In this example, we focus on an OEM who designs and sells portable test equipment, which is sold into the industrial automation sector.

Each unit is configured-to-order (CTO) and, due to the licensing agreements they have in place with end users, the OEM offers a 10-day repair service against each unit they sell, rather than replacing the units with a new one.

In a small number of cases - for instance, when a unit is deemed beyond economical repair (BER) - a new unit is offered.

This can be a complex process to manage due to the way in which the software loaded onto the units is configured differently to each end user.

To meet the requested turnaround time, we needed to implement a robust, yet agile, process for receiving, assessing and repairing incoming units.

To begin with, a 'fast track' system was introduced, which meant incoming units from the OEM were sent directly to a dedicated repair line rather than being handled by our main logistics team.

The repair team were then made responsible for recording the dates and times of incoming deliveries and carrying out an initial assessment to determine the level of repair required.

The next stage involved setting up a line-side store for all the key items needed to repair the units, like outer metal enclosures, touchscreen displays and keypads. These were all replenished via a Kanban system. In addition to raw material, stock-agreed levels of PCBAs and “embryo” units were also held next to the repair line. 

This allowed us to respond quickly to every eventuality – from a unit with a cracked display, through to one that was BER and would need to be replaced with a new unit.

Having separate stocks of PCBAs and “embryo units” dedicated to the repair line also meant that standard production orders would never be jeopardised.

Details of the current and future stock liabilities, delivery performance and repair trend analysis are reviewed on a quarterly basis as part of a more general business overview. Clearly, this level of support and stock level commitment requires a great deal of trust in the first place and then close monitoring by both parties on an on-going basis.

This allowed us to respond quickly to every eventuality – from a unit with a cracked display, through to one that was BER and would need to be replaced with a new unit.

In this particular example, the OEM takes responsibility for shipping the repaired units out to their end user. They have chosen to retain this function due to the commercial agreements they have in place with their customers. A large proportion of the units they receive back don’t actually have any manufacturing or design-related issues associated with them – they have been damaged out in the field. By receiving the repaired units from us first, the OEM’s customer service team can determine if any repair or rework costs should be passed on.

Outsourcing - A collection of EMS case studies from JJS Manufacturing

Outsourcing to an electronics manufacturing services (EMS) provider is an excellent way for an original equipment manufacturer (OEM) to free up more time to focus on designing, marketing and selling their products.

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