Outsourcing is a common practice among electronics companies, and many of them would perish without this option. One of the things that they hand over to contract manufacturers is PCB fabrication. Outsourcing offers many benefits, but there are also challenges that electronic companies must consider. PCB manufacturing specialists at www.pcbnet.com will run through the common outsourcing risks and the steps you can take to deal with them.
Choosing the Wrong PCB Partner
Having the wrong PCB manufacturer is the cause of many problems of outsourcing. Before you choose a PCB assembly partner, you need to have a clear understanding of the right selection criteria. Do not overlook key inputs such as technical capabilities, quality assurance, financial health, strategic fit, and management capabilities. Make sure that you discuss them early on during the evaluation process.
Before starting a PCB project with a contract manufacturer, envision your whole idea of a successful PCB partnership. Outsourcing is not a usual buy- and-sell agreement, so you need to manage it strategically. In your selection process, consider factors such as technical expertise, brand name reputation, size, and financial strength.
Moreover, before deciding, take some time to create a clear list of selection criteria and consider many factors when evaluating your options. Come up with a distinct plan and follow a systematic process.
Using a Technique Known as “Quote-and-Go”
When an electronic company communicates with a PCB service provider, their initial formal exchange involves a request for quotation. The electronics company usually provides their product specifications through email, and then the PCB contract manufacturer goes through their quotation process and sends back a price quote to the electronics company. There are potential issues with this process.
•Component pricing might be vague – the electronic company might not have a clear understanding of the expectations of the price quote for the PCB fabrication.
•No visibility of product pricing structure – some PCB service companies hesitate to provide a precise breakdown of costs that specify the material cost, manufacturing overhead, labor, test, etc.
•No consideration to non-price issues – aside from acquisition price, there are many other factors that could increase or lower your cost depending on the structure of your agreement with the PCB service company. Examples of this are the scope of the warranty of the PCB outsourcing company and how long the products are covered.
Ineffective Change Management Process
It may be a complex challenge for a company to manage change because it may require careful coordination. When outsourcing, the difficulty considerably increases as electronic companies and outsourcing partners adhere to different, yet connected business procedures and use different information systems.
New manufacturing process guidelines and continuous design revisions both need the PCB assembly company to react and stop the previously made operation plans. It requires the company to determine how the change affects their tasks and evaluate the scope of the change.
Poor change management can also affect the PCB project financially. You may have too many wrong electronic parts, which may lead to potential revenue loss, shipment delays, or defective products delivered to customers. To manage change:
•Make sure that a full product record is distributed to everyone involved in the change.
•Document a strong set of rules regarding “change management.”
•Before implementing any changes, communicate with the PCB fabrication company first and ask for their feedback.
Overlooking the Hidden Costs of Offshore Services
It is true that the lower overhead and cost of labor in Asian countries could attract manufacturers. However, there are other charges that they do not notice, such as logistics and transportation. Delivery via ocean freight extends the lead time, which lessens your flexibility to address changes in demand on short notice. While airfreight delivery lessens the lead time, it is expensive for heavy or large products. Other issues include communication challenge because of time zone difference, cultural factors, and language barriers, which can cause delays and frustration.
You can be successful in outsourcing your PCB fabrication if you have the right people, tools, processes, and strategy to manage your business.