounted on both sides of printed circuit boards have helped surface mounted technology (SMT) emerge as the preferred option in electronics and appliances. The SMT components occupy lesser space and a single component can perform multiple tasks. The advantages SMT has can be easily seen in both design and manufacturing. SMT production has added efficiency to many processes, which before this technology were much more difficult to carry out. 

SMT production has many benefits that have driven engineers and technicians to use this inSMT-production more and more devices. Just a few of these benefits are

  • Reduced board cost

  • The manufacturing is faster and more efficient

  • The cost of material handling is lowered

  • The board size gets reduced significantly

  • The number of holes that are to be drilled in the board are very few.

  • The components used in SMT reduce the conductor inductance and parasitic lead while adding to the resistance and capacitance.

  • The overall cost of production is lowered and the efficiency is increased

  • This new assembly technology has provided a competitive advantage to manufacturers

  • The yield by this method is higher

  • The pitch layouts are finer

  • The boards boast mixed technology with multi-layer circuitry

  • Achieving improved electrical performance seems easier that is offered due to high frequency and higher operating speed.

When To Opt For SMT In Production 

Most products in the current time are being manufactured using surface mounted technology. There has been a drastic improvement in the supplier infrastructure and skilled buyers number. But, theSMT criteria’s which best depict the use of SMT production methods are:

  • When the products to be manufactured are small in size

  • When the products can accommodate large amounts of memory

  • When final product needs to be sleek and light

  • When a product must function at high speed and frequencies

  • When the production is for large quantities and uses automated technology

  • When a product must transmit very little or no noise

  • When product can accommodate many large, high lead count complex ICs

SMT production: Myth Vs reality

SMT is an important method to improve the efficiency of many processes. The success of the process using SMT is based on both machines and human involvement. The operator for example must be familiar with the equipment that can help in enhancing product efficiency. Undertaking regular inspections and maintenance is vital to ensure full efficacy. Most companies think that the task is very arduous and thus prefer keeping away from SMT. But, if handled by a team of experienced professionals, benefits this can unveil in the long run are great to enjoy efficiency and cost effectiveness.

LED component assembly benefits from SMT production

LED technology has recently seen a rapid growth and has offered manufacturing and electronics industry a viable option. LEDs have overtaken the conventional bulbs almost completely and the greatest benefits associated are the smaller size and lower power consumption. The SMT production method helps in placing multiple components on the circuit boards at one time, which has led to a significant increase in the production rate while decreasing the labour cost thus adding efficiency to LED component manufacturing. Also, this is a “green technology”. SMT industries are now improving to become part of the LEDsurface mounted technology component assembly industry, to enjoy mutual advantage, as the potential applications for both LED and SMT are endless.

Future of SMT

SMT is evolving and all the components needed to carry out SMT production are evolving as well.. New components and technology is being developed, but the future seems very bright and has great potential.

Zentech offers a range of manufacturing solutions to clients while specializing in complex processes that require high reliability. The Company has a team of professionals who are well versed about the latest methods of production including SMT. 

The higher technical competency and ease of business that Zentech offers, has helped it emerge as a leader in the USA.

Topics: smt production, surface mount technology, smt manufacturing, surface mounted technology, American based SMT production