Outsourcing in electronics - discover the advantages

ELECTRONICS · DESIGN · CONSULTING

Electronics design and assembly can get quite complex. Any decision to hand off the practice to an outside supplier - at any level of the process - should be made in full knowledge. Let’s explore it a little further.

The benefits of outsourcing for original equipment manufacturers (OEMs) and service recipients are well documented, but naturally outsourcers have their concerns. That's why a successful outsourcing strategy requires careful, critical assessment of the company's current position and a clear definition of future goals and objectives.

There are many reasons why manufacturers and service providers choose to outsource electronics manufacturing. And since electronics have been with us virtually everywhere for many years, this decision impacts your business on many fields - starting from employees, to premises and equipment used, to customer and supplier relationships.

Electronic device design and manufacturing - what does it involve? 

It is worth realizing that the design of an electronic device consists of many elements in phases carried out both simultaneously or one after another. These are phases such as:

  • initial research, 
  • creation of a working device, 
  • selection of components, 
  • creation of schematic and PCB design, 
  • production of functional prototype, 
  • prototype testing, 
  • software research, 
  • software development and software testing,
  • finally: testing of the whole device. 

And this is the scope of activities without designing the case and/or mechanics!

Electronics assembly and design - past and present

The so-called "make or buy" decision is as old as the manufacturing industry itself. In electronics manufacturing, the outsourcing wave dates back to the 1990s, when many OEMs critically evaluated their manufacturing strategies to take advantage of new outsourcing opportunities that were expected to improve overall efficiency and reduce asset and operating costs. Efficiency is a necessity, no questions asked. 

It's worth learning from history. In the past, much of the outsourcing decisions were driven by given operational needs rather than part of a well thought out overall business strategy. This typically involved contracting with an electronics manufacturing services (EMS) company on a product-by-product or contract-by-contract basis. Over time, however, electronics manufacturing outsourcing has undergone a significant evolution as manufacturers have discovered that much greater benefits can be achieved through a team approach. So they benefited from planning accuracy and the ability to respond more quickly to rapidly changing market conditions, and lower operating costs emerged.

EMS companies evolved during this period quite much. There was a gradual expansion of services beyond simple contracted assembly, taking control of both "upstream" supply chain operations and additional assembly and logistics offerings such as agile build/configure-to-order options, advanced product testing, direct order fulfillment and management of returns and repair processes. The benefits of an "all-in-one" approach have been recognized as they should be.

As a result, today's outsourcing agreements are typically based on a close partnership between the OEM and its EMS partner, leveraging the strengths of each and completely "synchronized" supply chains to achieve the OEM's business objectives.

10 top companies that rely on electronics outsourcing

With the consumer electronics segment expected to have more than 2.5 billion users by 2023, companies focused on selling electronics face the titanic task of producing millions of electronics each year, which is no easy feat. The solution? Outsourcing. It's hard to find a better recommendation than following in the footsteps of top market big fishes. 

  • Fujitsu
  • Toshiba
  • LG
  • HP 
  • Panasonic 
  • Sony 
  • DELL 
  • Microsoft 
  • Samsung 
  • Apple

Electronics outsourcing - why is it worth it? 

Outsourcing allows you to shorten time-to-market, stay ahead of the competition and ensure customers have access to products when they need them. The speed at which consumer demand can be met draws a clear line: we have successful/growing companies and those that are falling behind their competitors. Let's look at the needs and strategic advantages listed. 

Defining the core business - the key to success

Absolute background, absolute start. There isn't a company that doesn't want to optimize the return on its resources, which can lead to the decision to outsource processes that can be defined as non-core. In the past, companies outsourced what they considered peripheral activities like cleaning, transportation logistics and maintenance. Nowadays, we ask ourselves, what is really core to our business? Is a model where some machines are idle for long periods of time really efficient? This is the first step of the analysis and decision process.

Lack of in-house resources - now what?

Lack of development staff or equipment can be harsh. This applies to small startups as well as large companies with extensive resources. Sometimes companies with strong technical backgrounds can run it, but they don't have the capacity to hire full-time electronics engineers, assemblers and/or programmers. One person or a small dedicated team is able to work on a task with a flexible schedule, but for a large project with a tight deadline, an outsourcing team can do wonders. We recommend outsourcing your design services for both entities that rely on ongoing electronics design and ad hoc needs - outsourcing to DevicePrototype team will let you avoid downtime whether it's electronics design, programming or design.

The need for expertise. Electronics expert - who’s that, to be honest?

Electronics design is a broad field that requires extensive knowledge of digital and analog electronics, FPGA design, embedded solutions, power electronics and other fields. It's hard to cover every area of development, and generalists tend to lose the race against the specialists on every given field. While it's equally hard to get the right person, it's not uncommon for a freshly minted engineering student to do a cheap project for us that will require… a complete reboot, at best. We strongly discourage this easy route that leads straight to the frustration of hidden costs. You may not need in-depth knowledge to work with the leading microcontrollers on the market, but you do need a skilled developer to design a circuit board for the chip. And if you lack that know-how, that's another reason to choose a team with the right skills and experience.

3D modeling - get a full product preview

Seeing means being able to understand. Even better than seeing is seeing at the start - clarified design obtained before the implementation stage allows for refined consultation on issues of need, cost and profit. Industrial design and 3D modeling have long been valued by industrial, engineering, and even consumer industries - an integral part of the design process among giants Nike or Adidas. 

Our team at DevicePrototype:

  • performs design research,
  • creates file packages and visualizations, 
  • creates device design with functional features,
  • conducts tests,
  • delivers a functional, transparent model and places elements in it, so that the desired product can be tested more.

Why is this important? Well, this is the perfect time to catch any potential bugs and shortcomings before the final solution is even implemented, and ultimately avoid the cost of creating something that simply won't work right.

Eliminating risk, simplifying the process

There is a certain amount of uncertainty involved in partnership, especially when it is your first experience of working together. We may not always be sure if the partner meet the deadline and budget, or if they complete given project at all. Outsourcing prototype to an engineering team frees us from risk and liability. We bypass the search, recruitment and retention of personnel. DevicePrototype commits the resources of specialists, so there is no obligation to maintain staff beyond the scope of the contracted work. Let's face it - once the project is complete, you don't have to spend money on salaries and employment taxes.