Electronics assembly is offering a contract to assemble electronic components for another company. This is known as ECM (Electronic Contract Manufacturing) and is a service often used by OEM companies.
Instead of manufacturing complex components and motherboards, OEMs outsource their manufacturing tasks to electronic component manufacturing companies. ECM companies do not label their ingredients in any way. Instead, the component remains unbranded and bears the name of the OEM company offering the contract.
Today, many ECM companies exist, and this can make it challenging for users to determine how to choose the best electronic manufacturing services. If you need electronic manufacturing services and do not know where to start, this guide offers you everything you should know about electronic contract manufacturing services.
What Is An OEM Contract Manufacturer?
Simply put, an OEM contractor is an outsourcing company that manages the creation of equipment that the rental company cannot manufacture. OEM contract services exist in almost every industry and allow major manufacturers to expand their product or service line with minimal additional expense.
OEMs can offer significant advantages and customization options over in-house manufacturing management.
What Is the Difference Between Electronic Contract Manufacturing Services and OEM?
While electronic contract manufacturing and original equipment manufacturer for printed circuit board assembly are always misunderstood to be similar, they are different. Some of the differences between these two are seen in how electronic assemblies are conducted by expert engineers involved.
● Original Equipment Manufacturer (OEM)
OEMs design and sell parts that other companies and customers use in their products and industries. Companies, customers, and industries that buy OEM parts are value-added resellers (VAR) who specialize in a particular electronic product, galvanized steel or offer design assistance for those who build to print.
OEMs and VARs, who are customers or industries, work together to ensure quality conformal coating of lead time and other electro-mechanical or industrial tools used in the assembly process.
● Contract Manufacturer (CM)
Small businesses can hire other companies or contract manufacturers (CMs) with quality certifications to manufacture their products using cutting-edge technology for fulfillment services while ensuring functional testing when they want to harness assemblies before the surface mount is done in electronics manufacturing
These manufacturers ensure rapid prototyping for electronic assembly, PCB assembly, circuit board assembly, and other contract manufacturing services like electro-mechanical assemblies; they offer seamless deliveries of wire harnesses and electronic products for commercial industries.
For electronic assemblies of printed circuit boards or a printed circuit board assembly, cable assemblies are done by ensuring supply chain management, surface mount technology, and manufacturing technology.
What Companies Use Contract Manufacturing?
Any company specializing in PCB assembly, electro-mechanical assembly solutions, box builds, consumer electronics, sophisticated electronic products, wire harnesses, box build assembly, and mixed technology can use contract manufacturing. The services these original equipment manufacturers offer guarantee high-quality products and customer satisfaction for all box builds.
Other companies that can use electronic manufacturing, asides from those that harness assemblies for box builds, include:
- Parts require large capital investment in equipment, such as metal stamping, machining, aerospace, automotive, industrial, and distribution equipment.
- Parts require highly specialized manufacturing expertise, such as printed circuit board assembly.
Reasons Why Companies Utilize Electronic Manufacturing Services
Sometimes, you may wonder why people opt for electronic contract manufacturing for printed circuit board assembly or packaging control instead of considering other options for customers. Yes, the other packaging or control options may be cheaper, but the benefits of electronics manufacturing and the electronic assembly project are numerous.
1. Reduce Capital Investment And Risk
Building a factory or renovating an aerospace or industrial production line on specifications requires a large capital investment and many other resources. In addition to capital, the following resources will be required:
- Construction management
- Production engineering
- aerospace and industrial engineering
- Sources of financial analysis
- Project management
In addition to the resources mentioned above, the automotive project will take some time, depending on its specifications. Investing large resources may be wise to create a stable and low-risk product with great ability. Contract manufacturing makes much sense for lesser-known and more speculative automotive products.
2. Flexibility
Running your factory requires an investment of capital and human resources with the right ability for maximum delivery or prototyping services and quality electro-mechanical services. Once that commitment is made, change is very difficult to make. It is very difficult to change:
- Manufacturing process
- Production technology
- Tools
- Suppliers of raw materials
- Place of production
No business wants to deal with the headache of changing factories. When you contract with a manufacturer, you don’t have to worry about internal changes they make. The electronic contract manufacturer is responsible for fulfilling its part of the contract with you. This is when they can devote their time and energy to the core of their business, such as sales.
3. Approval of Cost and Time
Even if your company has enough capital to build a factory, the cost of the final product still needs to be determined. If cost overruns occur during construction or production, labor costs are higher than anticipated; this will increase the cost of the product. Production schedules are also at risk with any new project. Several elements can negatively affect production time:
- Construction delays
- Delays in the delivery and installation of production equipment
- Selection and training of new production workers
If you want to know exactly how much your product will cost and when it will be delivered, hire a proven contract manufacturer. They will calculate the figure for you and specify the cost and delivery time in the contract.
4. Experience and Expertise
There is a popular saying, “Do what your business does best and outsource the rest.” Is manufacturing not your company’s forte? Therefore, it makes sense to outsource to an experienced contract manufacturer. A manufacturing company needs time to solve problems before it becomes good and streamlined as a stable manufacturer. Its:
- Impact on your business results
- Achieve the quality of your product
If you want to make a good first impression on your clients, choose a qualified electronic contract manufacturer who:
- Has experience in manufacturing your product or a similar product
- Can start production quickly
- Produce quality products
- Employ qualified employees
Experienced contractors of PCB assembly know the ins and outs of electronics manufacturing. Instead of reinventing the wheel, most companies are better off hiring existing and experienced manufacturers for PCB assembly or harness assemblies of quality electro-mechanical prototyping.
Advantages of OEM
Whether it is for printed circuit boards assembly solutions, cable assemblies, circuit boards restructuring, electro-mechanical assembly solutions, or electronic manufacturing services, here are some of the benefits of OEM:
- Using an OEM, you can customize the service or product as long as it is technically possible.
- As long as you have the right contract and cover. You own the intellectual property.
- You will have an exclusive product in the market.
Disadvantages of OEM
It is not always enough to focus on the capabilities and benefits of OEM alone; you must note some of its advantages and include:
- Buyers will have to cover the costs of tooling and molding, which can be very high.
- Creating molds and making new tools takes at least a month, usually longer.
The Benefit of Using OEM Contract Manufacturing
In the medical line, contract manufacturing presents an opportunity that helps medical companies to keep up with the rapid technological development of medical devices and bring new and necessary products to market with efficiency, speed, and increased profitability.
● Specialization
The medical device OEM industry includes a wide range of products that need electronic contract manufacturing, from basic patient-operated devices. These devices range from small enough to be held in hand to large and complex electronic consoles designed for physicians and healthcare professionals within the hospital or office settings. With the right contract manufacturing services for PCB assembly, quality electronics and services can be made available in the medical industry.
● Scale
Due to specialization, industries offering contract manufacturing to established companies benefit from economies of scale in quality labor, materials, and services. This allows contract manufacturers often to purchase bulk materials and services at discounted prices, and delivery of finished and specialized parts is done quickly.
● Savings
OEM electronic contract manufacturers’ dual specialization and economies of scale provide overall cost savings for medical device OEMs. Not only do they save on labor, materials, and equipment, but they also reduce the time it takes to get from concept to finished product.
How to Choose the Right Contract Manufacturing Partner
If you’re looking for a contract manufacturing service for the partnership to optimize your production, here are some tips to help you search. Good CM:
- Understand customer, statutory and regulatory requirements
- Meet and exceed these expectations without compromise
- Deliver goods without defects, on time, every time
Regardless of the type or complexity of your relationship, your contract manufacturer should still be concerned with quality service and customer satisfaction.
Conclusion
Electronics contract manufacturing is a business model where OEMs hire EMS companies to complete hardware construction. Both parties benefit from creating an electronic contract, which is why seeking the best, like those offered by Rayming PCB assembly, which you can access when you click here.
