An electronics supplier says that the practice of working with Contract Electronic Manufacturing (CEM) or Electronic Manufacturing Service (EMS) providers is evolving to offer OEMS greater opportunities than ever before.
Steve Marshall, managing director of Offshore Electronics, said: “The CEM and EMS sector is evolving alongside shifts in technology and the growing demand for electronics products.”
As well as the typical advantages of time and cost savings, outsourcing now sees providers offering firms of all sizes a much broader range of services including access to specialist technical design expertise, prototyping and testing and validation.
“Collectively, the benefits of outsourcing are helping product manufacturers to enhance efficiency and drive down the cost of production dramatically,” added Mr Marshall.
As a consequence of these benefits, more firms are turning to outsourcing to enhance profitability and EMS demand is surging.
Offshore Electronics has demonstrated the benefits of CEM and EMS when the microchip scanner manufacturer Pet Technology Store had a sudden influx in orders. It helped the OEM fulfil orders quickly and efficiently and the two firms have since produced tens of thousands of units together.
CEM firms are also helping OEMs to improve design concepts.
Offshore Electronics recently shared its engineering expertise through its New Product Introduction (NPI) service to overhaul an existing control panel on a best-selling device to introduce considerable time and cost savings.
Even though the benefits are there, there is still some ambivalence towards the business model in some quarters.
Mr Marshall said that the biggest worry for most OEMs when considering sub-contracting is typically associated with losing their intellectual property (IP) and having design concepts stolen.
Another fear among OEMs is that they may not know where the components of its PCBs are coming from when they outsource.
Mr Marshall said that ultimately, the key to making outsourcing work lies in the relationship between the OEM and EMS provider. Success often lies in viewing the working model as a partnership rather than just a supplier to customer relationship from the onset.