Contract electronics manufacturing: right now?

SMS Electronics sales and marketing director, Chris Hunt, poses a simple question, is now the right time to consider contract electronics manufacturing?

It seems the case for contract electronics manufacturing has been clear for some time to some companies, while others have failed to come to terms with the concept of outsourcing their production requirements along with after sales and support services. As we enter a difficult period of uncertainty with unknown business levels, it could be that those who have made the transition are better placed to benefit from the decision to outsource.

In the current climate companies will seek to reduce their costs, which will bring pressure on their purchasing departments to look for the lowest price material suppliers. However, this may be set against a background of falling volumes. The more likely route to obtain savings is to look at outsourcing.

Choosing the right outsourcing partner will give companies access to a full range of services from rapid prototypes to turnkey production coupled with product lifecycle support. The benefit comes from having access to these facilities but in an activity based cost model where you only pay for what you need, coupled to the material buying power of an established CEM.

Some companies may think the only way forward is to go straight to low cost offshore manufacturing but price should not be considered in isolation: it should be the true cost and value of the services supplied. Offshore manufacturing may give a low unit cost if you have high volumes and long guarantied production runs but what happens if you need more than that? Many companies have run into the often unexpected costs associated with offshore manufacturing such as time shift, language, distance, travel costs, shipment and trading terms to name but a few, and are now looking closer to home for their requirements.

SMS Electronics believes companies would now prefer a UK supplier who offers a high level of service, capability and flexibility, allied with fast turnaround and competitive pricing. Consider if an offshore supplier can offer the range of services that are available in the UK coupled with the flexibility required in todays marketplace.

As a major UK CEM, SMS Electronics offers a full range of services starting with fast machine built prototypes produced on a dedicated prototype line, offering design-for-manufacture and design-for-test assistance at an early stage. Materials are a critical factor in both time to market and cost, we can offer global purchasing experience and capability with established supply chains. Capability includes placing a wide range of components from 01005 to 85mm2 and odd shaped components up to 125mm long, plus production capacity of up to five million component placements per day. SMS offers an extensive test capability through to turnkey final product assembly with the ability to ship direct to end users regardless of the packaging and format. This, coupled to full lifecycle support through SMS Product Services, covers repairs, product upgrades, refurbishment and second user equipment to help companies extend their revenue stream along with spares management, field service support and end-of-life disposal inline with WEEE legislation.

So is now the right time to consider contract electronics manufacturing? It offers many advantages, isnt it time to put it to the test?