Meeting your CEM shouldn’t be a blind date

When charged with finding a CEM to build your companys products, its all too easy to phone-around and ask the obvious questions about placement capabilities, lead times, batch sizes and RoHS compliance. Answers to the obvious questions should be similar across the board, so selecting a CEM using this process is little more than picking a contestant from a list. So, lets take all the usual CEM capabilities as given, and talk about de-risking outsourcing and identifying a true value-added manufacturing partner. Youll want to outsource for one of two fundamental reasons: you either wish to outsource the manufacture of a known product (cost-reduced replacement or back-up supplier) or its a new design.

In case of the former you can jump right in with the financials. Whats the CEMs size? Whats its turnover? Based on your required volumes, what percentage of its business would your work represent? As a tip, aim for greater than 15 per cent but less than 50 per cent. Make sure your work is important, but not a lifeline.

Year-on-year cost-down

Now, because its a known product and youve got examples, youre not likely to need any hand-holding, so you can push the CEM for a competitive price. However, think long-term. Can the CEM provide year-on-year cost-down? For example, if youre making products for the automotive sector its likely that your customers will be asking for annual reductions of up to five per cent. So, unless you want to see your profits shrink each year, youre suppliers must offer similar cost-downs if they want your long-term business.

As for outsourcing the manufacture of a new product, hand-holding will be important. Here, youre looking for a partner who can respond to your changing needs. So, what design for manufacture (DFM) experience does the CEM have? Can it help with design for test (DFT): for example, advise on boundary scan?
Once satisfied, move on to the probing questions listed earlier. Theres no point identifying the most helpful CEM if theyve got financial difficulties or would relegate your jobs in favour of bigger customers.

A usual sign of quality is, naturally, ISO 9001:2000 accreditation. Its probably the obvious question to ask. However, dont just tick the box. If the company is ISO accredited, ask to see its Audit Reports. A CEMs willingness to show you these will be testimony to: how serious they are about quality and how keen they are to work with you.

Countries and sectors

However, ISOs not the end game. For example, products for the European automotive sector will need to be built to TS16949. So make sure you understand which standards your products require for different countries and sectors. Not forgetting CE marking.
Identifying quality is more than seeking a stamp of approval. Quality should be prevalent in everything the CEM does, starting with the written proposal against your request for quote (RFQ).
> Has the CEM structured the pricing?
> Are details of set-up costs and run times available?
> Are there any declared allowances for yield?
> Do they claim a full recovery rate?
> Are you supplying the components or are they?
> Can they purchase on your behalf?
> Have they explained the implications of minimum order quantities?
> How do they manage component obsolescence? For example, it might be acceptable to re-source a 1k resistor without notification but re-source a precision op amp without an alert would be unacceptable

Lastly, quality is controlled and assured by employees, so what about the staff? What is the CEMs staff turnover? Whats the CEMs strategy on training? What is its attitude towards Investors in People? As with all relationships, get to know your prospective partner before making any commitments.