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Everything You Need to Know About Electronics Manufacturing Outsourcing

April 10,2021


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The electronics industry is constantly evolving and growing, which means many designers and manufacturing engineers choose to outsource their products to electronic contract manufacturing services or EMS providers.

In this article, we’ll discuss all about electronics manufacturing outsourcing.

The Benefits of Outsourcing

Many designers either choose an electronic manufacturing service provider or go with an original equipment manufacturer when introducing their product in the market.

Currently, the use of EMS providers has expanded, and most printed circuit boards are assembled and manufactured by third-party companies. The unstable economy combined with constantly striving to increase profits and impress shareholders has encouraged manufacturers to outsource in order to streamline the production process, improve flexibility, and reduce costs.

Original equipment manufacturers or OEMs outsource their tasks to an EMS provider so they can significantly decrease the overall fixed costs. This gives them more cash to invest in strategic techniques like new product development and innovative marketing ideas that bring in more revenue.

The outsourcing of electronics manufacturing also allows a company to shrink its workforce and reduce labor costs. This helps them realize better financial ratios, increase the time to market, get immediate cost savings of 10 to 15 percent and increase the number of products sold.

Moreover, if OEMs decide not to go down the electronics manufacturing outsourcing path, they might face being underpriced in the market by their competitors, which would decrease sales and result in loss. Hence, outsourcing helps lower the overhead operating costs, and the products perform better in the marketplace.

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The Role of Manufacturing Engineers in The Outsourcing Process

Manufacturing engineers think that outsourcing will allow them to downsize activity, but this is a common misconception. The internal engineering team of the OEMs must continue to play a vital part, such as becoming involved in the transition process from the start.

When the OEM program is being transferred to the EMS provider, the manufacturing engineers can help isolate any shortcomings in the EMS provider's suite of services, staff assigned to the transition process, internal engineering capabilities, etc.

The engineers are the key individuals who can correctly evaluate the electronic contract manufacturer’s ability to provide the services and the technology needed to create the product. They can assess whether the EMS providers has the right equipment for the production process and whether they will be able to support the testing requirements.

If you’re looking for a reliable EMS provider that offers electronic contract manufacturing services, get in touch with Find an EMS. We help connect OEM providers with the right EMS providers. Sign up to get our help today.

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