To Build Or Not to Build?

...  That is the question on many OEMs lips when a change in strategy or a  review of resource suggests that relinquishing the final assembly might  be the best route. 

To  date, many OEMs already have PCBAs (printed circuit board assemblies)  sourced by local or off-shore sub-contractors. Some OEMs undertake the  final assembly in-house, while other OEMs choose to allow the  sub-contractor to build the complete unit, and may even have the product  shipped directly to the end customer. 
There  are generally two schools of thought. The first is to keep control of  all aspects, requiring building in-house, or because of quality control  issues, the use of specific testing or finishes. This may also be the  case if there are no sub-contractors locally able to deliver the desired  results. 
The other school of  thought supports outsourcing as much as possible, leaving the OEM to  focus on what it does best; designing, marketing and sales. This leaves  another party to source, build, test and ship, and even, in some cases,  to service legacy products. 

Areas to consider 

When  taking a decision to outsource the final assembly, commercial  considerations have to be taken into account and justified. There also  has to be a sub-contractor already in place for PCBAs; as well as being  suitable for the task, they will need to carry the necessary  accreditation and meet the requirements of manufacturing the end  product. Such sub-contractors may be local, but if, on the other hand  you need to look further afield what should you be looking for? 
The following factors are key in making the right choice. 

Relationship and trust: a  sub-contractor needs to understand a business and the importance of  taking on a complete box build and delivering on time. Having PCBAs  built by a sub-contractor is one thing, but having the complete units  fully tested and assembled takes this to another level and should be  seen as a true partnership arrangement. 

Credit rating and financial standing are  often overlooked. The lack of investigation at the outset, or the  assumption that a company is financially stable can be damaging. 
A  relationship with a sub-contractor that struggles to finance  procurement of materials, or even worse, one that ceases trading while  building assemblies for your business, could cripple your supply chain. 

Skill set is  another important factor when assessing any sub-contractor. It is  important to make sure the company has the knowledge and expertise  across the relevant departments. Without these, it is highly unlikely  that the compony will deliver the desired results without a high level  of support from you. A management team that shows a willingness to offer  solutions and be proactive, while being fully informative are further  desirable attributes for a sub-contractor. 

Capability and equipment needs  are dependent on what is required to build the product to a given  level. Many, if not all, sub-contractors need to employ third parties  for specialist processes, such as plastics, machined parts and  packaging. One should not assume any one supplier is solely sufficient.  Check that the sub-contractor has the necessary goods-in procedures to  ensure third party suppliers adhere to your specific standards. Make  sure actions, such as final test, are compliant, all data and test  results are recorded, together with a check of traceability and  labelling requirements. Providing that the necessary equipment or  processes meet, or exceed, your own in-house capabilities, check that  the sub-contractor's skill set and experience meet your expectations.  

Capacity is  an issue with all sub-contractors at PCBA and box build level, whether  it is the degree of automation which restricts the throughput, or the  available skilled, semi-skilled staff to satisfy demand. The amount of  available resource can be constant, or it can be improved with  investment. The demands on a sub-contractor continually fluctuate,  depending on customer demand, and they must be able to demonstrate the  ability to cater for this. If your current sub-contractor supplies  PCBAs, could they supply the finished unit? Does it have the resource  and the physical space to manage the full box build - assuming it meets  the previous criteria? Where would your business sit within the  sub-contractor's customer hierarchy? Too small and you run the risk of  being overlooked for larger contracts, which could lead to poor service.  Alternatively, too large, and there could be concerns about being too  reliant on a single supplier. 

These  five basic areas should be borne in mind when choosing a  sub-contractor, advises Wilson Process Systems. If a company satisfies  all areas, it should be more than capable of supplying built products  that meet your own in-house standards - delivered where and when needed.