Contract Electronics Manufacturing and PCB Assembly Blog

Challenges Facing Offshore Assembly Electronic Services

Posted by Matthew Turpin on Tue, Mar 24, 2015 @ 06:00 AM

pcb-contractors1With China possibly overtaking the US to become the largest economy in the world, many are taking this as confirmation that offshore electronics assembly will continue to be a major driving force.  And while it's true China remains a strong player in electronics services, there's a lot more to the picture than that.

Even if the claims are true, being biggest doesn't necessarily mean best.  The rush of manufacturers to move their services to China has helped create this new boom, but it's simultaneously created a number of new challenges for offshore assembly.

A company looking overseas for their electronics might be wise to consider changes in the economic landscape that have come about in the last few years.

New Issues Developing In Offshore Chinese Electronics Assembly

1 - Higher Wages = Higher Cost Of Doing Business

The first and arguably most important change was also one of the most predictable.  The Chinese cost of living is going up, and quickly.  That influx of money and jobs is creating an entirely new middle class, and even rural incomes are going up quickly.

In fact, at this point, many sources are reporting that Chinese and American manufacturing is nearly at parity in terms of costs.  That, by itself, deals a big blow to those who still advocate offshore manufacturing.

2 - Bad Publicity

Twenty years ago, people rarely cared about conditions in overseas factories unless they were targeting Wal-Mart.  Today, major overseas manufacturers like FoxConn are routinely making headlines for their workplace policies, with multiple protests and even suicides being heard about globally.

A globally-informed public is beginning to demand higher standards from the companies they do business with.  There's growing backlash against the conditions common to factories like FoxConn's, and there's absolutely no reason to think the tide is going to recede any time soon.

Companies that divest themselves from cut-rate overseas factories are gaining significant boosts to their PR.

3 - Counterfeit PartsPCB-Services

We've talked for years about the problems with counterfeit parts getting into supply lines and, if anything, the problem is only getting worse.  A study by ECN Magazine showed that forty-six percent of engineers had problems with counterfeits.  Worse, a third of those didn't find out about the substitution until the product was already under production. 

Not to mention, of course, those are only the engineers who noticed the counterfeits.  The true number is undoubtedly higher.  On top of that, sixty-six percent reported only using authorized suppliers... so even some authorized sources are compromised.

The only real way to get around counterfeits is by using end-to-end item tracking, and not many offshore companies do.  Plus, the more hands -and countries- the supply lines pass through, the more chance of substitutions happening.

Local-sourcing of components, backed with per-item tracking, is the best insurance here.

4 - Flagging Asset Investment

Finally, China is currently having trouble with fewer investments into the factories themselves.  Those assembly lines which were state-of-the-art ten years ago are already behind the times.  Aside from a few of the largest players (like FoxConn) many Chinese sources aren't keeping up with the latest in assembly methods.

If this trend continues, it will be increasingly difficult to manufacture products overseas that meet the global demand for cutting-edge hardware.

At this point, companies looking overseas might want to look closer to home instead.  Locally-sourced and manufactured products seem increasingly attractive.

Want to know more?  Contact ZenTech today for a free consultation on your electronics needs!

Electronic Interconnect Cabling Whitepaper from Zentech

Topics: assembly electronic, off-shore manufacturing services

Contract Electronics Manufacturing: Providing You Phenomenal Service

Posted by Adam Washburn on Tue, Jul 09, 2013 @ 07:00 AM

As technology continues to evolve, so do the needs of your customers. Today's consumer market has higher expectations for electronic devices than ever before, demanding smaller, lighter, faster products for lower costs. Although some of the biggest electronics design and manufacturing companies may have the capitol and manpower to keep up with these customer needs, it may not be so easy for small to medium sized operations to do so. Fortunately, you don't have to throw in the towel and give up. Contract electronics manufacturing services help to level the playing field by offering phenomenal services at a reasonable price point that enables your business to grow and thrive. So what is it that makes a partnership with a contracted manufacturer such a wise investment? Here are three things that you can expect from your contract electronics manufacturing service:electronics manufacturing services

1. Consultation Services 

Regardless of where you are at in the design process, a professional contract electronics manufacturing service can provide valuable consultation services. Perhaps your company would prefer to keep designing and engineering in-house, while outsourcing only the production of your devices. It's still wise for you to keep the lines of communication open between yourself and your manufacturer. An expert outsource company will employ those who are highly knowledgable and who may be able to spot design flaws, inconsistencies, or areas that could be improve in order to maximize efficiency and customer satisfaction. By allowing your electronics manufacturing service to review your design schematics before production, they may be able to send the plans back to you for improvements that could end up saving your company a lot of money. On the flip side of things, a contract electronics manufacturing business can also be more "hands-on" throughout the design process. With highly complex electronics, you may need the help of your partner company to solve problems, or to design the device from scratch.

2. Advanced Manufacturing Technologies

With every year that passes, electronics are growing smaller and more complex, making them more difficult to manufacture. If your smaller electronics business is utilizing dated machinery or is putting devices together by hand, you could be struggling to keep up with marketing demands. In fact, these older processes could be costing you a lot of money, as so much time and labor is required, and more mistakes are likely to be made. Unfortunately, the purchase of newer machinery to constantly keep up with evolving technologies can be impossible for "underdog" companies. This is where contract electronics manufacturing services can help. By working with these types of companies, you can take advantage of the latest and greatest machinery, product assembly services, and robotics without having to purchase the equipment yourself. In this way, your products will be manufactured quicker and more precisely than ever before.

3. Quality Controlcontract electronics manufacturing

Of course, no product should ever hit the shelves or be available to consumers until after it has been carefully tested for quality. When you select an American-based and highly qualified contract electronics manufacturing service, you can rest assured that your devices will be checked for functionality and total precision. In addition to this, you will know that you can be proud of the devices that you are putting out in the world because your manufacturer will only utilize high quality parts for safety and operability. 

Remember: You Get What You Pay For

If you're hoping to receive these three excellent services from your contract electronics manufacturing company, you must take care to invest your money wisely. Often, off-shore manufacturing services are very low cost, but that doesn't guarantee quality at all. Many of these companies are able to keep their price points low because they use boot-legged parts and shoddy craftsmanship. Selecting an American company with years of experience may initially cost a bit more, but customer satisfaction and the improvements to your sales revenue will pay you back in the long run.

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Image #1 sourced from (anuvamfg.com)

Image #2 sourced frmo (globalsources.com)

Topics: electronics manufacturing company, contract electronics manufacturing, off-shore manufacturing services