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April 5,2019,Philippines—With today’s fast-changing and highly competitive global manufacturing industry, contracting and working with an outsource manufacturing company has become a great advantage. When you outsource manufacturing services, you have experts do the work for you with lower costs and faster time-to-market. However, despite the significant benefits that come with outsourcing EMS providers, it also presents a unique set of risks and challenges to OEMs.

To ensure the effectiveness of outsource manufacturing and a smooth sailing production from start to finish, here are the five common mistakes to avoid when you are outsourcing EMS!

Mistake #1: Being unsure of what exactly to outsource

Although there are many benefits to outsourcing EMS, one should not jump too quickly into it without fully understanding his own company’s EMS needs and how it will impact their business. Before you contact an EMS provider, try to list down every product manufacturing task your company needs, identify the skill set needed for each task, and then decide which among those can you do in-house and which ones do you think would be better if done outside the company.

Just because many EMS companies provide complete manufacturing services from product design and development to distribution does not mean you should avail of all available manufacturing services. Outsource only what is truly necessary and will be beneficial for you.

Mistake #2: Sacrificing better EMS providers for lower prices

Contracting an outsource manufacturing service provider can help you cut costs on labor, equipment, facility, and more. However, although paying for cheaper EMS prices would be great for the company’s finances, be aware of the things that cheap-priced EMS companies will be sacrificing (i.e., massive cost-cutting that has negative effects on performance quality) in order to give you a lower price.

It is much better to invest on a more expensive EMS provider if it means high-quality outputs and less cost in the future.

Mistake #3: Having unclear objectives

Transparent communication is a key ingredient for a healthy relationship between OEMs and EMS providers, and this entails setting clear objectives. Without clear objectives and goals, it will be hard for the EMS provider to produce detailed work or stick to a timeline.

Before signing any contract, make sure to have a proper meeting with your EMS partner regarding your production schedule, deadlines, and payment plans. Clarify agreements on communication methods especially regarding progress reports and feedbacks.

Mistake #4: Poor NPI Project Management

Ensuring a smooth transition from the product design stage to final manufacturing phase is the implementation of new product introduction or NPI which is one of the most complex processes in manufacturing. With hundreds of parts involving sub-projects to design, source, quality, and release, it is easy to be confused and lose track of what is happening during NPI which may delay the process.

Help your EMS partner and your company prevent problems by creating documentation, task lists reviews, and proper supporting information systems to keep track of changes or improvements in your product.

Mistake #5: Ignoring or forgetting hidden costs

When choosing an outsource manufacturing partner, many OEMs limit their price evaluation to the direct costs of labor, materials, and equipment while excluding indirect or hidden costs such as logistics, unraveling unexpected costs that can destroy your project financial plan.

Make sure that your EMS partner provides you with the indirect costs too, along with the direct costs, especially if you are outsourcing offshore, to avoid any unpleasant surprises during or after production.

Making a mistake with outsource manufacturing can cost you lots of money and time. Fortunately, the potential risks and challenges that may come with outsourcing EMS are things you can prevent if you are careful and meticulous. Keep in mind these five common mistakes when outsourcing EMS to ensure quality and on time production.