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26 Aug, 2021 / BY Neil Sharp

Being held hostage by your electronics manufacturer?

Man behind bars

You have a great idea for an innovative new product that will put your company on the map - the only problem is you don't have any design or manufacturing capability.

So what do you do? 

Having searched the web and found an Electronics Manufacturing Services (EMS) provider willing to help straight away, they quickly turn your idea into reality. And after the prototypes have been built and volume production begins, it starts to sell really well. Things are going great and you've not even had to worry about the 'boring' bits like part lists, technical drawings, wiring diagrams, test specifications etc - the supplier has offered to take all that hassle away too.

But what happens if you need someone else to make your product in the future? What if your original partner starts to struggle with an increase in demand and you need to find a second source? Surely it's just a case of finding another assembly partner who can jump straight in and start producing in the same way, isn't it? 

Many Original Equipment Manufacturers (OEMs) know this reality all too well. You decided to outsource the design and manufacture to an Electronics Manufacturing Services (EMS) provider. Outsourcing can, at first, seem like a panacea, but business conditions change, not to mention geopolitical events such as Brexit and the Ever Given becoming stuck in the Suez Canal that have the power to force OEMs to change manufacturers. 

If there is a transparent relationship built on trust from the outset, there shouldn't be an issue. But the problem arises when the OEM does not have full ownership of the product design or the data needed to build it. In this situation, the OEM can find themselves effectively being held hostage by the EMS with limited options for the future. 

Being held hostage by my EMS: a fictional (but common) story

Imagine a company called coffee.com that sells coffee machines produced by MPB Manufacturing Services. Unfortunately, coffee.com has suffered over the past few years, the result of challenges stemming from COVID-19 and continued concerns relating to the still-ongoing Brexit saga. This has provoked interest in either reshoring manufacturing or diversifying their manufacturing partners to safeguard supply chains against an uncertain future.

But the problem is that while coffee.com came up with the initial idea for their product and the features that set it apart from fierce competition, they have no idea how it is made or what components are actually needed to make it. During the early stages of the relationship, coffee.com didn't stop to think about asking MPB for any of the technical data. MPB just 'made things happen' and placing the product on the market was the number one focus for both parties. 

Approaching MPB now, several years down the line, and asking for the technical build data and test procedures is likely to raise suspicion. And if MPB suspected they were about to lose the business to another provider, coffee.com could see a drop in customer service or worse still, a gap in product supply, which they rely upon now more than ever.

Without all the build and test data, they had very few options. So, what did they do?

Armed with minimal data, coffee.com approached another EMS provider and enquired about options. The EMS provider was clear with them from the start and suggested that with minimal data the only real option would be to reverse engineer the product using a 'golden' sample. This was likely to result in a costly and time-consuming exercise but coffee.com, unfortunately, had limited choices and needed to make a decision. 

Although this ended up costing coffee.com in both time and money, they learnt a valuable lesson. They learnt that all the 'boring' bits surrounding design and manufacturing like access to part lists, drawings and test specifications were just as important as the 'exciting' elements surrounding a new product launch. And that having access to this data now, gave them back control of their Intellectual Property, the product and therefore destiny, in future years to come. 

What data do you need to change EMS?

The data you need to change away from your EMS is fundamentally the same data you need when you engage an EMS for the first time. Approaching an EMS with an electro-mechanical build pack is the quickest and best way for them to obtain a precise understanding of the product and a clear picture of how to proceed. 

Bill of Materials (BOM)

  • References all the materials required to assemble the product
  • Includes a description of the parts
  • Includes circuit references and item numbers against each part to show exactly where the items should be fitted

Wiring Schematic

This should ideally be in CAD format and should contain, at a minimum, details of cable size, colour, and identification numbers, along with details about where terminations are expected to be made.

Wiring Schedule

Wiring is a specialist skill, so unless you’re specific, the wireman will use their experience and judgement to complete the job which could impact the amount of cabling required and, therefore, costs. You need to provide details about:

  • How the terminations within your assembly should be made?
  • Do you need them soldered or crimped?
  • How do you want to route the cabling within the machine itself or the control cabinet? 

Assembly drawing

Assembly drawings help your EMS visualise how to fit together all of the items in the BOM. All these drawings should reference the associated item numbers and show the scale that they represent. It might be necessary for there to be multiple drawings for each level of a complex assembly. And all levels should be revision controlled and any Engineering Change Notes (ECN) should be present on the drawings, too.

Manufactured parts drawings

Items such as enclosures, front panels, overlays, machined and fabricated parts are produced in much lower volumes and, as such, will be subject to greater variance during the manufacturing process. When producing drawings for these items you should clearly specify the required material type and finish, along with dimensions and allowed tolerances. Drawings should clearly define the scale and, of course, be revision controlled so that future changes can be tracked.

Test

And don't forget about test! In addition to having access to the physical test equipment needed to verify that your product functions as it should do, you'll need to understand the process steps taken. Testing of products is a hugely complicated topic and varies widely dependant on the product and markets sold into. Unfortunately, there is no 'one size fits all' approach when it comes to testing complex electronic products or electro-mechanical machines so for a better understanding of your options, we created this Definitive Guide to Test eBook.

How to choose a different EMS

Changing your manufacturing partner should be a serious but positive decision in your business’ journey. First, you should identify exactly what it is you are not happy about with your current EMS. Then, write a detailed list of criteria that are important for your company. Ultimately, through changing EMS, your goals should be to achieve:

  • Higher productivity
  • Increased speed and operational efficiency
  • A more secure supply chain
  • A better end product
  • Improved Time To Market

Questions you should ask yourself

How much of our assembly, test, and logistics should we outsource? The more you outsource, the more time you will have freed up to focus on R&D, marketing, and sales. Why not look for an EMS that can offer you an end-to-end solution that will allow you to focus on growing your business.

What sector experience do you need your partner to have? Significant industry expertise is likely to be essential to obtain the results you want for your business. Make a list of the manufacturing partners that have specific experience in your field.

Where do I want my manufacturing partner to be located? There are benefits of having manufacturers far away overseas, within the same continent, and locally in the UK. The location you decide upon depends on the needs of your business, where your customers are based and the geopolitical conditions of the time. Ultimately, it is about working out what works for your business. 

Benefits of reshoring your EMS

There are huge complexities involved in transferring your manufacturer to a different location. However, the pandemic, as well as other recent events, has highlighted how susceptible globalised manufacturing is to external shocks. This has led OEMs to scrutinise possibilities in the UK.

One of the main benefits includes bringing the top and bottom of the supply chain together. OEMs considering this move to relocate their supply base could take advantage of the innovation, technology, quality, and ease of access that is available in the UK.

Conclusion

Breaking any kind of relationship is complex but sometimes necessary. Many OMS have realised the hard way that they are not in control of their own data, and are therefore effectively being held hostage by their EMS. 

The secret to a great partnership is asking the right questions upfront and finding the EMS that values your work and that you can trust. Any long-term relationship is hard work but find the right EMS and you will be able to grow and develop together.

An Introduction to Outsourcing Your Electronics Manufacturing

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