In-house versus CEM – The True Costs of Manufacturing

May 8, 2018Contract electronics manufacturing, Testing

In-house versus CEM – The True Costs of Manufacturing

When trying to decide whether to outsource part or all product assembly to a contract electronics manufacturer (CEM), cost is, rightly, a huge factor for.original equipment manufacturers (OEMs). But a common mistake when weighing up which is the better value for money, in-house or outsourced product assembly, is to overlook some of the costs involved in undertaking the work in-house. One of the major benefits of outsourcing to a CEM is knowing the cost for the entire job and knowing that it won’t creep upwards with hidden or unforeseen extras.

When weighing up whether to keep product assembly in-house or outsource to a contract electronics manufacturer, it is important to undertake an analysis of all the costs in order to make a direct and accurate comparision.

The unexpected costs of product assembly

  • Equipment
    Most companies will factor in the cost of buying new equipment to manufacture a new product but they don’t always consider the impact of sudden changes in demand or the cost of the adaptations required to meet these new demands. Flexibility and agility have become essential in modern electronics manufacturing and the costs involved in changing, adapting and recalibrating equipment can be considerable, especially for a company only geared up for making a particular product or range.
  • Stock
    There are a number of issues around stock that are sometimes overlooked. Not only is buying in components to keep in stock problematic when there are sudden changes in demand, they also take up valuable space, which could be used more profitably for other purposes. It’s also likely that an OEM won’t have the same buying power as a CEM as the CEM will buy such components in greater volumes and may well get a better price.
  • Staffing and skills
    Hiring, training and retraining staff is an expensive business, especially if they are only required for a specific project and will need retraining in the future. Extra space and resources needed to accommodate these new staff are also expensive but a CEM will absorb all these costs, even if staff have training needs that weren’t originally anticipated.
  • Quality Control
    At MPE, we recently invested in new quality control and testing equipment so know how vital it is to ensure everything we manufacture does exactly what it is intended to under the types of conditions it is likely to need to operate in. Therefore, we understand how expensive this equipment can be along with the expense of training staff to use it, calibrating it, maintaining it and making space for it. Function testing and environmental testing can be very specific to individual products and applications so putting the correct processes in place can take up valuable time and resources.

By working with a CEM like MPE Electronics to assemble your products, you will know that all of the above is taken care of and that not only are all the expected costs already taken into consideration, but that we take on the unexpected ones too. An experienced contract electronics manufacturer will also make the process of transferring your product assembly to smooth and undaunting, and a step that you will be pleased you took.

MPE Electronics undertakes product assembly to an exceptional standard while offering convenience, value for money and the reassurance that you will not incur any unexpected costs.

Find out what we can do for you by visiting our website, calling us on 01825 764822 or emailing

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