Outsourcing manufacturing: supply chain management

One of the benefits of working with the right contract electronics manufacturer (CEM) is the guarantee of expert supply chain management.

Once you have chosen your outsourcing partner, it is important that you know how to work with them to ensure the supply chain quality and efficiency that is critical to the success of your product portfolio and company.

To help establish a CEM partnership that will provide the supply chain management service that you need, we have put together this short guide to ensuring that your supply chain management requirements are met.

How to achieve optimal supply chain management with a CEM partner

  • Expertise and experience – it is important to work with a partner who has long-standing relationships with a global network of reputable suppliers. They should have a deep understanding of the supply chain arena and the flexibility to deal with any disruptions, such as the global shortage of electronics components in 2018, and ensure an unbroken supply of high-quality parts.
  • Good communication – this is a key pillar of any working relationship and one that certainly applies to supply chain management. A dedicated communication channel, whether relating specifically to supply chain management or including it, should be in place. It will allow you to be clear about your demands and any issues that arise, and help ensure that these demands are met and issues are addressed as quickly and efficiently as possible.
  • Transparency – the more information that you provide about your product demands, the better your partner can manage your supply chain requirements. Transparency, to the level that you deem appropriate, will help create an open, close relationship, which in turn will help optimise your supply chain management and ensure that you receive a high standard of service.
  • Agreed framework – agree the parameters of your working relationship before it starts and keep activity within them. There should be some degree of flexibility built into the agreement, as markets and product demands will evolve, but setting clear parameters and consistently sticking to them will help your partner manage your supply chain needs and deliver a consistently high standard of service.
  • Accurate forecasting – it is important to make your product forecasting as accurate and reliable as possible. The right partner will be able to hold stock for you, but not indefinitely, so there should be rules in place to govern the holding of stock. Accurate forecasting helps to create a more efficient working relationship and deliver a more cost-effective service.
  • Blanket order agreement rules – a blanket order agreement can help improve efficiency, shorten lead times, reduce stocking requirements and reduce costs. They can also help deliver better supply chain visibility. In order to benefit fully from this arrangement, it is important that your blanket order agreement is bound by a clear set of rules, preferably agreed upon in person with your partner.
  • Trust – mutual respect is a vital component of a business relationship and this extends to supply chain management. You have carefully chosen your partner and it is important that you allow them the freedom to apply their expertise to the management of your supply chain needs.

In today’s highly regulated, fiercely competitive and increasingly global marketplace, where supply chain management is becoming increasingly complex and demanding ever more resources, working with the right CEM in the right way will help keep you on the front foot.

To achieve this goal, you need to establish a successful working relationship and management framework. This guide and the right contract electronics partner will help you do it.

To find out how MPE Electronics services can benefit your business, contact us on +44 (0)1825 764822 or enquiries@mpe-electronics.co.uk.