3. Site visits
Once you’ve determined your shortlist we strongly recommend you arrange site visits before sending your Request for Quotation (RFQ).
While a site visit is not a full site audit, it’s an opportunity to gain a crucial first impression of the company, its culture, people and capabilities.
Again, it’s important to trust in your intuition, so ask yourself:
- Do you think you can work with this company?
- Can you see yourself working with its management team?
- Do they pass the ‘weeds in the car park’ test?
- Can you visualise your product being manufactured on the site?
Whilst the boardroom, sales pitch and company presentations help build up first impressions, you really need to see the part of the factory that will build your products, so you should make a point of looking around their manufacturing facility.
And if they offer multiple manufacturing sites - for example one in the UK, one in Eastern Europe - it may be important to you to visit both factories.
Be sure to quiz them about their capabilities as you walk around. Ideally you will want to see examples of their skills in action.
Check too that the members of the team you are talking to now are empowered to make change later. If you do decide to award your business to them, you need to know they can implement your project plans straight away.
In tandem with the site visit, you should also source your own references and carry out financial checks on your potential provider.
4. Structuring an RFQ
The size and complexity of the RFQ document means your project team would be advised to start developing the RFQ at the very beginning of the project.
From a commercial perspective you should provide the suppliers with the estimated annual usage figures for the products you require quoting, as well as indicating what quantities you would typically order product in and the frequency between each order.
Any confusion with the initial sets of figures could result in inaccurate unit prices. So you’ll want to provide some kind of indicative pricing to the EMS Company, and particularly if your product contains a number of drawn items or designed registered electronic components with supported pricing.
Drawn items, such as metal front panels or plastic enclosures for example, are likely to have additional tooling charges applied to them through alternative supply routes. If you have already spent time establishing a quality source of supply and paid the initial set up charges, it makes sense for the EMS Company to continue to use that supplier in the short term.
You don’t need to be exact here, perhaps just give a price range to be within, but by doing so you can ensure that any obvious pricing issues are highlighted early on in the process.
From a technical perspective you will be required to deliver a large amount of data to your prospective EMS partner. As a minimum they will need the Bill of Materials (BOM), drawings for parts, production build packs and manufacturing/test data.
If a PCBA is required then you will also need to supply Gerber information and ideally CAD data too.
Expect a good EMS partner to question you vigorously on your data – it’s in their interests (and yours) to get things right first time.
In essence, you are opening up your business to a number of third party suppliers for the very first time so you may have to accept that there are omissions in the data you provide or areas that require further clarification.
Whilst it’s natural to feel uneasy, you can feel reassured that your EMS partner is there to deliver the best results for you and for your customers.
5. Auditing your potential EMS partners
While your shortlisted candidates are working on answering the RFQ, you should arrange to audit their operations.
Talk to the key people who will ultimately oversee the manufacture of your product including the Production or Operations Manager, Quality Manager and an Account Manager who will become your single point of contact.
Ask them to explain how they will manage specific elements of your manufacturing such as planning, demand fluctuations or perhaps engineering changes. As they talk, you should be able to visualise them carrying out every step of the process seamlessly.
If anything is unclear, this is your chance to ask questions.
You should also arrange to carry out a quality audit of your potential partner’s processes and procedures. If there is no visible structure in place and the company struggles to demonstrate basic controls such as the management of build data throughout its organisation, then alarm bells should be ringing.
If there’s a possibility that in the future you will want to make a design change to your product then you need to be confident the data and request will be managed efficiently. Perhaps your sales are seasonal or you expect a ramp up in production? If you haven’t got confidence that your potential supplier can cope with spikes in activity, maybe they need to be removed from your shortlist now?
You may also want to know how your potential supplier handles power, waste and logistics. If you’re outsourcing to China, for example, power could be a major consideration as factories in China suffer power outages on a regular basis.
Or it may be the case that your company prides itself on its green credentials. If environmental responsibility is core to your ethos, you will want to ask your potential supplier detailed questions about its waste disposal practices.
When you’re walking around the supplier’s plant pay close attention to the employees. Ultimately, these will be the people responsible for manufacturing your product.
If the workforce is rapidly ageing or about to retire, this might be a cause for concern. Likewise, if there is a high turnover of employees, you don’t want to be working with a supplier that is constantly having to train its workers in order to make your product.
Ideally, you should send out T&Cs to your favoured candidates during this phase. If you are aware that your company have particularly onerous T&Cs, then the sooner you send these out the better.
Once you’ve completed your site audits and received all of the information back from the RFQs, it’s time to reconvene the team to discuss the merits of each candidate before making a final decision.