Part 2: Top Five Must-Haves in an Electronics Manufacturing Partner (EMS)
The cost-benefit of selecting an offshore electronics manufacturing services partner (EMS) makes dollars and “sense,” but the real magic happens when your EMS partner possesses these 5 “must-haves.”
1. Original Equipment Manufacturer (OEM) and EMS Fit
As an #Electronics #OEM, consider whether your product design complexity and volumes are the right fit for an EMS partner. Do your designs and product require sizeable engineering support or is it rock solid with all the kinks ironed out? Are your products highly complex, requiring troubleshooting even after handoff to production? If so, discuss these challenges with the EMS partner and make sure they have the in-house engineering to handle such requests.
You will be surprised to find an EMS partner offering end-to-end engineering capabilities, even for medium or smaller volumes of electronics manufacturing. They use the latest development tools, load firmware, build custom test fixtures and jigs and even maintain Board Support Package (#BSP) and version control. The right EMS partner could fill a big capability gap that is typically only possible with large Original Design Manufacturers (ODMs).
2. Pricing Power
There’s price and then there’s priceless! If your EMS partner already has a “negotiated price” for Integrated Circuits (ICs) and pricey class-A parts, chances are you stand to gain significantly from receiving those cost benefits by default, despite your lower volume! Such an offer could be a game-changer when you are launching a new product in the market. It could be a strategic advantage over your #competitors who don’t have access to this pricing power. Another bonus!
3. USA Contracts and IP Protection
A key concern with using a potential offshore EMS is whether you might risk losing your product differentiation. Do you really want a knockoff of your product at 75% discount trying to steal your customers away?
A good way to combat this—a bit of a twist from the typical #ElectronicsSupplyChain alternative—is to retain a US company with carefully curated offshore EMS factory operations. You get the best of both worlds–offshore cost advantages and IP protection! The US company assumes responsibility for protecting your IP; the company must abide by US laws and is on the hook to safeguard your designs despite offshore manufacturing.
4. Communication and Collaboration
Is your primary interface with the EMS provider in a different time zone? Many companies underestimate the cost that is involved in effectively transferring New Product Introduction (NPI) to production, which can often span weeks if not months of time spent in travel to streamline volume production.
Leverage a US company to own the communication and accountability for their offshore factory operations and ensure your turnaround times are met. While this may not give you the lowest cost to build, it can be key in achieving your time to market, especially if you are hindered by fewer engineering resources to handhold design to production.
5. Geopolitical Stability and Tariffs
Today, more than ever, it is imperative that you weigh the geopolitical stability of the offshore EMS’ resident country when you are vetting them. Failure to do so could easily impact your multi-year business strategy in the event tariffs are imposed that cannot be sustained in cost to build your product.
Do any of these points resonate with you–or do you have other insights? If so, we want to hear from you. Please reach out.