What Does A Contract Electronic Manufacturer Do?

Contract Electronic Manufacturing (CEM) is the term used to define the practice of outsourcing the manufacturing of electronic components and assemblies to a specialised third-party known as a Contract Electronic Manufacturer. These contract manufacturers offer various services and tasks from component sourcing and printed circuit board (PCB) assembly to final product testing, packaging. Contract manufacturing took off as electronics design and assembly grew more complex, placing demands on manufacturers to be faster and more nimble, while corporate decision-makers sought ways to reduce capital expenditures and overhead associated with in-house production.

Key Services Provided by Contract Electronic Manufacturers

Contract electronic manufacturers offer a comprehensive suite of services to help original equipment manufacturers (OEMs) and product designers bring their electronic products to market. Some of the core services provided by CEMs include…

1. Sourcing and Procurement: One of the primary functions of a CEM is to find and acquire all electronic parts required for manufacturing including integrated circuits, resistors, capacitors and other components. CEM’s hold larger supplier networks and can use their buying power to get good pricing with guaranteed supply.
2. PCB – Printed Circuit Board Assembly: One of the most important step in electronics manufacturing process is printed circuit board assembly .CEMs offer the equipment and expertise to arrange all of the required electrical components onto the PCB in a reliable manner usually referred to by soldering (either utilising solder paste or wave) and connecting and arranging them appropriately to ensure they are functional.
3. Box Build and Final Assembly: Additionally, CEMs can perform the final assembly of the entire electronic product including PCB integration with enclosure and other mechanical components. This “box build” process facilitates the complete incorporation of all subsystems in a built-in product.
4. Testing and Quality Assurance: Contract Manufacturers provide a complete range of services in testing the product that is not only limited to final yield but extends beyond, thus guaranteeing excellent quality and reliability. This will include functional and environmental stress testing, or any other special tests to find potential problems so they are fixed before the product reaches end-customer hands.
5. Production and Operations Management: The Contract Electronic Manufacturer should be in a position to oversee the whole supply chain, from where to source components all the way through to shipping finished products directly to your customer. It also encompasses the management of inventory, warehousing and logistics coordination to ensure products are received timely.
6. Aftermarket Support and Repair: In some cases, CEMs can also offer a full-range of aftermarket support services including product reparations, warranty management and spares fulfilment. This can help OEMs to both continue issuing customers with top of the line goods and minimise their own need for post-sales support.

Advantages of Using a Contract Electronic Manufacturer

The key benefits of using a Contract Electronic Manufacturer for Original Equipment Manufacturers (OEMs) and Product Designers include…

1. Innovation: By outsourcing manufacturing, OEMs can free up their internal resources to focus on product design and innovation as well as other core business activities rather than getting bogged down in the complexities of production.
2. Low Capital Investment: CEMs invest in manufacturing equipment, infrastructure and human resources so that OEMs do not have to spend high capital cost for setting up an internal production unit.
3. Greater Flexibility and Scalability: CEMs are able to expand or shrink production on short notice, which gives OEMs more flexibility in responding to changing industry conditions.
4. Specialised Expertise and Technology: CEMs are experts in the field of electronic manufacturing, with access to cutting-edge production technologies. This allows OEMs to leverage the knowledge and economies of scale from their CEM.
5. Better Quality and Reliability – CEMs have a solid quality control process, state of the art testing facilities at your disposal as well as an experienced set of engineers who will help in building high-quality reliable products.
6. Faster Time-to-Market: Many OEMs can bring products to market more quickly using a CEM, because the established processes and infrastructure take time to build internally.
7. Improved Pricing on Components and Materials: CEMs can often negotiate better pricing for components and materials that would be difficult, if not impossible, to obtain for the OEM, thanks to their purchasing power and economies of scale.

Key Considerations When Selecting a Contract Electronic Manufacturer

Product designers and original equipment manufacturers need to make a number of careful considerations when selecting a contract manufacturer in order to cultivate effective partnerships, such as…

1. Manufacturing Capabilities: Evaluate underlying technical skills, tools and equipment as well infrastructure that the CEM company has against product specific requirements being manufactured.
2. Quality Control: It is important to know if the Contract Electronic Manufacturer has its quality control systems working with all their testing capabilities and can deliver good products matching industry standards.
3. Supply Chain: Make sure the CEM has a secure supply chain infrastructure in place to handle applicable component and materials procurement along with logistics.
4. Industry Experience: The CEM in your industry/product category has likely seen all sorts of unique challenges, consider this liability carefully (it could turn out to be an asset).
5. Geographical Proximity: The physical location of the CEM relative to that of the OEM or end-market, as determined by any specific project requirements
6. Financials: Determine if the Contract Electronic Manufacturer is financially sound (have they been around long and do they have their own resources for a rainy day so that you don’t wake up one morning with them out of business).
7. Certifications and Compliance: For example if your company should have ISO 9001, make sure that the CEM holds a certification as well.

Through careful assessment of these key criteria, the original equipment manufacturer and their product designers will locate the contract electronic manufacturer that provides best for their particular manufacturing requirements as well as business needs.

As shown, contract electronic manufacturing is an integral area of operation in the global electronics industry, which allows large OEMs and product designers to capitalise on their core competencies while tapping into specialised skills, resources, and scale provided by dedicated contract electronic manufacturing partners. This of course brings with it more efficiency, quality and time-to-market benefits. The overall goal being to drive innovation in the rapidly changing electronics landscape competitively using Contract Electronic Manufacturer services.