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4 Ways Contract Manufacturing Partners Should Do Cost Reduction

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Here are 4 ways you should expect a contract manufacturing partner to be reducing your costs. 

  • Poor Component Selection: A product can function and meet your cost goals, yet be difficult to manufacture. An approved vendor list (AVL) that has a large number of sole-sourced components can be setting you up for material availability issues longer-term. Your contractor’s New Product Introduction (NPI) process should include design for manufacturability/testability recommendations using tools like Valor. The NPI process should also identify any materials availability issues using information from components suppliers and third-party providers like SiliconExpert and IHS.

  • Obsolescence management: A reactive approach to obsolescence management limits your options and generally increases your inventory costs. Your contractor should have the capability to do product lifecycle management (PLM) analysis periodically and proactively recommend options as obsolescence risk increases. SiliconExpert and IHS are both excellent sources of obsolescence information.

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  • Quality: Defects are not only costly in production, they are also costly in the field. Your contractor should be able to not only provide the quality reporting metrics you desire, but also be willing to work with your team to identify root causes and process and/or redesign solutions. Tip: Most PCB assembly defects can be traced to either solder paste or oven profiles.

  • Test and Inspection Strategy: As product complexity increases, the ability to achieve 100% test coverage decreases. Your contractor should not only have a variety of test options such as flying probe, AOI, x-ray, in-circuit and functional equipment, but should also have a methodology for determining the best complementary test strategy coverage you need.

The lowest total cost outsourcing partnerships, are just that—partnerships where the contractor provides both shared production resources and the expertise needed to help you achieve your cost and quality goals. Optimum will soon be releasing a whitepaper on 100 Ways to Reduce Cost; sign up now to receive a copy as soon as it's published.