Deciding to outsource responsibility for your entire assembly operation to an EMS partner relies on having a comprehensive plan in place.
And much will depend on how much of your shop floor you intend to transfer. Outsourcing PCBA assembly, for example, is a well proven approach and may seem like a low risk strategy. However, even this can introduce complexities, which, if not planned for, can catch you out.
In some respects, the transfer of physical resources can be simplified by choosing to outsource your entire manufacturing operation as you draw a clear divide between the OEM and the EMS, with your assembly partner taking full responsibility for all elements.
However, while clarity and ownership are achieved, complete outsourcing strategies require greater planning and execution.
So here are some points to consider:
Skills and expertise
Key elements of the knowledge and expertise required to build and test each of your products often resides in the heads of your people. Knowledge is one of the most important resources you have and, while arguably one of the most difficult to transfer, it’s vital that this be implanted into the new supplier.
Often too, while your assembly documentation may contain build instructions and assembly diagrams etc, the shop floor staff building the products will have evolved processes which may not necessarily have been reflected on paper. This local knowledge can be vital to achieving the required build times and product quality so it needs to be captured and incorporated into your EMS company’s manufacturing documentation.
It’s possible too that your existing staff may need to be re-trained in other areas of your business. Learning new skills may feel daunting, and particularly if they have worked on a particular process or product for many years. On the other hand, some staff may welcome the change and see it as a great opportunity to develop themselves further.
If existing staff cannot be re-deployed within the business then unfortunately you may be faced with a redundancy or, in some instances, a TUPE situation as discussed in Chapter 3. It’s therefore important that your HR team are involved from the outset. The business case for the decision should be made clear to all employees - and compassion provided to those involved in the process at every stage.
Plant and Equipment
When it comes to your existing plant and equipment, you’ll need to decide piece-by-piece if it makes sense to dispose of it all together, to sell it on or look to transfer it across to your EMS.
If you are looking to subcontract your complete PCBA processes and your EMS already has the assembly equipment they need, then it probably makes sense for you to look to sell yours.
However before you start looking to third party suppliers that trade in second hand equipment, it’s worth going back to the original manufacturer of the equipment. Quite often they are interested in taking back their own branded machinery, as it gives them the opportunity to refurbish it and then sell it back into the marketplace with associated maintenance contracts and warranty agreements.
If you plan on retaining some parts of the build in-house - for example, final assembly - or are looking to phase in the supply of additional products within your range over time, then you may need to keep hold of some equipment, until the transfer is complete.
One area that often catches OEMs out is bespoke test equipment, which has been calibrated and runs a specific software variant. If you are looking for the EMS company to test your product but plan to retain other products that share the same test in-house, if you only have one set of equipment, a second set will need commissioning.
One of the benefits of outsourcing is the reduction in raw material stock holding. However, if not planned correctly, it can leave OEMs with a warehouse full of redundant stock.
Talk through the options available to you with your EMS. Most will be happy to transfer key items, providing they have been stored in accordance with manufacturer’s guidelines, are the correct revision (including bare PCBs, programmable items) and remain cost neutral - i.e. the unit cost they pay from you is the same as the price they would pay new through the supply chain.
There may be some items though (such as fasteners or generic resistors/capacitors) - that are simply not worth transferring over and are better off being disposed of early on.
Some OEMs get caught out by their existing supply chain tail. Long-term forecasts and scheduled orders, along with buffer stock agreements, all need managing, to avoid future deliveries turning up long after production has been transferred across.
While your EMS will be happy to review your supply agreements at the start of the project, they may not be as keen to do so once their own supply chain has been established.
If your expectations are that your EMS will take over your supply chain completely, we recommend drawing up a deed of novation. This will document the terms of transferring your contractual obligations so that all three parties - you, your outsourcing partner and the material supplier - are aligned when it comes to new commitments and responsibilities.
To help ensure the physical elements of your assembly line are transferred appropriately it is suggested they are built into your project plan; with clear owners and timescales assigned. Once all areas are included you will find that some can happen straight away while others will be dependent on a number of previous actions taking place.
Be prepared for your project plan to evolve – it’s only natural that it will. However, the most important thing is you have one. Those responsible for completing specific actions also need to make sure they have the resources they need in place, with any potential gaps discussed and resolved. This should be done well in advance of any manufacturing moving over to the new EMS partner.
Box build is probably the most misunderstood term in electronics manufacturing, covering everything from putting a PCBA in a simple enclosure and connecting it to a user interface and display, to producing a complete machine with tens of thousands of parts and hundreds of sub assemblies.
The potential issues your EMS partner may come up against will vary, depending on the complexity of your product.
When it comes to sourcing an enclosure for example, there are essentially two options - an off-the-shelf version or something more bespoke.
If your assembly partner goes down the first route, there are plenty of vendors to choose from, with generic enclosures available in a wide variety of materials and finishes. Off-the-shelf enclosures can also offer the advantage of lower unit price, reduced minimum order quantities and increased availability.
A ready-made enclosure however won’t have been designed for your specific purposes. So it’s crucial to choose a model into which your PCB or PCBs can fit securely and to ensure that any additional electronics (displays, connecting cables, fans, LEDs, etc.) won’t become trapped when the front and back halves are joined.
Another factor to consider is whether the design will allow you to carry out routine maintenance. The last thing you want is for a product to be rendered obsolete because it’s too difficult to carry out service repairs, for example.
As a result, the assembled box build should be tested out in the field to ensure it can withstand ‘real world’ conditions that it will be placed under during its lifetime.
Choosing to use a bespoke enclosure means many of the issues outlined above will not be relevant, as it will have been designed to meet your specific needs. Your PCB or PCBs will slot easily into place, and there will be sufficient space for other internals, to avoid items becoming crushed or putting pressure on one another.
Similarly, the enclosure will have been created with the right attributes for the environment into which it will be placed.
However, there are still a number of potential problems. For one, a bespoke enclosure is likely to be expensive, often requiring several thousands of pounds in upfront tooling. And, once you have ordered one from a supplier, you need to be able to ensure that it will continue to be available so that you can ensure your customers get high-quality products within their specified timeframes.
Designing a box build with procurement in mind will help ensure that the components you require remain available throughout the lifetime of your product.
It’s also vital to create a complete set of drawings for the enclosure, with acceptable tolerance levels and clear guidelines when it comes to quality standards, to avoid ambiguity at the goods receipt and build stage.
Poor documentation and lack of data control could cause delays in manufacturing your box build and result in an incorrect or inferior product. So while it’s easy to let paperwork fall to the wayside, it should remain a priority.
BoMs, CAD drawings, Gerber files, software and any other key pieces of data need to be revision controlled and managed correctly. Any amendments that do take place during the build should be controlled through a stringent engineering change note (ECN) process.
Any drawn items, such as bespoke labels, enclosures or metalwork, should have tolerances and finishes clearly specified. Leaving these things open to interpretation can cause problems with assembly or quality control later.
It’s far easier to identify problems with a clear trail to look back on – and it will save valuable time and money in the process.