Have you ever dove into something for which you were completely unprepared and immediately regretted it? I can tell you about one such instance. I and two others had been invited on a river rafting trip by a co-worker, who claimed to be an expert river guide. We soon discovered, however, that this “nature adventure” had more in store for us than we were ready for when we briefly lost control of our raft. Thankfully, we quickly returned to safety, but for a moment, I thought we might end up on the rocky bottom of the river bed.
Relying on an unknown contract manufacturer on the other side of the planet to build your new PCBAs is another type of risky, high-stakes “adventure” for which your company is likely unprepared. When it comes to maintaining maximum control over production, quality, and cost with a timely rollout, a local CM is a much better choice. This is especially true when you’re innovating in Silicon Valley and need a reliable CM to manage your NPI runs. Here’s a closer look at the potential PCB manufacturer advantages and disadvantages that come with partnering with a local CM.
Local PCB Manufacturers Ease Research Process When Choosing a CM
On my rafting trip, I had unconsciously transferred feelings of trust and safety to someone whose skills on a river were unknown to me, and the results were disastrous. Likewise, it is short-sighted to commence production with any CM without having obtained unbiased information about the CM’s integrity and performance record. You do not want to discover too late that your proprietary design has been stolen, or that your product reflects your CM’s lack of quality processes.
This research is easily accomplished within the PCB manufacturing community in Silicon Valley, but it’s much more difficult to do when a CM is overseas. In these instances, you often must rely on the information provided by the CM, along with the limited historical and financial documentation available in the public domain.
When you choose a local partner, your company can avoid making a blind decision because there are multiple avenues available to objectively assess CM performance:
- Your company can interview local industry peers who are familiar with a CM’s production history, market segments, strengths and weaknesses, and industry reputation.
- Your engineers can tour local CM facilities to observe the CM in production mode and their management style.
- The CM’s production staff can visit your facilities and meet your design engineers.
There’s something invaluable about having the time and proximity to discuss your production needs in person. It’s a significant benefit anytime you’re deciding to work with a CM, but especially so when you’re introducing a new product.
New Product Launches Best Handled by Local CMs
As with any new product or process, it is a certainty that you will face challenges during your PCB’s NPI runs.
When overseas production stops due to design obstacles, or when the PCBAs fail electrical tests, a speedy response is needed from you. However, due to geographical distance, a prompt resolution is blocked. Instead, your engineers must rush to board flights, while your managers attempt to troubleshoot long-distance via conference calls and email, sometimes requiring the services of language interpreters. One day is lost due to time zones, and a second day is lost obtaining overseas management approval on the design and process changes.
By the time your company delivers updated schematics to the factory, how much production time has been lost? How much stress have your employees experienced? How much overtime has been used to respond to an overseas situation that could have been addressed in one day with a local CM?
New product launches are beset with complexity by the sheer number of phases involved. Design engineering, component engineering, compliance, sourcing, manufacturing and testing, quality control teams, and suppliers must all be closely coordinated. The ability to synchronize production faster and easier is one of the biggest advantages of choosing to partner with a local CM.
Weighing Local PCB Manufacturer Advantages and Disadvantages
Of course, when faced with the decision of choosing a CM, it is important to have as much data in front of you as possible. Just as I now have a very solid list of pros and cons should I ever consider river rafting again, working through a robust list of advantages and disadvantages can aid in the decision-making process when choosing a CM. Consider the following points:
Advantages of Working with a Local CM
- Ease of research. Geographical proximity allows for confidential inquiries with industry peers into a potential CM’s production history, management style, production strengths and weaknesses, and company integrity.
- Proximity for in-person meetings. You have unlimited opportunities for in-person introductions, contract negotiations, and spontaneous design review meetings. While in production, your engineers are available for short-notice, hands-on troubleshooting, allowing issues to be resolved quickly—often on the same day.
- Engineering and quality oversight. Your company’s engineering and quality assurance teams can oversee first production runs.
- Quick turnaround and lead time reduction. You can expect a quick turnaround for revised design schematics for the factory, which reduces your lead time. In the case of an NPI, your engineers could receive the product the same day it comes off the line and out of testing.
- Enhanced communication. Rapid communication to the CM is possible if you need to make a change or have a need to scale production up or down.
- Streamlined design process. Since CMs charge OEMs for engineering change orders after production commences, a local CM with engineering services can get involved pre-production to streamline design processes.
- Access to quality materials. Local CMs’ contacts with materials suppliers allow them to have high-quality components ready in advance, knowledge in forecasting, agility in meeting production needs, and thorough testing procedures.
- Reliable delivery. Shipping via ground travel is affordable with a low risk of product damage—no expensive overseas shipping costs, no ocean or air cargo insurance, and no tariffs.
- Real-time updates. Your company can maintain continuous knowledge about the status of production and enjoy a respite from the high-risk uncertainties of overseas outsourcing.
Disadvantages of Working with a Local CM
- Labor costs. You’ll face a higher labor rate due to a higher federal minimum wage when working with a CM in the United States.
- Taxes. It’s possible you’ll face higher utility and tax expenses.
- Shipping expenses. Shipping to overseas customers is more costly from the United States.
Choose a Local CM for Your PCB Manufacturing Needs
Careful examination of the pros and cons listed above is an excellent strategy to weigh the advantages and disadvantages of working with a local contract manufacturer. Sure, lower labor costs overseas are enticing, but that only becomes worth it once you’re doing larger production runs using a vetted process. For your NPIs and low-volume runs especially, the optimum manufacturing scenario means having real-time oversight of PCB production, quality, and costs. Aligning with a reputable manufacturing partner, such as VSE, who has industry experience and engineering expertise will ensure a smooth product rollout.