This fourth article in our series following the progress of a new product from inception to delivery in the marketplace, focuses on the move into volume production. Selecting a partner for this step is a decision that warrants detailed research and your commitment to travel and meet candidate companies to be sure of getting the right team on your side. The partner is likely to carry out the full assembly, not just the PCBA so it is imperative for the hunt to start early in the process. A good time might be the point at which the first design is going to prototype. At this stage, you will have a fair idea what the finished product is going to look like, and hence what manufacturing skills are going to be required. The manufacturing partner for the production volumes would likely be the same as the one chosen for the pre-production volumes, so the decision would need to be made by then. The pre-production batch will also then provide an opportunity to validate the relationship.
Pushing the Big Button: Finding and Engaging a Partner for Volume Manufacturing
By John Bowman, Marketing Director, Anglia Components and Andrew Pockson, Divisional Engineering Manager, Anglia Components
This fourth article in our series following the progress of a new product from inception to delivery in the marketplace, focuses on the move into volume production.
This is a decision that warrants detailed research and your commitment to travel and meet candidate companies to be sure of getting the right team on your side. The partner is likely to carry out the full assembly, not just the PCBA so it is imperative for the hunt to start early in the process. A good time might be the point at which the first design is going to prototype. At this stage, you will have a fair idea what the finished product is going to look like, and hence what manufacturing skills are going to be required. The manufacturing partner for the production volumes would likely be the same as the one chosen for the pre-production volumes, so the decision would need to be made by then. The pre-production batch will also then provide an opportunity to validate the relationship.
Understand the Choices
As a UK-based OEM, you have some great options when it comes to choosing a manufacturing partner. Broadly, they fall into three categories. There is a strong domestic scene, served by companies with in-house expertise and the assembly and test technologies needed to deliver in volume and guarantee quality. There are also companies that can offer a hybrid of UK-based and overseas assembly. You can get a local team to respond quickly to your needs and enjoy the economies that come with doing some or all the assembly work in central Europe or the far east.
Or you can go full offshore, which likely means choosing from among the large number of contract manufacturers in China that offer services directly to western OEMs. Over the last 20 years, at Anglia, we have worked with about 25 such China-based CEMs and we have a good understanding of how they work and what they offer. And we’re happy to share our insights with start-ups that are interested in this option.
Your initial screening should also include studying customer testimonials and any other published material as well as social media you can find about the companies you are considering as your potential partner. When you have your shortlist, there is nothing like a personal visit to find out what you need to know. This may involve some long-haul travel, which may feel expensive. However, face to face contact is extremely important and is often the only way to find out if you really work with the team, their way of doing things, and their location. You can be sure that there will be issues as the relationship progresses and you need to be sure you can tackle them productively and pragmatically together. You need a rapport. If it’s not there, look elsewhere.
The candidates you shortlisted will, of course, require information if they are to provide you with a bid. This includes basic information about your product, such as the PCB design and BOM. Note that mixed-technology assembly adds cost, as will double-sided boards if your design needs them. Express your requirements as comprehensively and accurately as possible. Don’t forget about any extras, such as device programming, particularly if there are security concerns about this aspect, as well as any additional mechanical assembly, wiring, machining, shipping to your site, or box-build including delivery to a distribution centre or logistics partner. Ensuring complete clarity at this stage will not only give you certainty about price in the long term but will also help you compare the quotes you receive from different parties.
It may sound obvious but look carefully at the quotes you receive and perhaps most carefully at the lowest offers. Bear in mind that manufacturers in areas where labour costs are particularly low tend to rely on the margins from component sales to achieve their profit target. Be sure that all the correct branded components on your BOM are included. If lower-cost replacements have been substituted, are they true equivalents? Will they perform as you require? And has the company been honest about the change? Can you trust other aspects of the quote? Check that all the services you specified have been included. You may find that low bidders try to increase prices after you have committed.
Work at the Partnership
When you have chosen the winning bidder, you need to work at building a winning partnership. As in any relationship, sincerity is a pre-requisite. As the OEM and customer, you should be sure to set reasonable expectations that a hardworking and responsible partner can fulfil. They need to give you confidence that your satisfaction is their goal.
Keeping in regular contact is essential. No connection like this, whether with a local UK-based or offshore partner, will succeed on a fire-and-forget basis. There will be challenges even before the first units start coming off the production line. Part of building that relationship involves establishing lines of communication between the right people in both organisations to solve every problem and accomplish every task.
As the work progresses, be aware that component prices can change over time so you can expect some fluctuations and rises. A couple of price changes in a year is quite normal. And if you’re working with an offshore supplier, do understand that shipping costs and lead times can be subject to change. Shipping costs have risen dramatically in recent times. Although the sharp increases experienced immediately after the pandemic appear to have subsided, the cost of a shipping container remains about $17/18k compared to $3k not so long ago. A small percentage change can make a significant difference to your costs. Also be aware that prices from China are quoted FOB - freight on board - which means that your partner is paying for shipping up the point the product is delivered and loaded at the departure port. The costs from that point until delivery in the UK is your responsibility, including shipping expenses and any import duties.
Of course, since Brexit, the situation has also changed significantly regarding working with manufacturing partners in mainland Europe. At Anglia, we have already acquired a lot of experience in dealing with the changes that have happened since 2019.
Keep Talking
We’re happy to talk everything through with you, from component selection and design approaches, to prototyping and the transition into volume production. We have collaborated with many successful start-ups over the years we have been in this business. Our understanding of the changes in the economics of product marketing and manufacturing, as well as the trends in component technologies and the supply chain, help us understand the way things are right now and how they may change in the future.
Most importantly, however you go about it and whoever you ask, get as much information as you can about your shortlisted partners: their capabilities, reputation, location, and the people you will be dealing with. The phrase 'knowledge is power' is as true today as when it was coined. On the other side of that coin, do recognise that your partner equally needs to understand you and your needs. Get clued up. But also, be sure to open up.
Author Bios
John Bowman, Marketing Director, has been a part of the Anglia team since 1997. John’s career at Anglia has included leadership roles in Business Development, Field Application Engineering and Divisional Marketing for Semiconductors. In 2010 John was promoted to the position of Marketing Director and joined Anglia’s Board of Directors.
Andrew Pockson, Divisional Engineering Manager, first joined Anglia in 2005. His responsibilities span a range of semiconductor partners in both digital, analog and power products along with passive and electro-mechanical components. He spent over three years as a design engineer before moving into marketing.
