How to transfer product assembly to a contract electronics manufacturer

Jan 18, 2018Contract electronics manufacturing, Full box build assembly

How to transfer product assembly to a contract electronics manufacturer

For original equipment manufacturers (OEMs), outsourcing product assembly to a contract electronics manufacturer (CEM) has become an increasingly important way of staying competitive and being able to deliver products to ever-tighter deadlines. However, the detailed planning and preparation required to make such a transition without any disruption to production mean some OEMS are put off making this vital decision.

But by working with an experienced and expert contract electronics manufacturer you will be assured not only that they understand the needs of your business, the standards required and the timescales involved, but that they have successfully helped many others through this daunting process.

Beyond Price

The decision to outsource is often motivated by cost in a highly competitive market, but OEMs can find themselves tied into a contract with the wrong electronics manufacturing service for their operation because they chose them primarily on price. A low-priced quote can lead to a hasty decision about who to outsource to, without fully considering the implications of the chosen CEM’s technical capabilities, materials management capabilities, quality control, strategic fit and financial health.

There are many benefits to working with a contract product assembly company whose price may not be the lowest, but whose experience, flexibility and customer service standards will always ensure open communication and a close working relationship with customers.

Investing in people

Some processes will, no doubt, have been perfected by the OEM’s team and transferring these skills to a product assembly contractor can be challenging. There are legal requirements to fulfil if the plan is to transfer staff from the client company to the CEM and staff may be resistant to moving or reluctant to be involved in training a team they see as replacing them.

Dealing with staff in these situations can be a very delicate matter so having the correct HR support in place is key, as is extensive planning long before any move takes place. At MPE Electronics, we place great significance on training our teams to adopt new procedures to fulfil clients’ requirements and will advise on staff training or retraining in these circumstances.

The right tools for the job

As some processes require customised or unique equipment, ensuring the CEM has the equipment to do the job is another vital part of outsourcing product assembly that requires careful planning. If the OEM is outsourcing all of their product assembly, or a large enough part of it, the simple solution may be to sell the necessary equipment to the contract assembly company. However, if you want to perform your own testing, both you and your chosen CEM will require identically calibrated testing equipment.

Similarly with stock, it may not be as simple as transferring remaining components over to the CEM, as supply chains for products such as printed circuit board assemblies can be complex. It’s also possible, probable even, that the CEM has a reliable system operating with their suppliers and won’t want to take on the OEM’s stock. However, if the CEM does want to take on the entire supply chain, drawing up a ‘deed of novation’ will ensure that everyone involved knows exactly what is expected of them.

Outsourcing product assembly, either fully or in part, is a great way to save time and money and the transition can be handled smoothly and efficiently if you choose your contract electronics manufacturer well.

MPE Electronics works very closely with potential customers to ascertain their exact needs and situation. We always plan our operation well in advance and have robust systems in place to deal with quick changes in demand or processes, allowing us to integrate new customers’ requirements into our business without any disruption or break in supply.

Our team are trained to help our customers through every step of this process to outsource product assembly. To find out what we can do for your electronics manufacturing operation, contact us now by calling 01825 764822 or emailing

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