The five steps to more efficient EMS sourcing

John Johnston, NPI Director, Chemigraphic

  1. Understand the requirement

When sourcing components for a product, it’s vital to receive a full brief on exactly what your customer needs in order to meet production deadlines and come in on budget. EMS partners need to understand product lifecycles, timeframes, urgency, and quantities required. It’s also essential that they can anticipate which manufacturing processes will be involved and determine which machine-friendly formats can be used in order to reduce handling and prevent the opportunity for human error. Component availability – particularly under current market strains – may call for alternative solutions to be found, or specific processes to be implemented.

Additionally, it’s important to know if the products need to meet certain standards, for example, if they have to be built to military grades or other strict regulations. In these cases however, customers must be flexible on the specification where possible to reduce both time and cost. Industrial grade parts can be far more expensive and significantly more difficult to source than perfectly acceptable commercial grades. Scalability should also be a key consideration at this point. The lure of catalogue availability for the rapid turn prototype stages can become a liability when production growth demands sustainable volume sourcing.

  1. Category analysis: Identify key Cost and technology drivers

Understanding exactly what will be driving the cost of the product and what technology is at play will serve any procurement well when focusing on cost and availability objectives. This thought process will form the basis for a solid and effective EMS sourcing strategy.

Technology considerations may impact the geographical area where sourcing is undertaken. For example, if a product will have IoT functionality, it is likely to be beneficial to source components within China or other offshore locations. Market conditions and current component stocks will also affect where and when you begin your sourcing journey.

It is also worth understanding at this stage any synergy between new and current projects to potentially leverage any latest production efficiencies. Advanced process automation, SMT clustering, common stock passives, inter-product commonality can all bring cost savings and delivery security if materials are selected to suit best practice.

  1. Audit your streams of supply

With any sourcing task, there will be a variety of options available in terms of locating and procuring the suitable EMS components for a product. In terms of choosing reliable, credible and efficient suppliers, there are a number of checks that must be made before embarking upon a deal. From basic financial checks to an audit of the accreditations and certifications each supplier holds, it’s essential that research is carried out before any decision is taken. Looking at capital assets will reassure you of the firm’s financial stability and it’s always useful to ask for references and testimonials from other partners as well.

With our heritage and legacy, Chemigraphic has a catalogue of key, tried and tested supplier relationships catering for various customer requirements both on and offshore across all sectors.

  1. Create your shortlist

When putting together your shortlist of suppliers to tender for an EMS component contract, look at the fundamentals. Consider costs, turnaround times, the commercial success each business has enjoyed and their reputation in the industry. Do your due diligence on each contender and wean the list down to those who tick the boxes in terms of chemistry, reliability and quality. It’s vital to choose suppliers who will be flexible and resourceful as well: just as you will often have to find suitable alternatives for your customers when complexities arise, your suppliers will need to as well, so pick partners who are willing to seek out different solutions where necessary.

Future-proof your selection by choosing a high-capability partner who offers additional services you may not need now, but could do in future.

  1. Select your supplier!

Put as much effort into establishing and building the foundations of the supplier relationship as you did into finding the suppliers in the first place. Draw up thorough contracts or standard operating agreements (SOAs), carry out comprehensive induction processes and trial the relationship by setting test orders or quantities. If the tests are passed and the results are good, then increase the amounts and progress the partnership. Scorecards and KPIs should run on a monthly basis to continually monitor current and new suppliers.

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